Developing the electronics industry by Björn Wellenius, Arnold Miller, Carl J. Dahlman, World Bank

By Björn Wellenius, Arnold Miller, Carl J. Dahlman, World Bank

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1 percent for gross domestic product (GDP) (all in real terms). At this pace, by the year 2000 electronics will account for about 4 percent of world GDP and 14 percent of value added in manufacturing. 1 gives further details. The electronics industry can be an important source of jobs. 1 percent real growth per annum, as shown for 1980-88 in the 1990 World Bank Development Report (WDR). 8 percent per annum, which was the annual real growth rate in 1980-88 shown in WDR Table 2. Value added by electronics: In the absence of data, the table assumes that the value added by the electronics industry globally is about 70 percent of production.

Declining costs largely result from rapid growth in the functional capability of the basic devices with which electronic systems are built. For example, the number of active elements per semiconductor chip increased from 1 (a transistor) in 1950 to 1,000 in 1970 to over 4 million in 1990, while the price per chip remained roughly constant (Dahmen). 5 Fast pace of technological innovation. Electronics features an exceptionally high rate of technological progress. For example, successive generations of semiconductors are only two to three years apart (Nishi).

Information is regarded today as a fundamental factor of production, alongside capital and labor. In the 1980s, economic activities that mainly involve handling of information (as distinct from physical goods) accounted for one-third to one-half of GDP and of employment in Organization for Economic Cooperation and Development (OECD) countries; such activities are expected to reach 60 percent for the European Community in the year 2000. 1 is representative of trends among developed countries: fast growth of the information work force coupled with moderate growth of other services, which offsets the rapid decline of the share of employment in agriculture and, more slowly, in industry.

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