Information And Communication Technology As A Breakthrough Technology Of Service Sectors

Since the1990s, Information and Communication Technology, such as microelectronics, computers, communication technology and Internet, has been developing rapidly. Its popularization has had a significant impact on economic growth and social transformation. Service sectors has become the most ICT-intensive industry. ICT has a wide range of applications in the service industry, and penetrated to the all business operations processes. It can optimize service delivery model, enrich service content, improve service quality, and expand the service sector. So ICT has become the breakthrough technology of service sectors. The service industry has become the focus of China’s industrial structure optimization and upgrading. Developing modern service industry has become a strategic choice. ICT is the basic and the most important technology of modern service industry. Study of the role of ICT to service sector has important theoretical and practical significance.This paper focuses on three issues:whether ICT is a general-purpose technology or not; how can ICT promote the growth of the service sector, including how can ICT promote service sector productivity growth; Penetration of ICT in the service sectors and the role of ICT to the growth of the service sectors of China.General purpose technologies have three fundamental characteristics: Rapid improvement, Pervasiveness and Innovation spawning. In this paper, we use constant-quality price index, ICT capital data and patent data from the United States, Britain and other developed countries to prove ICT is a GPT by the three fundamental characteristics. We also prove that ICT demonstrates the fundamental characteristics of GPT though the constant-quality price index, ICT intermediate inputs and the patent data of China.We explain the role of ICT to the economic growth from three aspects:ICT improves labor productivity of information-related service sectors; ICT promote the mergence of secondary industry and tertiary industry, so new sectors and new demand generate; ICT promote the development of international trade in services, expanding the breadth of service sectors. In addition, we deliver a detailed analysis of the mechanism of how ICT promote the productivity of service:ICT-based online transactions, reduce the transaction costs of the various aspects of the service transaction, then lower the transactions price and ultimately enhance service transaction size to achieve Scale Economies Effect; ICT-based service delivery models accelerate the flow of logistics, information and capital; ICT-based management methods enhance the efficiency of the internal and the industrial chain links.Using the input-output method to analyze the strength of the application of ICT in China’s service sectors through direct consumption coefficient and intermediate inputs, we fine that the service sector is the most ICT-intensive in the three industries. The intensity gap of ICT applications between the various departments is becoming narrow. Based on the strength of ICT application, the service sector is divided into ICT-intensive sectors and non-ICT-intensive sectors. ICT-intensive service sectors have a higher labor productivity and labor productivity growth. After the theoretical analysis, we build a model on how ICT-intensive sectors promote the growth of the service sector. The dependent variable is the share of Value added of service sector in GDP, and the independent variables are the share of ICT-intensive sectors value added in whole service sector, consumption per capita, the share of industrial added value in GDP and the share of urban population. We analyze data from1995to2010of China, and find that the share of value added of ICT-intensive services sectors grow by1%, can promote the growth of the share of service sector in GDP by0.698%. So, ICT has a great positive impact on the growth of the service sector.Ultimately, we propose suggestions on information infrastructure, ICT investment in the service sector, the development of ICT-intensive service sectors and training of service employees.