Draft: June 18, 2004
CEA Paper
Long-term Trends of Production Technologies in
Canada:
An Empirical Analysis
By
Krishna Murty, Ph. D.
Paper Prepared for the 38th Annual Meeting of the Canadian Economic Association
held at Ryerson University, Toronto, Ontario, Canada, June 4 -6, 2004.
For additional information, please contact:
Krishna.Murty, Chief of Research and Development, System of National Accounts,
Input-Output Division, Statistics Canada, 23rd floor, R.H.Coats Building, Tunneys
Pasture, Ottawa, Ontario, Canada K1A OT6. (Telephone: 613-9514454; Fax: 6139510489: E-mail: Krishna.murty@statcan.ca)
1
Long-term Trends of Production Technologies in Canada:
An Empirical Analysis
KRISHNA MURTY
This paper explores empirically the long-term trends in production technologies of the
Canadian economy, using the input–output data for the period 1961 to 2000.
According to the industry technology concept of input–output analysis, each industry
chooses its human and material ‘inputs’ into its production processes and the shares of
such inputs to the total spending depict the technologies employed by the corresponding
industries. As such, long-term shifts in these input shares reveal trends of production
technologies. This study draws on this concept to explore the technological
characteristics of industrial production in the Canadian economy over those forty years.
The Canadian economy is studied under three segments, namely (a) goods-producing
industries, (b) services-producing industries, and(c) government sector industries. The
inputs used in the production activities of these industry segments are analysed in a
three-dimensional setting covering a four decade period from 1961 to 2000.
The study demonstrated, among other things, that an economic structural change had
occurred in the Canadian economy during the 1980s with a substantial decline in the
share of goods-producing industries and a corresponding growth in the share of serviceproducing industries. According to the economic theory outlined by Professor Kuznets,
this is one of the characteristics of modern economic growth and post-industrialization
stage of the Canadian economy.
Keywords: Canadian production technologies; production inputs in the Canadian
economy; industry structure of the Canadian economy
1. Introduction
The input–output tables are an integral part of the System of National Accounts and they
offer detailed information on the production and disposition of goods and services for
each industry in the economy. The information is useful for analytical studies.
Krishna.Murty is Chief of Research and Development in the System of National Accounts, Input-Output
Division, Statistics Canada. The author thanks Philip Smith, Karen Wilson, Ian Macredie and Michel
Girard for excellent general direction, advice and comments. He also thanks his colleagues Dave LeBlanc,
Milan Jayasinghe, Pierre Mercier, Dan Finnerty, Pat Latimer, Peter Tokarew, Marc Prud’homme, Sharon
Philippe and the reference librarians Glen Gagnon, Monique Dumais, Jennifer Pagnotta, Vladimir
Rebinozak, and Anne Marie Barter for their valuable help. The views expressed in this paper are those of
the author and do not necessarily reflect those of Statistics Canada.
2
In addition to this general phenomenon, the industry structure of the Canadian
input–output tables now includes all producers of goods and services, namely,
corporations including government business enterprises, unincorporated businesses,
governments and non-profit institutions serving households. The new industry structure
makes the input-output tables even more useful.
In Canada, the comprehensive coverage of all industries was brought about by the
1998 modernization project1, which introduced, among other things, a change in the
treatment of government sector institutions and non-profit institutions serving
households2 (see Section 3 for more details). These institutions are now shown as
separate industries without combining them with the business sector industries to
facilitate analytical studies. The change relating to these institutions constitutes a new
dimension and it was implemented retrospectively3 from 1961. Previously, these
institutions were treated as final consumers and shown only in the final demand matrix.
The change in their treatment recognizes that these institutions have a production role in
the economy: they too produce goods and services, despite the fact that they do not sell a
large portion of their output. Since they are now part of the CSNA industry structure, the
1
The modernization project was started in 1994 and completed during 1998. It covered all the four
systems of the Canadian System of National Accounts: the Input-Output Accounts; the Income and
Expenditure Accounts; the Gross Domestic Product by Industry; and the Balance of International
Payments and Financial Flow Accounts. For more details on the historical revision, see Murty, P.S.K.,
Input–Output Accounts of the Canadian Economy: Concepts, Definitions and National Economic
Accounting Structure, Volume 3, Historical Revision, 1961–92, Technical Series, No. 95, Ottawa: Input–
Output Division, Statistics Canada, August 2001.
2
Formerly, government institutions were included in the data of the government sector while non-profit
institutions serving households were included in the personal sector and shown in the final demand
matrix of the Canadian input-output tables. They consume most of their output themselves, and do not
operate for profit. They are essentially non-commercial in nature and hence they were treated as final
consumers prior to the 1998 historical revision.
3
The input-output tables for the Canadian economy are published annually from 1961 onwards.
3
changed treatment from ‘final consumers’ to ‘producers of goods and services’ has thus
added a new dimension to the input-output tables. This study benefits from the new
dimension, which, among other things, provides several advantages:(a) it gives an insight
into the production activities of government and non-profit institutions serving
households with detailed information on their inputs and outputs just like all other
industries; and (b) it also enhances the usefulness of the input–output tables significantly
as information on all producers of the Canadian economy is available in the input and
output matrices with consistent time-series from 1961 onwards.
2. Set-up of the Canadian input-output tables
As countries present input-output tables in different formats such as commodity by
commodity, industry by commodity in a square set-up and others, this section explains
the specific format used in the Canadian system for a better understanding of the data
used in this study.
The Canadian input-output tables are presented in three inter-related matrices for
each year from 1961 onwards: (a) Input (use) matrix; (b) Output (make) matrix; and
(c) Final demand matrix. While the input and output matrices contain data of all
industries by commodity, the final demand matrix contains final demand categories by
commodity. In other words, industries and final demand categories are presented in
columns while the commodities are shown in rows of the matrices.
During the last four decades, the number of industries, commodities and final
demand categories in the input-output tables was changed several times depending on the
analytical requirements of the Canadian economy (Figure 1). Nevertheless, consistency
4
in classification of commodities is maintained in the time-series at the Link (L) and Small
(S) levels of aggregations. The data at these levels of aggregation are used for this study.
Since the Canadian input-output tables are rectangular rather than square with
more rows than columns, the relationship between the industries and the commodities is
not a one-to-one correspondence. Instead, each industry has its own input and output
commodities. In other words, the industries are not reorganized as commodities.
FIGURE 1: NUMBER OF INDUSTRIES, COMMODITIES (INCLUDING PRIMARY INPUTS) AND FINAL DEMAND
CATEGORIES IN THE CANADIAN INPUT-OUTPUT TABLES: 1961 – 2000
(WORKSHEET -W- LEVEL ; LINK – L- LEVEL; SMALL – S- LEVEL AGGREGATIONS)
Period
Number of industries
Commodities and primary inputs Final demand categories
W
L
S
W
L
S
W
L
S
1961 – 80
204
167
21
615
476
57
138
122
13
1981 – 85
243
167
22
615
476
57
162
122
13
1986- 97
243
167
22
679
476
57
162
122
13
1997
299
113
25
725
476
57
170
121
13
1998 – 2000
300
113
25
727
476
57
170
121
13
Each industry is presented in a separate column of the input matrix as well as in the
output matrix. The inputs used by industries in their production activities are shown in
the input (use) matrix, while their production is shown in the output4 (make) matrix.
Thus, for example, in the 1998- 2000 period, 300 industries are denoted at the working
level in 300 columns while 727 commodities used or produced by these industries are
presented in 727 rows of the matrices.
4
The output matrix is also called the make matrix. In the previous treatment, the government sector was
treated as a final consumer and shown only in the Final Demand matrix. It had neither an input matrix
nor an output matrix in the Canadian input-output tables. In the new treatment, the output of the
government sector industries is shown in two parts: (i) the first part contains all the government products
that are marketed for which sales revenue is received; (ii) the second part contains the non-market
product, which is the residual derived after subtracting the sales revenue from the value of ‘total inputs’.
Thus, the ‘total inputs’ are equivalent to the ‘total output’.
5
The input matrix, which is also called the ‘use matrix’, contains information on
various inputs used in the production activities while the output matrix shows the
commodities (both market and non-market) produced in the Canadian economy. In the
input-output accounts, the ‘total inputs’ are equivalent in value to the ‘total outputs’.
It should be noted, however, that the ‘total outputs’ of all industries in the
economy have an element of duplication, because the outputs of some industries may be
used as inputs of others for their production activities. Therefore, the ‘total outputs’ of
the economy represent only the ‘total gross output’, i.e., gross of intermediate inputs.
Despite this duplication, the information on the gross output measure is useful in
analyzing the total production activity of all industries in the economy.
Also, the
duplication does not distort either the analysis or the conclusions, because it is a common
feature for all the three industry groups in the consistent time-series of the input-output
tables used in this study.
3. New Dimension: Treatment of government and non-profit institutions
serving households as producers
It was mentioned earlier that the Canadian Input-Output tables have a new
dimension consisting of government sector and non-profit institutions serving
households. In this section, the relevant background information of this new dimension
is provided with special reference to the existing literature and the practices of other
countries.
6
The 1968 System of National Accounts5 (SNA) published by the United Nations
included input-output tables as an important part of the national accounts. Among other
things, this publication integrated the input-output tables both conceptually and
statistically into the national accounts. Moreover, it recommended the treatment of the
government sector and non-profit institutions as producers of services:
“The producers of government service should include all bodies, departments and
establishments of government – central, state or provincial, district or county, municipal,
town or village – which engage in a wide range of activities, for example, administration,
defence and regulation of the public order; health, educational, cultural, recreational and
other social services; and promotion of economic growth and welfare and technological
development. The legislature, executive, departments, establishments and other bodies of
government should be included, irrespective of their treatment in the actual government
accounts. It is immaterial whether they are accounted for in ordinary or extraordinary
budgets or in extra-budgetary funds”6. (Section 5.25, page 75)
“………..The non-profit bodies to be included are organizations which primarily serve
households or business units and are wholly, or mainly, financed and controlled by the
public authorities, and organizations which primarily serve government units
themselves”. (Section 5.28, page 75)
The SNA recommended inclusion of purchases by producers of government services and
non-profit institutions serving households in intermediate consumption rather than in
final demand7 for the input-output tables8. It also defined the value of gross output of
these institutions as follows:
“The value of the gross output of the producers of other goods and services – the
producers of government services and of private non-profit services to households and
5
United Nations, Department of Economic and Social Affairs, Statistical Office of the United Nations,
A System of National Accounts, Studies in Methods, Series F, no. 2, rev. 3. New York, 1968, pp. 72-73;
United Nations, National Accounts Statistics: Study of Input-Output Tables, 1970-80. New York, 1987,
p. 13.
6
Ibid., p. 75.
7
Ibid., p. 101.
8
See Viet, Vu Quang, “Practices in input-output table compilation,” in Regional Science and Urban
Economics, 24(1), February 1994, p.45; United Nations Statistical Office, “Input-Output Standards in the
SNA Framework,” in Franz, Alfred and Norbert Rainer, eds., Problems of Compilation of Input-Output
Tables: Proceedings of an International Meeting organized by the Austrian Statistical Society, Baden
near Vienna, Austria, 19-25 May 1985,. Wien: Orac, 1986, p. 529.
7
the domestic services rendered by households – is taken to be equivalent to the costs of
producing these services”9. (Section 6.41, page 98)
The SNA treatment of the government sector in the input-output tables was also the
subject of discussion in a series of papers. For example, in a paper presented by the
United Nations Statistical Office at the International Meeting organized by the Austrian
Statistical Society in Baden, May 19-25, 1985, the following view point was provided:
“As a third new element (in the 1968 SNA), the distinction between production of goods
and services and final demand is further clarified by the inclusion in the input-output
framework of producers of government services and producers of private non-profit
services to households. This modification involves the transfer of all current expenses by
government from the final demand column of government consumption to the
intermediate consumption quadrant and including only the total net value of these
expenses (after deduction of government sales) in final demand”10.
It was also mentioned that, under the guidance of French and UN technical assistance,
several Latin American countries such as Columbia, Mexico, Ecuador, Peru, and Bolivia
integrated their input-output tables into the national accounts in the ‘80s based on the
SNA recommendations.
Moreover, in a discussion of the country practices relating to compilation of
input-output tables based on SNA 1968, Vu Quang Viet of the United Nations Statistical
Division mentioned in his paper entitled ‘Practices in input-output table compilation’ that
the SNA recommendation “to include purchases by producers of government services in
intermediate rather than in final demand” had been adopted by Japan, Thailand, Indonesia
and several other countries as well. But, he noted that many other countries, such as
9
United Nations, Department of Economic and Social Affairs, Statistical Office of the United Nations, A
System of National Accounts, Studies in Methods, Series F, no. 2, rev. 3, 1968, op. cit., p. 98.
10
United Nations Statistical Office, “Input-Output Standards in the SNA Framework,” in Franz, Alfred and
Norbert Rainer, eds., Problems of Compilation of Input-Output Tables: Proceedings of an International
Meeting. Wien: Orac, 1986, pp. 529-530.
8
Canada, the Netherlands, Sweden, the United Kingdom and the United States were yet to
implement the SNA recommendation11.
In another paper entitled “Treatment of Government Activity on the Production
Account,”12 Utz P. Reich noted:
“In the SNA no make matrix is assigned to the non-market output of government.
Instead this output is directly imputed to final demand (F’)”13.
His main argument was that the SNA assigned activities directly to final use without any
‘intervention’ of output (‘commodities’)14. As a follow-up, Lucio Malfi, in his paper
entitled ‘Government production in ESA and SNA tables’, noted as follows:
“As the government sector buys labour services in the same market where private
enterprises buy their labour, its output is considered as a product. But the old concept of
government as a mere consumer still remains and therefore the treatment of government
sector is not yet regarded as being fully satisfactory”15…… “In particular, a solution has
not yet been found to the long-standing problem of isolating, within national accounts,
the intermediate uses of government product. In fact, the world-wide practice of
assigning government product to final use is a non-solution”16.
11
Viet, Vu Quang, “Practices in input-output table compilation,” 1994, op. cit., p. 45; Also, see Japan,
Management and Coordination Agency, Statistics Bureau, Statistical Standards Department, 1990 InputOutput Tables for Japan, Summary in English. Tokyo, March 1995, p. 30.
12
Reich, Utz, “Treatment of Government Activity on the Production Account,” in The Review of Income
and Wealth, Income and Wealth Series 32, Number 1, March 1986, pp. 69-85.
13
Ibid., p. 73.
14
Ibid., p. 73.
15
Malfi, Lucio, “Government Production in ESA and SNA Tables,” Chapter 4 in Ciaschini, Maurizio, ed.,
Input-Output Analysis: Current Developments. London, New York: Chapman and Hall, 1988, pp 61-74
(see introduction of his paper).
16
Ibid., p. 61. It should be noted, however, that these comments related to the position of the 1968 SNA at
that time.
9
The subsequent publications17, such as the System of National Accounts 1993 (SNA1993)
and the European system of accounts ESA 1995 further elaborated the concepts and
made several improvements to the 1968 SNA. These publications defined the industry in
a way that it includes not only the establishments that produce market output, but also
those that produce non-market output. In this arrangement, the general government and
non-profit institutions serving households belong to the category of non-market
producers18. Consequently, the guidelines of these documents treated the government
sector and the non-profit institutions serving households in the same way as the business
sector.
In Canada, a modernization project involving a major historical revision of the
Canadian System of National Accounts (CSNA) was completed during 1998 by using,
among other things, the elaborated concepts of the SNA 1993. As a result, the industry
structure of the Canadian input-output tables was expanded to include both the general
government and the non-profit institutions serving households. The Canadian inputoutput tables now treat the government sector and non-profit institutions serving
households as separate industries, and present them in the same way as the business
sector industries. In other words, the government sector and the non-profit institutions
serving households now receives the same treatment as the business sector.
17
Commission of the European Communities – Eurostat, International Monetary Fund, Organisation for
Economic Co-operation and Development, United Nations, World Bank, System of National Accounts,
1993. Brussels/Luxembourg, New York, Paris, Washington, D.C., 1993, p. 118; Also see, Eurostat,
European System of Accounts: ESA 1995. Luxembourg: Office for Official Publications of the European
Communities, 1996, p. 34.
18
Commission of the European Communities – Eurostat, International Monetary Fund, Organisation for
Economic Co-operation and Development, United Nations, World Bank, System of National Accounts,
1993, 1993, op. cit., p. 402.
10
In the United States, the Bureau of Economic Analysis (BEA) is now in the
process of incorporating a series of comprehensive revisions19 to their national income
and product accounts and I-O accounts. Among other things, these revisions include a
change in “the presentation of government consumption expenditures and gross
investment in order to emphasize government’s role as a producer of services and to
make the presentation parallel to that of the output and intermediate inputs of private
business in the I-O accounts and the GDP- by industry accounts”20
Other countries, such as Germany, the United Kingdom, Australia, Sweden and
New Zealand also treat the government sector as an industry in their input-output tables21.
This review shows that the treatment of institutions producing non-market output such as
the government sector, as a producing industry in the input-output tables, is gradually
becoming an international practice in line with the recommendations of the SNA 1993.
4. Goal of this research study
The goal of this research study is to identify long-term trends of production
technologies in Canada over the past four decades, by examining the input structure of
the industries presented in the input-output tables. This is a fact-finding and an
exploratory study at the macro-level and thus is not meant to measure either the
19
Moulton, Brent R. and Eugene P. Seskin, “Preview of the 2003 Comprehensive Revision of the National
Income and Product Accounts: Changes in Definitions and Classifications,” in Survey of Current
Business, 83(6), June 2003, p. 30.
20
McCulla, Stephanie H. and Carol E. Moylan, “Preview of Revised NIPA Estimates for 1997: Effects of
Incorporating the 1997 Benchmark I-O Accounts Proposed Definitional and Statistical Changes,” in
Survey of Current Business, 83(1), January 2003, p. 14.
21
Doggett, E. A., ed., United Kingdom National Accounts Concepts, Sources and Methods. London: The
Stationery Office, Office for National Statistics, United Kingdom, 1998, p. 257; Australia, Australian
Bureau of Statistics, Australian National Accounts, Input-Output Tables 1993-94, ABS Catalogue
Number 5209.0. Canberra, 1997, p. 59; also see, Mahajan, Sanjiv, ed., Input-Output Methodological
Guide. London: Office for National Statistics, United Kingdom, 1997, p. 26; E-mail information for
Australia, New Zealand, Germany, and Sweden.
11
productivity or the efficiency of individual industries and their groups. For this study, the
total Canadian economy is divided into three groups: goods-producing industries;
services-producing industries; and government sector industries. The inputs used in the
production activities of these industry segments are studied in the form of input shares of
the total spending on production activities and analysed in a three-dimensional setting
covering a four-decade period from 1961 to 2000.
Moreover, because topics such as technology, innovation and the knowledgebased economy are currently receiving much attention, this paper will attempt to shed
light on the issue of technology at the macro-level and set the stage for future updates or
extensions concerning the production technologies of the Canadian economy. Although
micro-level analysis within these groups might be useful, they are outside the scope of
this study. The goal is to provide a first glance at the trends of the macro-level to be
followed-up in further detailed studies at the micro-level, as needed.
5. Concepts and definitions
5.1 Government sector industries
In the CSNA, the government sector consists of three main sub-sectors representing
different levels of government, namely, federal, provincial and local, which carry out
their activities through various departments, besides agencies, boards, etc. In addition,
health service institutions (such as hospitals and residential care facilities) and
educational institutions (universities, colleges and schools), which are mostly
government-funded, are also included in the sub-sectors concerned. Definitions and lists
12
of all organizations and agencies that are classified as government institutions can be
found in the Public Sector Universe Project22 of the CSNA.
The activities of the government sector are essentially non-commercial in nature,
and are financed for the most part by taxation and borrowing. A small proportion of
government production, approximately 10% to 13%, is sold in the market place23, either
at nominal prices or at cost. A majority of services, however, is provided free of charge to
the public.
In terms of the new dimension, government-sector institutions are classified into
six industries based on their major activities: hospitals (including residential care
facilities); education services (including universities, colleges and local schools); defence
services (national defence); federal government (excluding defence); provincial and
territorial governments; and municipal (local) governments.
Government business enterprises (i.e., crown corporations) are not included in the
government sector because their motivations and the methods of operation are profitoriented, similar to those of private business enterprises. They are, therefore, included in
the relevant business-sector industries.
5.2 Other industries
Other industries consist of business sector industries and non-profit-institutions serving
households. The business sector industries are grouped into two categories:
22
The Public Sector Universe includes all institutions that are conceptually classified as part of the
government sector. It is maintained in Statistics Canada by the Public Institutions Division and utilized
by all divisions of the Agency in the production and analysis of statistics relating to the government
sector. It facilitates uniformity and consistency in the government-sector database across all divisions of
Statistics Canada.
23
Statistics Canada, National Income and Expenditure Accounts Division.
13
™ goods-producing industries include agriculture, fishing and trapping,
logging and forestry, mining, quarrying and oil wells, construction, and
manufacturing industries;
™ service-producing industries include transportation, communication, trades
(wholesale and retail), finance, insurance and real estate, business services
and other service industries.
In the new dimension, non-profit institutions serving households (religious organizations;
welfare organizations; sports and recreation clubs; educational institutions; and other
organizations) are presented separately as industries. They are combined with the
service-producing industries in this study.
5.3 Inputs for production activities
As part of the production activities, industries use several intermediate inputs such as
goods and services purchased from other producers. In addition, they utilize the services
of their own employees and pay them wages and salaries and supplementary labour
income. They also use their own capital assets such as machinery and equipment, and
pay indirect taxes (i.e., taxes on production) to the government. In the input–output
tables, these items appear as categories of primary inputs:
•
wages and salaries (W&S), which represent remuneration to employees;
•
supplementary labour income (SLI). This item mostly contains fringe benefits
to employees in the form of employer contributions to social insurance
programs. In the present case, these are the contributions to specific accounts
of employee benefits, such as pensions, unemployment insurance, Canada and
Quebec pension plans, workers’ compensation and other welfare plans
14
(hospital and other insurance, such as dental and travel). It also includes
retiring allowances, such as the severance pay employees receive at the time
of their retirement.
•
capital consumption allowances (CCA) represent the portion of capital assets
consumed in the production process of the current period. They are, therefore,
charged to current account. In line with the national accounting concepts,
inputs for production activities include only spending on current goods and
services including capital consumption. Outlays on capital goods such as
those relating to ‘machinery and equipment (M&E) and ‘construction put-inplace’ are not included in that item.
•
mixed income contains the net income of unincorporated business including
farmers
•
operating surplus contains profits of corporate business as well as capital
consumption of both corporations and unincorporated business
•
indirect taxes (i.e., taxes on production) are mostly property-related.
•
subsidies reflect the government assistance to industries. As the industries
include them in their calculations to derive profits and as they are treated as
‘transfers’ in the CSNA, they are removed from the factor incomes of ‘mixed
income’ and ‘operating surplus’ by presenting them as negative values.
The inputs into the production activities shown in the input matrix consist of primary
inputs as well as intermediate inputs. Intermediate inputs are the goods and services
purchased from other producers and used in the production process. In other words, they
represent the acquisition and utilization of human and material resources required to
15
generate the output in the current period. The ‘total value of inputs’ represents only the
current expenditures and do not include capital expenditures to avoid double counting.
This is because ‘capital consumption’, which represents the portion of ‘capital assets’
consumed in the production activities, is already included in the total current outlay as
one of the inputs utilized for current production.
5.4 Industry technology
According to the industry technology definition of the input–output analysis, each
industry chooses its human and material resource inputs into its production processes.
The proportions (shares) of inputs to the total spending on production activities reflect the
technologies employed by the producing industries24. Long-term shifts in the shares of
inputs to the total spending reveal the changes in the patterns of industry technologies.
This study relies on this definition to explore the long-term trends in production
technologies of the Canadian economy.
A literature review has revealed no published precedents on the subject of this
paper.
However, there are studies about computer technology and other automated
mechanical equipment such as robots used in the production processes of industries,
where the term ‘technology’ is used to include only the mechanical equipment. As the
24
Canada, Statistics Canada, The Input-Output Structure of the Canadian Economy 1971-79, Statistics
Canada Catalogue Number 15-201E. Ottawa: Minister of Supply and Services Canada, 1983, p. 29; Also
see: Simpson, David and Jinkichi Tsukui, “The Fundamental Structure of Input-Output Tables: An
International Comparison,” Chapter 24 in Sohn, Ira, ed., Readings in Input-Output Analysis, Theory and
Applications. New York: Oxford University Press, 1996, p. 372; Eurostat, European System of Accounts:
ESA 1995. Luxembourg: Office for Official Publications of the European Communities, 1996, p. 225;
Commission of the European Communities – Eurostat, International Monetary Fund, Organisation for
Economic Co-operation and Development, United Nations, World Bank, System of National Accounts,
1993. Brussels/Luxembourg, New York, Paris, Washington, D.C., 1993, p. 367.
16
input-output analysis is based on a broader definition of ‘industry technology’, which
includes all inputs into the production process, studies dealing with only mechanical
equipment are not very relevant for our purpose. Therefore, it appears that this study on
production technologies in Canada is probably the first of its kind as it uses the broader
definition of industry technology of the input-output analysis. It is in this sense, perhaps,
there is a basic need to fill in the literature gap and this study will try to do just that.
6. Data, research strategy and methodology
6.1 Data
This study uses the input data of government spending on production activities for the
past 40 years (i.e., from 196l to 2000). The input matrices of the input-output tables
contain the resource inputs that the industries utilized to generate output in the Canadian
economy and they form the basis for the data of this research.
The data used in this study are in purchasers’ prices—the market cost of inputs—
in current dollars. They reflect the purchasers’ actual transaction payments (cost plus
margins, such as wholesale margin, retail margin, transportation margin and commoditytax margin) incurred on the resource inputs used in production activities.
As mentioned earlier, there have been different levels of commodity aggregations
at the Worksheet (W) level over the last forty years. However, consistent data are
available only at the Link (L) and Small (S) levels of aggregation shown in Figure 1 and
they are used as discussed in the next section.
6.2 Research strategy and methodology
¾ The input-output tables of the past forty years contain several different
aggregations of commodities and industries (Figure 1 in Section 1). The main
17
task of this research is to assemble consistent time-series of commodities for
all industries and to group them into manageable sets of data for analysis.
¾ The required input data with a consistent classification system are available at
the Link (L) level of aggregation with 476 commodities and they have been
extracted from the input matrices of all industries.
¾ For easy exposition, these data are converted into a manageable level of detail
at the Small (S) level of aggregation, which contains 57 commodities and 25
industries. This conversion is necessary because the 40-year historical annual
data at the L level are voluminous and rather unwieldy.
¾ The 57 S-level commodities are reorganized into two categories: goods and
services. If a particular S-level commodity comprises both goods and services
(e.g., other utilities) or cannot be meaningfully analysed, necessary
information is extracted from the L level and in some cases, from the
Worksheet (W) level, which have more details. This enables such S-level
commodities to be split into the required inputs. The S-level commodities that
have been subjected to this exercise are listed in the appendix.
The
methodology used to estimate capital consumption by industry has also been
explained in the appendix.
¾ The S level industries of the Input-Output framework have been grouped into
three categories.
•
Goods-producing industries: include agriculture; fishing and trapping;
logging and forestry ,mining, quarrying and oil wells; construction; and
manufacturing
18
•
Service-producing industries: include transportation; communication and
other utilities; trades (wholesale and retail); finance, insurance and real
estate; business services; other services; and non-profit institutions serving
households
•
Government sector industries:
include hospitals and residential care
facilities; universities and other educational institutions such as colleges
and schools; defence; federal government; provincial and territorial
governments; and local government
¾ The input data thus derived for the three categories covering the 40-year period
have been converted into decade-annual averages in dollar values for each of the
four decades—the 1960s (1961 to 1970), the 1970s (1971 to 1980), the 1980s
(1981 to 1990) and the 1990s (1991 to 2000)25.
¾ The dollar values of the decade annual averages have been aggregated for the
total economy by combining the data of the three industry groups. Then, the input
shares of each category to the total economy have been derived. In other words,
each input is expressed as a percentage of the total of all inputs of the Canadian
economy. These are called input shares.
¾ Thus, the input shares of the total economy have been cross-classified by the three
categories—goods-producing
industries;
service-producing
industries;
and
government sector industries— by using detailed information. In effect, this
exercise has transformed the input shares of the three industry segments into a
25
In Canada, input-output tables are available from 1961 onwards. Hence, the forty year period (i.e., from
1961 to 2000) has been divided into four decades starting from 1961. The resulting decades are: 1960s =
1961 to 1970; 1970s = 1971 to 1980; 1980s = 1981 to 1990; 1990s = 1991 to 2000.
19
three-dimensional paradigm showing not only the total share of each input for the
total economy, but also its distribution by category and decade.
¾ The data of this three-dimensional paradigm are regrouped into four components
for analysis:
•
employee compensation (wages and salaries and supplementary labour
income)
•
gross operating surplus (This includes two primary inputs: mixed income;
and other operating surplus, which includes capital consumption of assets
used up in the production processes of corporations and unincorporated
business. It represents both returns to capital, in the form of net income
and profits; and return of capital in the form of capital consumption.
•
purchased services (professional and other business services, information
technology applications such as computer services, and health professional
services, etc. purchased by the industry concerned for use as intermediate
inputs)
•
all other inputs (such as purchased goods, indirect taxes paid to the
government, and subsidies received from the government. While
purchased goods constitute a significant portion of this category, indirect
taxes and subsidies are rather small. ).
In summary, by using a number of steps in the research strategy and
methodology, input-shares of the total industries’ total outlay on production activities
have been developed and cross-classified by each of the three industry categories for the
20
four decades. Finally, in the next section, the data of this paradigm are analysed to
explore the production technologies in the Canadian economy over the past four decades.
7. Data analysis of production technologies
7.1 Group shares
As mentioned in Section 5.2, the Canadian economy has been divided into three main
industry groups for this study: goods-producing industries; service-producing industries;
and government sector industries.
7.1.1 Goods-producing industries:
Of the three groups, goods-producing industries had the largest share of resource inputs
in their production activities from the 1960s to the 1980s: about 54% in the 1960s, 51%
in the 1970s, and 47% in the 1980s. But in the 1990s, their share declined to 42%, which
was lower than that of the service-producing industries (Table 1). As can be seen, the
decline from decade to decade was continuous and accelerating: a loss of 3 percentage
points from the 1960s to the 1970s, 4 percentage points from the 1970s to the 1980s, and
5 percentage points from the 1980s to the 1990s.
In effect, the goods-producing
industries lost 12 percentage points in their share of total resource inputs over the past
four decades.
Except for purchased services, which had a stable share of about 5% in all the
four decades, the shares of all other input categories declined (Table 4): Employee
compensation, which was 13% of the total inputs in the 1960s, declined steadily to 12%
in the 1970s, 10% in the 1980s, and 9% in the 1990s. Thus, employee compensation lost
4 percentage points in the four decades. Similarly, gross operating surplus, which had a
21
share of about 9% in the 1960s and 1970s declined to 8% in the 1980s and 7% in the
1990s. This input category lost 2 percentage points in the past four decades. All other
inputs, which include mostly goods used in the production, declined from about 28% in
the 1960s to 26% in the 1970s, 24% in the 1980s and 22% in the 1990s – a loss of 6
percentage points from the 1960s to the 1990s.
Thus, the shares of goods-producing industries declined 4 percentage points in the
use of own-account employment, 2 percentage points in the gross operating surplus and 6
percentage points in the goods used for production – a total of 12 percentage points over
the past four decades. This group of industries was predominant in its input share for
three of the four decades from the 1960s to the 1980s, but lost it by the 1990s when the
service-producing industries surpassed it and gained a predominant role in the Canadian
economy.
7.1.2 Service-producing industries:
The service-producing industries had the second largest share of total inputs in their
production activities for three of the four decades, i.e., from the 1960s to the 1980s: about
34% in the 1960s, 35% in the 1970s, and 39% in the 1980s. But, in the 1990s, their share
grew to 44% and surpassed that of the goods-producing industries. Their shares grew
continuously and steadily: 1 percentage point from the 1960s to the 1970s; 4 percentage
points from the 1970s to the 1980s; and 5 percentage points from the 1980s to the 1990s
with significant acceleration in the 1990s.
The growth from the 1960s to the 1990s was 10 percentage points. Of this growth, a
significant portion of 5 percentage points or 50% was recorded from the 1980s to the
1990s.
22
All components showed increases (Table 4). Employee compensation, which was
about 11% in the 1960s rose to 12% in the 1970s, 13% in the 1980s and 14% in the
1990s. Gross operating surplus had a marginal gain from 11% in the 1960s and 1970s to
12% in the 1980s and 1990s. Purchased services, which were about 6% in the 1960s,
grew to 7% in the 1970s, 9% in the 1980s and 11% in the 1990s. Thus, of the total
increase of 10 percentage points from 34% in the 1960s to 44% in the 1990s, purchased
services accounted for 5 percentage points (i.e., half of the increase) while employee
compensation accounted for 3 percentage points (i.e., 30% of the increase). Thus, the use
of own-account employment and also the services purchased from other producers rose
significantly from 17% in the 1960s to 25% in the 1990s. These two input categories
accounted for 80% of the total growth in the service-producing industries. Other inputs
consisting of mostly goods remained stable at about 6% in all the four decades.
Therefore, in contrast to the declining trend of the goods-producing industries, there
was a steady increase in the share of service-producing industries, particularly in the
1980s and the 1990s. Goods-producing industries had a declining trend of own-account
employment and other material inputs. In contrast, both own account employment and
services purchased from other producers showed significant increases in the serviceproducing industries with marginal gain in the use of other inputs consisting of materials
for production. In other words, the use of more inputs for own-account employment and
services purchased from other producers was evident in the service-producing industries.
7.1.3 Government sector industries:
The government sector, which had the smallest share of about 12% in the 1960s grew to
14% in the 1970s – merely 2 percentage points over the two decades with no further
23
growth in the 1980s and the 1990s (Table 1). Of the gain of 2 percentage points, half of
it was attributable to the share of own-account employment and the other half to the
services purchased from other producers (Table 4).
7.1.4. Group shares: summary
If we summarize these findings in a different way, in the 1960s, for every dollar’s worth
of total inputs in the production activities of the Canadian economy, 54 cents were spent
by the goods-producing industries, 34 cents by the service-producing industries and 12
cents by the government sector industries (Table 1). In the 1960s, 1970s and the 1980s,
there was a predominant role for the goods-producing industries in the economy even
though the share in the total inputs declined steadily from 54 cents in the 1960s to 51
cents in the 1970s, and 47 cents in the 1980s.
But, in the 1990, it had changed: the service-producing group’s total input share rose
to 44 cents of a dollar while the goods–producing group’s share declined to 42 cents. In
other words, the service-producing group established its predominance in the 1990s with
a gain of 10 cents from the 1960s while the goods-producing group lost 12 cents over the
same period.
On the other hand, the government sector industries spent 12 cents in the 1960s for
every dollar’s worth of resources in the production activities of the Canadian economy.
This spending rose to 14 cents in the 1970s and stayed at that level in the 1980s and the
1990s
Thus, the service-producing industries gained a predominant role in the Canadian
economy in the 1990s with a significant gain in their total input share from the 1980s to
24
the 1990s. The government sector industries remained stable in the 1980s and the 1990s
after a brief expansion in the 1970s.
7.2 Total outputs
In the input-output analysis, total inputs are equivalent to total gross outputs of any
industry or for all industries of the economy. Based on this principle, the trends observed
for the total inputs of these industry categories are applicable to their total outputs also.
In other words, the share of total gross output of the goods-producing industries has had a
significant drop from 54% in the 1960s to 51% in the 1970s, 47% in the 1980s, and 42%
in the 1990s. This should not be construed to mean that the absolute level of gross output
of goods-producing industries declined over the decades. It only means that the relative
share of gross output declined in relation to the service-producing industries as can be
seen from the data presented in Table 2. This is because the growth rate of the goodsproducing industries’ gross output was much lower than the service-producing industries.
In contrast, the output-share of the services-producing industries rose from 34% in
the 1960s to 35% in the 1970s, 39% in the 1980s, and 44% in the 1990s. The growth
rates of this industry group exceeded those of the goods-producing industries in the
1970s, 1980s and 1990s. If we look at the total growth from the 1960s to the 1990s, the
gross output of the service producing industries grew a little over 17 times from $36
billion in the 1960s to $628 billion in the 1990s whereas the gross output of the goods
producing industries increased only about 11 times from $57 billion in the 1960s to $610
billion in the 1990s (Table 2).
25
The output share of government sector industries, which was 12% in the 1960s
rose to 14% in the 1970s and stayed at that level in the 1980s and the 1990s with no
further change (Table 1).
All in all, there was a remarkable shift in favour of the service-producing
industries in the 1980s. In other words, economic structural change seems to have
occurred in the 1980s in the Canadian economy.
7.3 Utilization of services in the Canadian economy
In the previous section, the significant rise in the output share of the services-producing
industries has been discussed. In this section, let us see how the growth in services was
utilized by all sectors of the Canadian economy during the past four decades.
As depicted by the data in Table 1, the share of total output in the serviceproducing industries rose from 34% in the 1960s to 44% in the 1990s – a gain of 10
percentage points. Of this gain, 1 percentage point was from the 1960s to the 1970s, 4
percentage points were from the 1970s to the 1980s, and 5 percentage points from the
1980s to the 1990s. In other words, 50% of the gain in the services output was achieved
from the 1980s to the 1990s.
The utilization of purchased services by the business sector consisting of the three
industry groups under study, rose from 13% in the 1960s to 15% in the 1970s, 17% in the
1980s and 20% in the 1990s - a gain of 7 percentage points from the 1960s to the 1990s.
The share of purchased services by the goods-producing industries was stable at about
5% in all the four decades while the share of services-producing industries grew from 6%
in the 1960s to 11% in the 1990s – a gain of 5 percentage points. The share of
26
government sector industries rose from 2% in the 1960s to 4% in the 1990s – a gain of 2
percentage points.
In other words, of the gain of 10 percentage points in the total output of services
from the 1960s to the 1990s, the service industries themselves absorbed 5 percentage
points or 50% while the government sector industries utilized 2 percentage points or
20%. Thus, 70% of the growth in the services output was utilized by the service
producing industries and also by the government sector industries as intermediate inputs
in their production activities. This raises an interesting question: What happened to the
remainder of 30%? The obvious answer is that other sectors of the economy, namely
personal and non-resident sectors might have utilized it. Let us see whether there is
empirical evidence to that effect.
To answer this question on hand, the breakdown for goods and services published
in the Gross Domestic Expenditure at market prices (Income and Expenditure Accounts)
for personal and non-resident sectors has been analysed. The long-term trends of
consumer expenditure, exports and imports have been calculated and presented in
Table 3.
These data reveal that the utilization of services by the personal sector grew
substantially from 24% of the GDP in the 1960s to 26% in the 1980s and 31% in the
1990s. Although there was a marginal growth in the exports of services from 3% of the
GDP in the 1960s, 1970s and 1980s to 5% in the 1990s, imported services rose from 4%
in the 1960s, 1970s and 1980s to 6% in the 1990s. In fact, there was a net gain of
imported services to the extent of 1% of GDP in all the four decades.
27
Therefore, it can be concluded that while the growth in the services output was
absorbed to the extent of 50% by the service-producing industries and 20% by the
government sector industries, the remainder of 30% was utilized by the personal sector.
Thus, the growth in the share of services output during the past four decades was
associated with the increased demand of the service–producing industries, government
sector industries and the personal sector of the Canadian economy. This pattern of
growth in the services industries and the increased demand for services is consistent with
the latest development in the theory of modern economic growth as outlined by Simon
Kuznets.
In his lecture on “Modern Economic Growth: Findings and Reflections”,
Professor Kuznets outlined the following26 six characteristics of modern economic
growth:
“Six characteristics of modern economic growth have emerged in the analysis based on
conventional measures of national product and its components, population, labor force and the like. First
and most obvious are the high rates of growth of per capita product and of population in the developed
countries…..Second, the rate of rise in productivity…….Third, the rate of structural transformation of the
economy is high. Major aspects of structural change include the shift away from agriculture to nonagricultural pursuits and, recently, away from industry to services;……Fourth, the closely related and
extremely important structures of society and its ideology have also changed rapidly……..Fifth, the
economically developed countries, by means of the increased power of technology, particularly in transport
and communication (both peaceful and warlike), have the propensity to reach out to the rest of the worldthus making for one world in the sense in which this was not true in any pre-modern epoch. Sixth, the
spread of modern economic growth, despite its worldwide partial effects, is limited in that the economic
performance in countries accounting for three-quarters of world population still falls far short of the
minimum levels feasible with the potential of modern technology”.-(pages 248-249 of the American
Economic Review, June 1973)
The structural transformation towards growing services output in the Canadian economy
discussed earlier is the third characteristic of modern economic growth and it took place
in the 1980s as revealed in the data of the input-output tables. This characteristic was
26
Simon Kuznets, “Modern Economic Growth: Findings and Reflections”, The American Economic
Review, Volume 63, Issue 3 (June 1973), (see his lecture delivered at Stockholm, Sweden in December
1971 when he received the Nobel Prize in Economic Science),pages 247 -258.
28
also reiterated by the World Bank in its publication Beyond Economic Growth:
Meeting the Challenges of Global Development, as follows:
“Growth of the service sector: Everything that grows also changes its structure. Just as a growing tree
constantly changes the shape, size, and configuration of its branches, a growing economy changes the
proportions and interrelations among its basic sectors - agriculture, industry, and services and between
other sectors – rural and urban, public and private, domestic – and export-oriented. ……………………
Industrialization and Post-industrialization: One way to look at the structure of an economy is to compare
the shares of its three main sectors – agriculture, industry, and services -- in the country’s total output and
employment. Initially, agriculture is a developing economy’s most important sector. But as income per
capita rises, agriculture loses its primacy, giving way first to a rise in the industrial sector, then to a rise in
the service sector. These two consecutive shifts are called industrialization and post-industrialization (or
‘deindustrialization’). All growing economies are likely to go through these stages, which can be explained
by structural changes in consumer demand and in the relative labor productivity of the three main economic
sectors………
Post-industrialization: As incomes continue to rise, people’s needs become less “material” and they
27
begin to demand more services – in health, education, entertainment, and many other areas ” . (page 50-
52).
In Canada, the per capita GDP (Gross domestic Product at market prices), which
was $3,138 in the 1960s, rose to $8,185 in the 1970s, $19,451 in the 1980s, and $28,324
in the 1990s. The per capita personal income also rose significantly during the same
period from about $2,318 in the 1960s to $6,396 in the 1970s, $16,120 in the 1980s, and
$ 23,537 (Table 8)28.
Therefore, our inquiry here has revealed that the Canadian economy grew
substantially in the past four decades and is now in the post-industrialization stage as
discussed in the World Bank’s publication, Beyond Economic Growth. Also, the
empirical evidence shows that an economic structural change had occurred in the
Canadian economy in the 1980s with a substantial decline in the share of goodsproducing industries and a corresponding increase in the share of service-producing
industries.
27
The World Bank, Beyond Economic Growth, Meeting the Challenges of Global Development,
Washington, D.C., 2000, p 52
28
Source: National Economic and Financial Accounts, Statistics Canada
29
7.4 Production technologies
7.4.1 Mix of input categories
During the 1960s, the structure of production technology of all industry groups in the
Canadian economy is characterized by 31% employee compensation with 29% wages
and salaries and 2% supplementary labour income (SLI), 21% gross operating surplus
including capital consumption, 13% purchased services and 35% other inputs (Tables 4
and 6).
In the 1970s, the structure of this technology changed to 32% employee
compensation with 29% wages and salaries and 3% SLI, 20% gross operating surplus
including capital consumption, 15% purchased services and 33% other inputs.
The fact is that, from the 1960s to the 1970s, the purchased services and supplementary
labour income had a growing trend while gross operating surplus and other inputs had
a declining trend in the Canadian economy.
In the 1980s, there were further changes. The technology mix was 31% employee
compensation with 28% wages and salaries and 3% SLI, 20% gross operating surplus
including capital consumption, 18% purchased services and 31% other inputs. The
purchased services component continued to grow in that decade. The returns to the
capital in the form of capital consumption and profits stayed stable at the same level as in
the 1970s. Employee compensation had a declining trend due to the drop in the share
of wages and salaries. The declining trend in ‘other inputs’ category continued in that
decade also.
During the 1990s, the declining trend of employee compensation continued.
30
The technology mix consisted of 30% employee compensation with 27% wages and
salaries and 3% SLI, 20% gross operating surplus including capital consumption,
21% purchased services and 29% other inputs. Here again, as in the 1970s and 1980s,
the increasing trend of the purchased services continued. The decline in the share of
wages and salaries, which started in the 1980s, continued. The returns to the capital
remained almost unchanged. Other inputs, which consisted of mostly materials (goods)
for production also declined.
Thus, during the past four decades, the production technology in the industries
of the Canadian economy had an increasing trend in the utilization of purchased
services and a declining trend in the shares of wages and salaries to the own-account
work-force and other inputs, which consisted of mostly goods for production.
However, contributions to social insurance programs for the employees, which are
reflected in the supplementary labour income, continued to rise.
Of the three industry groups, the goods-producing industries had a declining trend
in all the categories except for the purchased services, which remained stable (Table 4).
The decline in the share of total inputs by the goods-producing industries was associated
with the declines in the shares of employee compensation to own account employees and
other inputs, which consisted of mostly goods for production.
In contrast, the service-producing industries had an increasing trend in all the
input categories, namely, employee compensation, gross operating profits, purchased
services, and other inputs. There was, however, no significant change in the input
patterns of the government sector industries in all categories. This suggests that the
31
government, by various measures, was able to adhere to stable spending patterns on
inputs used in production activities throughout the four decades.
The growth in the purchased services is mainly due to the financial services,
business services, and information technology services (Table 10). The financial
services include leasing of capital equipment. Therefore, if the industries use leased
capital equipment for their production activities, which seems to be the general practice,
the financial services category tends to increase. The leasing activity through financial
institutions such as banks seems to have increased substantially in Canada during the
1980s and the 1990s. The increasing trend in the financial services is associated with this
leasing phenomenon.
The growth in the health services is noticed in the government sector industries
only, because of the medicare and other related measures which were put-in-place by the
government since the 1960s. There was marginal growth in all other services and it was
shared by all the three industry groups.
7.4.2 Own-account versus external resources
Another way of examining the production technologies is by identifying the trends in the
aggregates of main input categories such as employee compensation, gross operating
surplus, purchased services, and other inputs. The employee compensation and gross
operating surplus are own-account resources while the purchased services and other
inputs are external resources, which are acquired from outside sources. As shown in
Table 5, industries in Canada used own-account resources to the extent of about 52% of
their total resources in the production activities. This share steadily declined by 1990s to
about 50%. In contrast, the share of external resources increased from about 48% in the
32
1960s to 50% by 1990s. This shift in resource utilization is due to the increasing trend in
the use of purchased services for production activities.
7.5. Analysis of inputs share categories
7.5.1. Employee compensation
Employee compensation, gross operating surplus, purchased services and all other inputs
are the four input share categories in this study. Of these four categories, employee
compensation, which consists of wages and salaries and supplementary labour income,
was the largest component with a share of 31% in the 1960s, 32% in the 1970s, 31% in
the 1980s and 30% in the 1990s for the total economy of all industry groups (Table 4).
The three industry groups had different trends in this component: the goods-producing
industries had a declining trend from 13% in the 1960s to 12% in the 1970s, 10% in the
1980s and 9% in the 1990s while the service-producing industries recorded an increasing
trend from 11% in the 1960s to 12% in the 1970s, 13% in the 1980s and 14% in the
1990s. The government sector industries had a share of about 7% in the 1960s, which
rose marginally to 8% in the 1970s, and stayed at that level in the 1980s and 1990s with
no further fluctuation.
7.5.1.1. Wages and salaries
Within the employee compensation component, wages and salaries had the same
trends as those of the employee compensation, namely, declining trend for goodsproducing industries and increasing trend for the service-producing industries with
relatively stable shares for the government sector industries (Table 6). These trends are
consistent with those recorded in the employment data of the Labour Force Survey of
33
Statistics Canada shown in Table 7. In the total employment, the share of goodsproducing industries, which was 34% in the 1970s, declined to 30% in the 1980s with a
further fall to 26% in the 1990s. In contrast, the employment share of services-producing
industries, which was 45% in the 1970s, rose to 48% in the 1980s with a further jump to
51% in the 1990s. The employment share of government sector industries, which was
21% in the 1970s, had a marginal increase to 22% in the 1980s and 23% in the 1990s.
7.5.1.2. Supplementary labour income
While the wages and salaries of the three industry groups had different trends,
the supplementary labour income had an increasing trend for the total economy as well as
for each of the industry groups (Table 6). At the total economy level, this component had
a share of 2% in the 1960s, 3% in the 1970s and 1980s, and 4% in the 1990s. All the
three industry groups shared the growth. Several factors contributed to the increased
share of SLI. Some are applicable to all industry groups (i.e., all employers covering
government and non-government), while others are related only to the government sector
industries. Those that are applicable to all industry groups (including government sector)
are the following:
•
In 1966, the Canada and Quebec pension plans came into effect. While these
plans covered only 5 years in the 1960s (1966 to 1970), they covered all 10 years
of the following decade (1970s). This contributed partly to the significant increase
in the share of SLI during the 1970s.
•
The new Unemployment Insurance Act of 1971 raised the level of employer
contributions to 1.4 times the employee contributions. In addition, there were
increases in the contribution rates in 1983 and 1991.
34
•
Large allowances consisting of severance pay and bonuses were paid to retiring
employees in the 1990s. These allowances are a component of SLI.
The following factors are applicable only to the government sector:
•
On April 1, 1970, under the authority of The Supplementary Retirement Benefit
Act, the federal government introduced the indexation program for pensions of
federal employees. Consequently, from that time, there were additional
contributions to the pension funds.
•
The governments periodically also paid actuarial deficits into the pension funds in
addition to their normal contributions, which are treated as SLI.
•
The federal government introduced an employee dental care plan on March 1,
1987. It has, since then, paid the related contributions falling under the plan.
It should be noted that, in the case of the private business containing both goodsproducing and service-producing industries, employers have their own pension plans.
These plans are called employer-sponsored registered pension plans. They are the most
common plans to which employers pay their contributions, which are accounted for as
SLI. These plans evolved gradually in the Canadian economy as follows:
•
During 1965 and 1970, legislation regulating employer-sponsored registered
pension plans came into effect in Ontario, Quebec, Alberta and Saskatchewan29.
•
All other provinces except Prince Edward Island have implemented legislation
regulating the employer pension plans since 1970.
29
Statistics Canada, Canada’s Retirement Income Programs: A Statistical Overview (1999-2000),
Catalogue Number 74-507-XPE, February 2003, Ottawa; Organization for Economic Cooperation and
Development, Private Pensions in OECD countries: Canada, OECD Social Policy Studies No.15, Paris,
1995.
35
•
The employer-sponsored pension plans are mostly Trusteed Pension Plans. Their
growth was significant in the Canadian economy as noticed from the level of
employer contributions. For example, in 1961, the employer contributions to
these pension plans amounted to $254 million in 1961 and $692 million in 1971.
These contributions rose to $3,869 million in1981, $7111 million in 1991, and
$7,346 million in the year 200030.
•
In addition to the employer contributions to the pension plans and other social
insurance programs mentioned earlier, severance pay, which the employees
receive when they retire, is also included in SLI. In other words, by definition,
the share of SLI increases not only while the employees are on the payrolls due to
the employer contributions to the plans; but also by the severance pay that the
employers pay when the employees leave the service. This definitional
characteristic of the SLI contributes to the growth in its share whether there is a
decline or an increase in the shares of employment. In the present analysis, we
have seen that there was a decrease in the employment share of goods-producing
industries with an increase in the service-producing industries and government
sector industries. The decrease as well as the increase in the employment shares
might have contributed to the growth in SLI (Table 5).
7.5.2. Gross operating surplus
Gross operating surplus contains two components: mixed income of the unincorporated
business and farmers; and other operating surplus and capital consumption allowances of
30
Statistics Canada, Canadian Socio-economic Information Management System (CANSIM II), Table 2800001 –estimates of trusteed pension funds, annual totals. Also see, Dominion Bureau of Statistics,
Trusteed Pension Plans Financial Statistics, 1962, Labour Division, catalogue No. 74-201 Annual,
Ottawa, April 1954
36
both unincorporated business and the incorporated business. At the total level, the share
of gross operating surplus was stable at about 21% in 1960s, 1970s and 1980s. However,
it declined to 20% in the 1990s (Table 9). This decline is attributable to the goodsproducing industries of the unincorporated business as well as the incorporated business.
In contrast, the share of service-producing industries of both the unincorporated and
incorporated businesses, which was 11% in the 1960s and 1970s, had a marginal increase
to 12% in the 1980s and stayed at the same level in the 1990s.
7.5.3. Purchased services
Purchased services can be studied under four main categories (Table 10):
(i)
finance, insurance and real estate services;
(ii)
business and information technology services, which include
engineering, scientific, accounting, and legal services, as well as
computer services and other business services such as courier
services;
(iii)
health services, which consist of mostly payments to physicians
and laboratories by the government under the medicare plan;
(iv)
all other services.
The first category, namely finance, insurance and real estate services, had a share
of about 3% in the 1960s and 1970s rose to 4% in the 1980s and 5% in the 1990s. This
increase in the 1980s and the 1990s was mostly attributable to the service-producing
industries and the government sector industries.
37
The second category, namely business and information technology services,
which had a share of about 1% in the 1960s rose to 2% in the 1970s, 3% in the 1980s and
4% in the 1990s. The increasing trend was shared by all the industry groups.
The share of the third category consisting of health services provided by the
government sector rose gradually from the 1960s due to a number of reasons as shown
below:
•
In 1962, the Government of Saskatchewan introduced its own ‘medicare’ plan and
started to bear the cost of health services to the public.
•
In 1968, universal health care was introduced through the national ‘medicare’
plan across Canada; since then, the provincial and territorial governments have
been incurring the costs under that plan. The share of this component, which is
composed of physicians’ and laboratory services, grew rapidly from 0.2% in the
1960s to 1.2% in the 1990s (Table 10).
In other words, health services thus came under the financial responsibility of the
government sector, beginning in the 1960s.
Their share grew rapidly in the
subsequent decades.
•
The number of patient-days in health care institutions has been increasing
significantly since 1961: hospitals across the country recorded about 40.0 million
patient-days in 1961, 50.0 million in 1971, 54.0 million in 1981 and 54.2 million
in 1991. Also, full-time hospital staff rose from about 209,000 in 1961 to 306,000
in 1971, further increasing to 321,000 in 1981 and 343,000 in 1991. These data
indicate a rise in morbidity among the population over the decades31.
38
•
There has been a steady growth in the population of seniors over the past few
decades. In 1961, seniors made up about 8% of the total population; their share
had risen to about 13% by 2000. This group normally requires more health care, a
demographic factor that might also have contributed to the increases in the shares
of all the components in the health services category32.
The last category, all other services, had a share of about 8% in the 1960s, 9% in the
1970s and 1980s, and 10% in the 1990s. The marginal growth was attributable to the
service-producing industries.
7.5.4. All 0ther inputs
All other inputs consist of goods used in the production process, indirect taxes paid to the
government and subsidies received from the government (Table 11). The share of the
other inputs was about 35% in the 1960s. It steadily declined to 33% in the 1970s, 31%
in the 1980s and 29% in the 1990s. This decline is attributable to the Goods-producing
industries as their share of 28% in the 1960s declined to 26% in the 1970s, 24% in the
1980s and 22% in the 1990s.
7.5.5. Capital consumption
For the purpose of analysis, the total capital consumption has been split into two
components: machinery & equipment; and construction by using the methodology
explained in the appendix (see Table 12 for data). On the surface, the totals of both the
components (i.e., machinery & equipment and construction) for all industry groups
showed no significant fluctuations during the past four decades. While the share of
31
The data were taken from Statistics Canada, Annual Return of Hospitals—Hospital Indicators, various
years; and Canada, Statistics Canada, Hospital Indicators, various years.
32
The data were taken from CANSIM II, Table 051-0026 (1960 to 1970) and Table 051-0001 (1971 to
2000)
39
machinery & equipment remained stable at about 3% in all the four decades, the shares of
construction remained between 3% and 4%. However, if we look at the individual
industry groups, the service-producing industries and the government sector industries
had increasing trends in the machinery & equipment component of the 1980s and 1990s.
Further analysis of the capital consumption data of machinery & equipment
component has revealed that the increasing trend of the 1980s and the 1990s was due
mainly to the growing share of information technology equipment, which was contributed
by all the three industry groups (Table 14).
7.5.6. Energy-related inputs
The combined input-shares of energy-related products such as petroleum and coal
products, mineral fuels, and electric power for the three industry groups were: 3.9% in
the 1960s, 5.6% in the 1970s, and 5.7% in the 1980s (Table 13). In the 1990s, however,
the increasing trend of the 1970s and the 1980s seemed to have reversed as it fell to
4.3%. All of the three industry groups had the same declining trend in the 1990s.
It should be recalled in this connection that since the oil crises of 1973 and 1979,
governments and industries regarded energy conservation as a key element in their
policies and invested considerable resources for research and development33. In a
research report of the Canadian Industry Program For Energy Conservation Task Force,
the position regarding the effect of energy conservation measures in the manufacturing
industries was summarized as follows:
33
Energy, Mines and Resources Canada, An Inventory of Energy Research and Development Supported by
the Government of Canada, 1978-80, Report ER 80-6E, Ottawa, October 1, 1980; Natural Resources
Canada, Improving Energy Performance in Canada, 1997-99, Report to Parliament under the Energy
Efficiency Act, Ottawa, 2000
40
“Energy conservation in the Canadian manufacturing industry is now saving $2.4 billion in
manufacturing expense each year and is growing at an annual rate of $200 million because of improving
operating efficiencies34.
“New and innovative manufacturing procedures have arisen out of this need to improve efficiency
which directly or indirectly affects the utilization of energy in all factories and plants across the nation.
These manufacturing innovations have included design of new processes, application of “just-in-time”
manufacturing scheduling systems, CAD/CAM robotics, computer integrated (manufacturing) systems,
substitution of materials, plus a host of other enrichments35.
In the 1994-95 Report to Parliament on the Administration and Enforcement of the
Energy Efficiency Act, it was mentioned that the “industrial energy intensity has
decreased considerably since 1985 and, since 1990, continuing efforts by industrial
energy users to reduce consumption have helped to limit growth in energy use”36
The finding of this study is consistent with the conclusion of the Canadian Industry
Program For Energy Conservation Task Force and the progress report of Natural
Resources Canada on the administration and enforcement of the Energy Efficiency Act.
7.5.7. Information technology inputs
In order to assess the total amount of resources used in the automation of production
activities, namely information technology, the related inputs of the basic data have been
grouped together and analysed (Table 14). The related inputs include: software and
other related services from the purchased services; parts and supplies for computer and
office equipment from other inputs (i.e., goods); and estimated capital consumption from
34
Canadian Industry Program for Energy Conservation Task Force, A Decade of Achievement 1975-1985,
Ottawa, 1986, p 1
35
Ibid.., p 2
36
Natural Resources Canada, Report to Parliament on the Administration and Enforcement of the Energy
Efficiency Act, 1994-95, Ottawa, 1995
41
the gross operating surplus. The combined share of these three inputs revealed a steady
growth from 0.3% in the 1960s to 0.6% in the 1970s, 0.8% in the 1980s, and 1.8% in the
1990s. This indicates that the spending on the automation of production activities
underwent a rapid expansion during the 1980s and the 1990s. All the three industry
groups contributed to this expansion.
8. Conclusions
Using the major input shares of the industry groups in the Canadian economy, this study
has highlighted the long-term trends of production technologies for the past four decades.
The study shows that the production technologies in the Canadian economy were
influenced not only by the structural changes such as the declining share of goodsproducing industries and increasing share of service-producing industries, but also by the
changing input patterns. The changing structural patterns had significant impact on the
shares of wages and salaries, gross operating surplus, purchased services and other
inputs. The changing input patterns are summarized below:
•
declining share of wages and salaries to own account employment
•
increases in supplementary labour income as reflected in social insurance
programs
•
increasing capital consumption of the information technology machinery and
equipment
•
expansion in contracting-out for professional and other business services
•
decreases in energy-related inputs in the 1990s
•
decreases in other inputs such as goods required for production activities
42
These general patterns along with the structural change indicate that the Canadian
economy has expanded more in the service-producing industries due to the increased
demand from all industry groups and the personal sector in the past four decades. All
industry groups preferred to downsize own-account employment, increase contractingout and investment in information technology machinery and equipment. The energyrelated inputs, which had an increasing share in the 1970s and 1980s, stopped rising and
then dropped in the 1990s due to the energy conservation measures implemented by the
government and the industries.
Of the three industry groups, service-producing industries are the most labour
intensive followed by the goods-producing industries and the government sector
industries. The observed patterns also indicate that during the 1960s, for every dollar’s
worth of resource inputs used in the production activities of the Canadian economy, the
goods-producing industries spent 54 cents whereas only 34 cents were spent by the
service-producing industries, and 12 cents by the government sector industries. By
1990s, this position has changed: the goods-producing industries spent 42 cents while the
service-producing industries spent 44 cents. While the spending of the goods-producing
industries steadily declined to 51 cents in the 1970s, 47 cents in the 1980s, the outlay of
the service-producing industries rose to 35% in the 1980s, 39% in the 1980s. The
government sector’s spending had a marginal increase to 14% in the 1970s and stayed at
the same level in the 1980s and 1990s.
The service-producing industries gained a predominant role in the Canadian
economy by the 1990s. All in all, there was a remarkable shift in favour of the serviceproducing industries in the 1980s that has continued in the 1990s.
43
The Canadian economy grew substantially in the past four decades as depicted by
the gross output and is now in the post-industrialization stage as discussed by the World
Bank in its publication Beyond Economic Growth: Meeting the Challenges of Global
Development. This is demonstrated by the empirical evidence of this study, which shows
that an economic structural change had occurred in the Canadian economy in the 1980s
with a substantial decline in the share of goods-producing industries and a corresponding
increase in the share of service-producing industries.
In the context of the structural change that occurred in the 1980s, a follow-up
study to identify the long-term trends of consumer spending on goods and services would
be useful as it could throw some light on the patterns of consumer demand in the
Canadian economy. That study could look at the data for goods and services at a more
detailed level for the past four decades.
Appendix – Split of Selected S-Level Commodities
S34 – other utilities
This S-level commodity contains four L- and W-level commodities. They have been separated
through the use of details in the concerned L- and W-level aggregations, and allocated to two
categories:
Goods
• L409 – electric power
• W5491 – water
Services
• L410 – gas distribution (the gas margin normally added to the gas price by the
gas distribution industry)
• W5491 – other utilities (containing waste removal services)
S39 – business and computer services
This has four service commodities that have been separated using the
L-level aggregation:
• L428 – engineering, scientific, accounting and legal services
• L429 – advertising services
• L436 – software development, computer services and rentals
• L437 – other services to business and persons
S22 – machinery and equipment
This commodity has been split into computers and similar office equipment (W3290: 1961
to1985; and W3291: 1986 to 2000), and other M&E (total S22 minus computers). This was
achieved through the use of W-level aggregation details.
S57 – capital consumption allowances (CCA)
44
In the CSNA, capital consumption allowances (CCA) of the government sector are measured in
terms of replacement cost, which reflects the cost of replacing the portion of capital assets used
up in production. The Income and Expenditure Division makes the necessary adjustments to the
basic data supplied by the Capital Stock and Investment Division, taking into consideration
replacement cost valuation and historical consistency of the time-series. These adjusted data are
then used as control totals in the Income and Expenditure Accounts as well as in the Input–Output
Tables.
Although the basic data supplied by the Capital Stock and Investment Division contain
details of CCA by type of asset, such as M&E and construction, only the total CCA for all
industries are used in the CSNA. In other words, the final totals of CCA used in the Income and
Expenditure Accounts and the Input–Output Tables are not broken down into M&E and
construction by industry. Since this split is required for this study, the detailed data of the
Investment and Capital Stock Division have been used as proxies to split the total CCA into M&E
CCA; and construction CCA. Furthermore, for the purpose of analysis, the data for M&E CCA
have been broken down into two groups: (a) ‘computers and similar office equipment; and (b)
‘other M&E’ by using the same source as proxies. For example, if the data of the Investment and
Capital Stock Division showed that 5% of the total M&E was used for computers in a given year,
that ratio has been applied to the total CCA data of M&E to derive the required estimate for CCA
of computers. The balance (i.e., after deducting the ‘estimated computers’ portion’ from the ‘total
M&E CCA) relates to the ‘other M&E’.
Tables
Table 1: Summary of total resource inputs in the production activities of the
Canadian economy: shares of major industry grouping by decade
1960s
1970s 1980s
Shares %
51
47
1990s
Goods-producing industries
54
Service-producing industries
34
35
39
44
Government sector industries
12
14
14
14
Total resource inputs
100
100
100
100
42
45
TABLE 2. TOTAL GROSS OUTPUT OF THE CANADIAN ECONOMY, BY MAJOR INDUSTRY GROUP
AND DECADE
1960s
Goods-producing industries
Service-producing industries
Government sector industries
Total Economy
57
36
12
105
% decade-to-decade change
Goods producing industries
Service-producing industries
Government sector industries
Total economy
1970s
1980s
$ billions
168
408
114
342
45
126
327
876
194.7
216.7
275.0
211.4
142.9
200.0
180.0
167.9
1990s
610
628
203
1441
49.5
83.6
61.1
64.5
Table 3: Long-term trends of selected components of Gross Domestic Expenditure
at market prices, by decade
1960s
Personal sector:
Consumer expenditure on goods and services:
Goods
Services
Total
Non-resident sector:
Exports of goods and services:
Goods
Services
Total
Imports of goods and services (Negative entry):
Goods
Services
Total
Net exports (exports less imports): Goods
Net imports (imports less exports): Services
1970s 1980s
% GDP
1990s
34.6
23.9
58.5
30.6
23.6
54.2
28.8
26.4
55.2
26.9
30.7
57.6
17.2
2.8
20.0
21.8
2.7
24.5
23.6
3.1
26.7
32.2
4.8
37.0
15.7
3.5
19.2
1.5
0.7
20.1
4.0
24.1
1.7
1.3
21.0
4.3
25.3
2.6
1.2
28.9
5.9
34.8
3.3
1.1
46
Table 4: Total all industries in the Canadian Economy – production technologies, by
decade and industry group
1960s
1980s
%
32.14
31.22
1990s
11.60
12.37
8.17
9.92
13.36
7.94
8.68
14.18
7.50
21.08
20.46
20.58
20.01
Goods-producing industries
Service-producing industries
Government sector industries
8.80
11.14
1.14
8.78
10.45
1.23
7.70
11.66
1.22
6.85
11.96
1.20
Purchased services
Of which:
Goods-producing industries
Service-producing industries
Government sector industries
12.85
14.64
17.46
20.39
4.56
6.23
2.06
4.78
6.92
2.94
5.15
8.85
3.46
5.30
11.37
3.72
Other inputs
Of which %:
Goods-producing industries
Service-producing industries
Government sector industries
34.83
32.76
30.74
29.24
27.60
5.63
1.60
26.07
5.14
1.55
23.83
5.18
1.73
21.52
6.08
1.64
54.02
34.31
11.67
100.00
51.23
34.88
13.89
100.00
46.60
39.05
14.35
100.00
42.35
43.60
14.06
100.00
100
100
100
100
Employee compensation
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
Gross operating surplus
Of which:
Total resource inputs:
Goods-producing industries
Service-producing industries
Government sector industries
Total economy
Total all inputs into production activities of the
Canadian economy
31.24
13.06
11.31
6.87
1970s
30.36
47
Table 5: Total all industries in the Canadian economy – production technologies, by
decade
Own- account resources:
Employee compensation
Wages and salaries
Supplementary labour income
Total employee compensation
Gross operating surplus
Mixed income
Other operating surplus
Total gross operating surplus
Sub-total own-account resources
External resources:
Purchased services
Health services
Business and computer services
Other finance, insurance and real estate
All other services
Total purchase services
Other inputs
Goods
Indirect taxes
Subsidies
Total other inputs
Sub-total external resources
Total resource inputs
1960s
1970s 1980s
Input shares %
1990s
29.41
1.83
31.24
29.59
2.55
32.14
28.33
2.89
31.22
26.78
3.58
30.36
5.56
15.52
21.08
52.32
3.66
16.80
20.46
52.60
3.31
17.27
20.58
51.80
3.58
16.43
20.01
50.37
0.23
1.38
2.98
8.26
12.85
0.72
2.06
3.33
8.53
14.64
0.96
2.83
4.37
9.30
17.46
1.16
4.21
5.18
9.84
20.39
32.48
2.90
-0.55
31.09
2.79
-1.12
29.21
2.75
-1.22
26.74
3.21
-0.71
34.83
47.68
32.76
47.40
30.74
48.20
29.24
49.63
100
100
100
100
48
Table 6: Employee compensation, by decade and industry groups
1960s
1970s
1990s
29.59
1980s
%
28.33
Wages and salaries
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
29.40
12.23
10.80
6.37
10.66
11.59
7.34
8.93
12.40
7.00
7.57
12.85
6.36
Supplementary labour income
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
1.84
2.55
2.89
3.58
0.83
0.51
0.50
0.94
0.78
0.83
0.99
0.96
0.94
1.11
1.33
1.14
Total Employee compensation
Of which:
Goods-producing industries
Service-producing industries
Government sector industries
31.24
32.14
31.22
30.36
13.06
11.31
6.87
11.60
12.37
8.17
9.92
13.36
7.94
8.68
14.18
7.50
26.78
49
Table 7: Employment by decade and industry groups
1960s
1970s 1980s
1990s
000
10,306.2 11,926.9 13,575.5
Total employment
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
Total employment
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
3,478.2
4,642.6
2,185.4
3,591.4
5,709.7
2,625.8
3,555.7
6,886.5
3,133.3
Shares %
100.0
100.0
100.0
33.7
45.1
21.2
30.1
47.9
22.0
26.2
50.7
23.1
Source: Labour Force survey, Statistics Canada, V0703-06
Table 8: Selected per capita decade annual averages
(Source: National Economic and Financial Accounts, Statistics Canada)
1960s
GDP at market prices 3,138
1970s
1980s
1990s
$
8,185
19,451
28,324
Personal income
6,396
2,318
16,120
23,537
50
Table 9: Gross operating surplus, by decade and industry groups
1960s
1970s
Mixed income:
Of which %:
Goods-producing industries
Service-producing industries
Government sector industries
5.56
1980s
%
3.66
3.31
1990s
1.89
3.67
0
1.31
2.35
0
0.72
2.59
0
0.54
3.03
0
Other operating surplus:
Of which %:
Goods-producing industries
Service-producing industries
Government sector industries (capital
consumption only)
15.52
16.79
17.27
16.43
6.91
7.47
7.46
8.11
6.97
9.08
6.30
8.93
1.14
1.22
1.22
1.20
Total gross operating surplus:
Of which %:
Goods-producing industries
Service-producing industries
Government sector industries
21.08
20.45
20.58
20.01
8.80
11.14
1.14
8.77
10.46
1.22
7.69
11.67
1.22
6.85
11.96
1.20
3.57
51
Table 10: Significant items of purchased services, by decade and industry groups
1960s
1970s
1980s
1990s
%
Business and information technology services:
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
1.38
2.06
2.83
4.21
0.72
0.48
0.18
0.93
0.75
0.38
1.02
1.33
0.48
1.42
2.19
0.60
Finance, insurance, and real estate services:
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
2.98
3.33
4.37
5.18
0.74
2.05
0.19
0.79
2.27
0.27
1.12
2.96
0.29
1.07
3.80
0.31
Health services( all in Government sector)
0.23
0.72
0.96
1.16
All other services:
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
8.26
8.53
9.30
9.84
3.10
3.71
1.45
3.06
3.89
1.58
3.01
4.57
1.72
2.81
5.38
1.65
Total purchased services:
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
12.85
14.64
17.46
20.39
4.56
6.23
2.06
4.78
6.91
2.95
5.15
8.86
3.45
5.30
11.37
3.72
52
Table 11: Significant items of other inputs, by decade and industry groups (Other inputs
represent all other inputs excluding ‘employee compensation’, ‘gross operating surplus’, and
‘purchased services’; they include ‘goods’, ‘indirect taxes’, and ‘subsidies’)
1960s
1970s
1980s
1990s
%
Goods:
32.48
31.09
29.21
26.74
27.04
3.89
1.55
25.83
3.82
1.44
23.72
3.93
1.56
21.13
4.17
1.44
Indirect taxes:
Of which:
Goods-producing industries
Service-producing industries
Government sector industries
2.90
2.79
2.75
3.21
0.74
2.11
0.05
0.84
1.84
0.11
0.67
1.92
0.16
0.63
2.38
0.20
Subsidies:
Of which :
Goods-producing industries
Service-producing industries
-0.55
-1.12
-1.22
-0.71
-0.18
-0.37
-0.60
-0.52
-0.56
-0.66
-0.23
-0.48
Total other inputs:
Of which:
34.83
27.60
5.63
1.60
32.76
26.07
5.14
1.55
30.74
23.83
5.19
1.72
29.24
21.52
6.07
1.65
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
Goods-producing industries
Service-producing industries
Government sector industries
53
Table 12: Capital consumption of industry groups, by decade
1960s
1970s
1980s
1990s
6.1
6.4
6.3
6.9
3.7
1.6
1.1
3.5
1.4
1.2
3.5
1.6
1.2
3.6
2.1
1.2
Components: A. Machinery & Equipment (M&E)
Of which :
Goods-producing industries
Service-producing industries
Government sector industries
3.0
2.6
2.7
3.1
1.8
1.0
0.2
1.5
0.9
0.2
1.3
1.1
0.3
1.3
1.4
0.4
B. Construction
Of which:
Goods-producing industries
Service-producing industries
Government sector industries
3.4
3.5
3.6
3.8
1.9
0.6
0.9
2.0
0.5
1.0
2.1
0.5
1.0
2.3
0.6
0.9
0.20
0.16
0.33
0.63
0.07
0.10
0.03
0.04
0.10
0.02
0.06
0.20
0.07
0.10
0.40
0.13
%
Total capital consumption:
Of which:
Goods-producing industries
Service-producing industries
Government sector industries
C. Part of M & E: Information Technology M&E
Goods-producing industries
Service-producing industries
Government sector industries
54
Table 13: Energy- related inputs by industry groups and decade
1960s
1970s
1980s
1990s
1.02
2.23
0.50
3.75
0.72
1.21
0.60
2.53
1.03
0.26
0.30
1.59
0.87
0.17
0.40
1.44
%
Goods-producing industries:
Petroleum and Coal products
Mineral fuels
Electric power
Total
0.94
1.25
0.40
2.59
1.01
2.44
0.40
3.85
Service-producing industries:
Petroleum and Coal products
Mineral fuels
Electric power
Total
0.76
0.11
0.20
1.07
0.89
0.22
0.30
1.41
Government sector industries:
Petroleum and Coal products
Mineral fuels
Electric power
Total
0.11
0.03
0.10
0.24
0.15
0.05
0.10
0.30
0.14
0.06
0.20
0.40
0.09
0.04
0.20
0.33
Total All industry groups:
Petroleum and Coal products
Mineral fuels
Electric power
Total
1.81
1.39
0.70
3.90
2.05
2.71
0.8
5.56
2.19
2.55
1.0
5.74
1.68
1.42
1.20
4.30
55
Table 14: Information technology inputs by industry groups and decade
1960s
1970s
1980s
1990s
%
Goods-producing industries:
Information technology services
Information technology related supplies
Capital consumption of equipment
0.04
0.03
0.07
0.08
0.06
0.04
0.05
0.09
0.06
0.10
0.20
0.10
Total
0.14
0.18
0.20
0.40
Information technology services
Information technology related supplies
Capital consumption of equipment
0.04
0
0.10
0.10
0
0.10
0.20
0
0.20
0.40
0
0.40
Total
0.14
0.20
0.40
0.80
Information technology services
Information technology related supplies
Capital consumption of equipment
0.03
0
0.03
0.08
0
0.02
0.08
0.01
0.07
0.09
0.02
0.13
Total
0.06
0.10
0.16
0.24
0.11
0.03
0.16
0.30
0.26
0.06
0.26
0.58
0.33
0.10
0.33
0.76
0.59
0.22
1.03
1.84
Service-producing industries:
Government sector industries:
Total all groups
Information technology services
Information technology related supplies
Capital consumption of equipment
Total
56
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