Technology People and Productivity - The Ratio Of People To Dollars

The graphic above provides another look at productivity, this time by economic sector. Shown here are major sectors of the U.S. private economy and the number of people it took in 1997 to produce a million dollars' worth of output.

The largest sector in total output is Wholesale Trade ($4,059 billion) closely followed by Manufacturing ($3,842 billion). The smallest sector is Educational Services ($65 billion) — not to be confused with "Education," a public sector activity, and by far the largest "industry" in the nation.

It is fairly clear from these data that two kinds of industries cluster toward the bottom — the region of highest productivity: (1) capital intensive activities where machinery as replaced people and "embodies" human intelligence (manufacturing, utilities, mining) and (2) activities where symbolic commerce dominates (brokering as in wholesale trade, finance and insurance, educational services, and information services).

In the middle range are industries where people deliver services directly (entertainment, professional and technical services), where automation is particularly difficult (transportation and construction), where the nature of the industry and its geographical dimension require a human agent (real estate), and where people are needed to interact with the customer intensely to make a sale (retail).

Three sectors require intensive human activity. Health care is, undoubtedly, still the most people-to-people of the services. Administrative support includes travel agents, employment agencies, temporary help providers, janitorial services, and waste removal. The hospitality and restaurant sector remains one of the most traditional, still delivering its services very much as it did a hundred years ago; in hotels and restaurants, ample staff often means a better ambiance. In this last grouping of sectors, automation is either inherently impossible (e.g. temporary help agencies), undesirable from the customers' point of view (health care, hotels, restaurants), or very resistant to automation (waste removal).

In the next panel we will show trends in two sectors — one in the first group, manufacturing, and one in the more resistant second group, construction.

Source: U.S. Department of the Census, 1997 Economic Census.