Internationalisation of European ICT Activities

pp 6-83

Concepts and Theory

  • Paul J. J. WelfensAffiliated withEuropean Institute for International Economic Relations (EIIW), University of Wuppertal
  • , Michael VogelsangAffiliated withEuropean Institute for International Economic Relations (EIIW), University of Wuppertal

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Information and Communication Technology (ICT) is a core sector of the modern manufacturing industry and trade in goods, but it also concerns IT services and telecommunications services, meaning that the services sector and services trade are also affected. Part of ICT sectors are technology-intensive and knowledge-intensive, but there are certainly some activities which are also characterized by low knowledge-intensive and rather modest skills. The case of call centers is one prime example. At the other end of the spectrum, we find such activities as chip production and advanced software which could be characterized as high technology/high-knowledge intensive. While such a broad classification at the two-digit level of industry (or trade) is adequate, the increasing tendency of the ICT sector to realize considerable fragmentation — that is splitting up the value-added chain — requires adequate differentiation in terms of classification. While the design of a chip or software development is to be characterized by high technology/high knowledge-intensity, the production of wafers or the writing of standard software codes (as part of a complex software package) represents medium technology intensity. From this perspective ICT is, of course, not a homogenous sector.