Which Industries Use the Internet?

Our study provides an industrial census of the dispersion of Internet technology to commercial establishments in the United States. We distinguish between participation, that is, use of the Internet because it is necessary for all business (e.g. email and browsing) and enhancement, that is, adoption of Internet technology to enhance computing processes for competitive advantage (e.g. electronic commerce). We find that participation and enhancement display contrasting patterns of dispersion. In a majority of industries, participation has approached saturation levels, while enhancement occurs at lower rates with dispersion reflecting long standing industrial differences in use of computing. In general, lead adopters were drawn from a variety of industries, including many of the same industries that lead adoption of other generations of information technologies; however, the appearance of water transportation and warehousing as leading industries in Internet adoption shows that the Internet influenced establishments where logistical processes played a key role. We find large differences across industries and we caution against inferring too much from the experience in manufacturing despite the widespread availability of data in that sector.