Telecommunications Policy 40 (2016) 291–306

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Telecommunications Policy

Cloud adaptiveness within industry sectors – Measurement
and observations
Katharina Candel Haug a, Tobias Kretschmer b,n, Thomas Strobel a
Ifo Institute, Poschingerstr. 5, 81679 Munich, Germany
ISTO and ORG, LMU Munich, Kaulbachstr. 45/II, 80539 Munich, Germany

a r t i c l e i n f o abstract

Available online 14 September 2015 Cloud computing combines established computing technologies and outsourcing advan-
Keywords: tages into a new ICT paradigm that is generally expected to foster productivity and
Cloud computing economic growth. However, despite a series of studies on the drivers of cloud adoption,
Information and communication evidence of its economic effects is lacking, possibly because many of the datasets on cloud
technologies computing are of insufficient size and often lack a time dimension as well as precise
Technology diffusion definitions of cloud computing, thus making them unsuitable for rigorous quantitative
Firm organization analysis. To overcome these limitations, we propose a proxy variable for cloud computing
Productivity usage—cloud adaptiveness—based on survey panel data from European firms. Observations
based on a descriptive analysis suggest three important aspects for further research. First,
cloud studies should be conducted at the industry level as cloud computing adaptiveness
differs widely across industry sectors. Second, it is important to know what firms do with
cloud computing to understand the economic mechanisms and effects triggered by this
innovation. And third, cloud adaptiveness is potentially correlated to a firm’s position in
the supply chain and thus the type of output it produces as well as the market in which it
operates. Our indicator can be employed to further analyze the effects of cloud computing
in the context of firm heterogeneity.
& 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC
BY license (

1. Introduction

Although mention of “the Cloud,” or cloud computing, is now ubiquitous in daily life, our understanding of what it
actually is and how it changes private and corporate structures is surprisingly limited. Most people recognize cloud
computing as a fairly recent development in information and communication technology (ICT). However, the wide range of
opinions of what constitutes cloud computing and how it affects households and enterprises is a partial reflection of the
many different uses of cloud computing and the resulting lack of a universally accepted and understood definition of it.
Beginning several decades ago, advances in processor and related technologies and the spread of the personal computer,
as well as server structures and communication infrastructure like the Internet, helped automatize production and supply
chains and facilitate management and administration. ICT as a whole was expected to have a great influence on the
productivity of industries and economies. Indeed, as suggested by Cardona, Kretschmer, and Strobel (2013), ICT has some of
the hallmarks of enabling or general purpose technologies that are widely adopted and induce further innovations.

Corresponding author. Tel.: þ49 89 2180 6270.
E-mail addresses: (K. Candel Haug), (T. Kretschmer), (T. Strobel).
0308-5961/& 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license

This was the first step toward a network of computers. Jorgenson. the commercial world is characterized by a trend toward sharing. 1990) that was the result of isolated innovative processes and extended data transmission possibilities. which has spurred investment in IT and communication equipment (Jorgenson. One of our contributions is that we propose an indirect measure of current or prospective cloud computing adoption that allows researchers to use existing large-scale firm-level panel datasets to analyze cloud diffusion and productivity effects via a reliable and plausible proxy. We utilize the widely used Harte Hanks technology database for 13 European countries and the years 2000 through 2007 to develop our cloud indicator and then merge this technology data with balance sheet information from the ORBIS database. In Section 3. Mainframes had high upfront costs for hardware and software and were therefore optimized for efficiency. However. These productivity effects coincided with a massive reduction in hardware prices over the last decades. 1996. 2003) and Tambe and Hitt (2012) on the effect of computers on firm-level productivity. This is of particular importance as many extant surveys do not employ a precisely defined or even generally accepted measure and longitudinal studies are yet to be conducted. in our sample. we make six observations on firm-level cloud computing regarding possible correlates of adoption and the correlation between firm productivity and cloud computing in the context of structural differences in industry sectors. From shared infrastructure to cloud These days. or both? 3. data on this phenomenon continue to be scarce. Interestingly. Jorgenson (2005) finds that despite productivity growth rates being by far the highest in ICT- producing industries. We need to understand why firms implement cloud solutions and what they actually do with the Cloud. Do they intend to increase productivity or flexibility. Personal computers. 2002.3 million net new jobs between 2010 and 2015 (Center for Economics & Business Research. services exhibit especially high adoption rates. where one machine filled a large room and served all the researchers or employees of an institution. IBM was the most important producer and developer of this kind of computing architecture (Bresnahan & Greenstein. who therefore shared the infrastructure. For example. Section 4 introduces the data and our measure of cloud adaptiveness. As ICT became more widely used. Applying our indicator to the data. As adaptiveness of cloud computing differs widely across industry sectors. introducing capacity sharing across organizations. frustratingly for researchers wanting to investigate and quantify the growth impact of cloud computing. Erik. were . Market research estimated the global private and corporate cloud computing market to have reached $56. These were mostly found in universities and governmental organizations. Cloud adaptiveness is potentially correlated to a firm’s position in the supply chain and thus suggests a linkage of cloud adaptiveness and the type of output the firm produces as well as the market in which it operates. However. Brynjolfsson. (2013) give an overview of research on aggregate and firm-level ICT productivity effects. major structural changes and productivity-enhancing effects are expected from the usage and diffusion of cloud computing. We derive the following three suggestions for further research: 1. 2003. Section 5 presents six observations from descriptive analyses of this dataset. Similar empirical evidence is given by Brynjolfsson and Hitt (1995. The economic benefits of cloud computing adoption in the business segment of Europe’s largest economies are estimated to have created 2. 2005). Pallis. Candel Haug et al. sharing companies. 2010).1. and open design platforms (Gansky. & Hitt. & Stiroh.6 billion (on public cloud services only) in 2014 and it is projected to more than double that by 2018 (IDC. 2005. 1996. 2001. / Telecommunications Policy 40 (2016) 291–306 Various authors identify positive productivity effects from ICT utilization (Brynjolfsson & Hitt. crowdsourcing. 2. its main growth contribution came from total factor productivity (TFP) growth in ICT-using industries while growth rates in ICT-producing industries plateaued (Jorgenson. 2010). Section 6 concludes. The newly founded insurance company CompuServe. such as the Commodore PET (introduced in 1977) and the Amiga 1000 (1985). Ho. started renting out idle computing capacity to other companies around 1970. We aim to advance the understanding of enterprise cloud computing as well as of the firms using it and the potential mechanisms triggered by implementation of this innovation. mostly for hosting their e-mail systems and storing files in electronic form. 2014) reports that 19% of EU enterprises used cloud computing in 2014. We first outline the concept and market of cloud computing (Section 2). A primer in cloud computing 2. 2010). “The Cloud” as a logical continuation of ICT-specific services emerged as an architectural innovation (Henderson & Clark. 2001). studies on cloud computing should be conducted at the industry level.292 K. Eurostat (Giannakouris & Smihily. 2014). Cardona et al. the overall contribution of these industries to economic growth in the United States has been rather limited due to their low share of the economy. confirming aggregate findings and painting a more nuanced picture. The history of computing and IT begins in the late 1950s with the arrival of the first mainframe computers. Bresnahan. 2. Jorgenson. These observations show how the economic effects of cloud computing could be analyzed using our indicator so as to provide initial insight into empirical cloud computing economics and shape an agenda for further research on cloud computing. Hence. for example. compile existing first steps toward a theory of cloud computing economics and review the empirical literature on the topic. information technology sharing has a long tradition. 2007). hardware advances favored decentralization.

hosted and run in the cloud. Resource pooling allows for specialization and the realization of economies of scale on the provider side. . While mainframes required terminals with a command-line interface. 2013). broad network access is indispensable to access and use cloud services (Armbrust et al. allowing for hosts to be less capable (Bresnahan & Greenstein. cloud computing involves pooling IT resources such as storage or processing in a virtual system serving multiple users.. Finally. but cloud users also benefit from additional services and scalability of capacities (Lin & Chen. this thin client network system was a precursor to cloud computing (Leavitt. PCs were easy to use and assumed some of the computing tasks. especially software developers. Mell & Grance. the Internet spread farther and farther and became faster and faster.. K. 2011). Firms outsource their IT systems either completely or partially. 1 shows. So what is cloud computing? Cloud computing is actually a new manifestation of an “old trend. Suciu et al. & Todoran. (2) Platform as a service (PaaS) refers to access to platforms that allow customers.” involving preexisting computing concepts and a novel combination of established components (Armbrust et al. From the mid-1990s onwards.. in contrast to simple server usage. began to compete with the IBM System 360 family of mainframes (Cusumano. However. The key characteristic of cloud computing is the virtualization of resources and services. Cloud computing is billed based on a pay-per-use pricing scheme. (3) Infrastructure as a service (IaaS) is a more basic service mostly offering access to storage capacities (National Institute of Standards and Technology. which reduced the upfront investment costs of IT-using firms and also improved the systems’ agility. renting storage space or computing power from specialized providers. As Fig. There are three deployment models of cloud computing. linked up to build a firm network. 2013. high-speed networks further drove the development of cloud computing (OECD. and pricing as the key defining features of cloud relative to conventional computing. 1). Capacities are assigned dynamically according to demand. where thin client systems or the Internet were used to provide software services to a small number of users. 2012). Operating systems and software were written and licensed by software companies. This definition mirrors the widely accepted definition of cloud computing by Mell and Grance (2011) of the US National Institute of Standards and Technology (see Fig. cloud computing allows rapid elasticity (scalability) of resources and firms order and pay for only the capacity they actually need at that specific moment. 2010) and eventually prevailed. This type of client/server structure predominated in the 1980s and 1990s. Vulpe. Cloud computing combines the efficiency of a mainframe with the agility of a client/server system. Together with grid and utility computing. This is somewhat similar to earlier hosting services. 1. users therefore cannot locate their data in a certain geographic area. Apostu. cloud users often can purchase computing resources without any human interaction and at short notice (on-demand self-service). modern thin clients could run applications and services hosted by a server with a graphical user interface. to test or deploy their own applications in the cloud. An early innovation quite similar to actual cloud computing involved application service providers (ASP). / Telecommunications Policy 40 (2016) 291–306 293 Fig.2. Halunga. 2009).0 standards before a system using relatively simple code and that could be widely accessed was possible (Grossman. The services provided are automatically measured. Suciu. where a customer purchases access to an application. However. which not only leads to resource optimization but also facilitates billing. 2. 2009. 2009. NIST definition of cloud computing. simplicity. Candel Haug et al. Importantly. 1996). Source: Mell and Grance (2011). the idea of using a mainframe to centralize vital functions and capacities continued to survive. (1) Software as a service (SaaS). it took the development of open-source software and the adoption of Web 2. such as enterprise resource planning (ERP) or customer relationship management (CRM). While traditional computing requires heavy upfront investment with fixed capacity. The spread of reliable. 2009). 2009). Grossman (2009) identifies scale. 2009. OECD. 2013).

making cloud computing an important business- to-business (B2B) market. we focus on the user side of the market. specialization. Cardona et al. so that most cloud carriers are telecommunication operators providing Internet access and connection (National Institute of Standards and Technology. Haucap. 2011. Instead. they identify no universal cost advantage of cloud computing over on-premises IT systems. Lam (2013) studies cloud providers’ capacity investment incentives according to different market structures. Marston. Flexibility gains from cloud computing also affect firm organization. Marston et al. with Google (Google Drive). and firm organization One of the central economic results of cloud computing is the changing cost structure at the firm level.. National Institute of Standards and Technology. Google. or Amazon is cost efficient for less demanding applications. The flexibility of cloud computing even lowers entry barriers for new firms or sectors. A prominent example is Dropbox. The cloud computing market The cloud computing market is comprised of four major groups of actors: cloud consumers. including maintenance and upgrades of the system (Marston et al. First. In other words. & Tai. and the like. there are no comparable data on cloud computing. there is consensus in the literature that cloud computing reduces total IT costs for firms or at least for SMEs. flexibility. and risk while gaining flexibility. Cloud computing users do not have to invest in powerful personal computers and servers and hence do not incur high upfront investment and related capital costs. Also. 2013). Bayrak. carriers. Finally. using cloud services avoids opportunity costs due to underutilization of local IT equipment and outdated software and security standards (Prasad. but have to weigh them against the transaction costs of the outsourcing process (Riordan & Williamson. Brumec and Vrček (2013) model the costs of cloud computing usage and compare them with the costs of a de-novo on-premise computing system and show that leasing computing resources from Microsoft. & Wilkie. 2009. Conley. The biggest consumer groups are firms. with users having developed a more precise idea of their needs. and enablers or complementors (Gerpott & May. 2011). brokers.. However. providers. making them cloud complementors. Microsoft (Windows Azure).. 2011). 1985). John. Cloud enablers or complementors are auditors. adoption and use of cloud computing” (Marston et al. Etro. A third organizational and 1 In this paper. which might lead clients to change their outsourcing behavior as they are losing bargaining power. & Stühmeier. Zhang. with products ranging from a complete cloud-based IT solution to select individual services. cloud computing could create up to 1 m jobs in the European Union. 2014. and suppliers refining their business models to meet them. Candel Haug et al. 2013). and pricing. Hence. . 2014). cloud auditors are expected to become of increasing importance in the near future due to growing security concerns. (2013) document that IT usage. This cost advantage could originate from a specialized cloud computing vendor reaping economies of scale vis-à-vis an in-house IT solution. 2012. 2011. and IBM (BlueCloud) distant followers (SearchCloudComputing. cloud enablers add value to bare-bones cloud services. Cloud computing economics A review of the literature on cloud computing reveals that academic research is still exploratory and generalizable results few and far between. 2009. / Telecommunications Policy 40 (2016) 291–306 2.3. but stores its data on Amazon’s Simple Storage Service (S3) (TechTarget Glossary. but that it is still preferable to execute highly complex applications on-premises. Green. To our knowledge. 2011).294 K. Hecker and Kretschmer (2010) call it “general wisdom [that] specialized outsourcing providers can produce more cost efficiently due to economies of scale. & Heales. overall costs. Cloud carriers provide interconnection from providers to consumers. in which tasks and peak times can be more diversified (Armbrust et al. there is as yet no empirical evidence confirming this cost advantage. or additional-value service providers. On the supply side of the public cloud market.1. 2011.. Second. 2013). Stepping. Etro (2009) conducted a macro-simulation and finds that by lowering entry barriers. Nimis. Moreover. interesting economic issues include competition and industry structure. Li. 3.1 3. This changing cost structure is considered to chiefly benefit small. such as maintenance. 2009. typically measured as the number of PCs in a firm. 2011. 2011). On the provider side. they incur variable expenses in the form of operating costs or pay-per-use fees (Armbrust et al.”2 and better utilization of equipment (Brumec & Vrček. updates. & Ghalsasi. the number of IT staff on-premises can be reduced as cloud services handle many tasks previously undertaken by traditional IT staff. 2013). prior work studies the possible economic effects using small samples or individual firms. Bayrak et al. Cloud users can benefit from these efficiency gains.. Other enablers include consultancies that help firms implement cloud architecture. we have vendors that own and operate the required data centers and platforms. cloud enablers “sell products and services that facilitate the delivery. as they have limited funds to invest in assets and suffer from unused peak capacities more than do large firms. 2011). Klems. capacity investment (Lam 2013). which offers storage and file sharing solutions. Bräuninger. the firm can react more quickly to changing conditions in its business environment. Costs. Bandyopadhyay. In addition to the changing cost structure. Yoo.and medium-sized enterprises (SME). Amazon (with Amazon Web Services) is the dominant provider.. 2 Hecker and Kretschmer (2010) further state that markets with high scale economies tend to concentrate. The common view in the literature is that cloud computing enables firms to reduce their fixed investments. The cloud computing market is close to a state of maturity. positively affects firm productivity.

small and medium-sized enterprises (SME) are expected to benefit most from adopting cloud computing. and Solana-González (2013) and Stieninger and Nedbal (2014) include 94 firms from Spain and nine from Austria. production processes. which is why the literature has thus far focused on SMEs. Second.. K. The Technology-Organization-Environment (TOE) framework applied to the cloud Based on the findings discussed above. Further. collaboration with business partners. and the resulting research agenda we take a first step toward closing this gap. The service sectors are expected to especially benefit from adopting cloud computing as they often dispose of huge amounts of data. a firm needs to be able to assimilate the innovation. 4. and Li (2013) study cloud adoption in SMEs by conducting semi-structured interviews and analyzing the resulting data using the Technology-Organization-Environment (TOE) framework (explained in more detail in the following section). we structure our argument along the lines of Tornatzky and Fleischer (1990). While 3 Note. Finally. 2013). Benlian. Candel Haug et al. Conversely. first observations. and a generally low level of cloud computing in the company’s sector.. 2009). 1996). g. 2012. consisting of the industry.3.1. Hess. Cloud computing and SMEs As mentioned above. They find that except for competitive pressure. Unfortunately. and the like. need to exchange data with clients. The third determinant identified by Tornatzky and Fleischer (1990) is the firm’s environment. by Carcary. The study did not investigate drivers of adoption but a surprising 35% of survey participants claimed to be unaware of any cloud computing benefits. Most of the studies on SMEs involve a fairly small sample and typically focus on one sector and/or one country. and Conway (2013) finds that the most important reasons for cloud non-adoption are security concerns. While most studies assume SMEs to be more likely to adopt cloud computing. neither study explains how cloud computing is defined. a firm’s incumbent ERP system may be just such a substitute. this one of Irish SMEs. and customer-faced services (Klems et al. ERM. By contrast. 3. First. or work from various or different locations. so that “alignment between the objectives of an organization’s IT strategy and business strategy is directly related to IT effectiveness and overall business/organizational performance” (Carcary et al. as a well-performing substitute is already available (Shy. allowing for changes in corporate culture. / Telecommunications Policy 40 (2016) 291–306 295 potentially productivity enhancing effect of cloud computing is the alteration of business processes. all factors of the TOE framework were relevant for the adoption of cloud services. regulation. . none of the studies we found explicitly address heterogeneity between industries or discuss explicit productivity effects. who identify three broad areas that determine a firm’s adoption decision and the subsequent efficiency gains. Kern. Data 4. market structure and competition. Existing microdata Benlian et al. Papagiannidis. 2013). the innovation has to fit the firm’s existing equipment and processes. 2014). Overall. (2013) show that among SMEs. It is shown that firm mechanisms and dynamics differ significantly by size (Mack & Rey. Stieninger and Nedbal (2014) find that firms are afraid that their corporate image will be negatively affected if they use cloud computing and that they are also concerned about security and privacy management. 2008). Another interview-based study. the literature focuses on small firms as the decrease in upfront investment and the increase in flexibility are of particular advantage for these firms (Aljabre. the firm’s position in the supply chain. and so forth. CRM) with regard to potentially adopting them in the form of software as a service (SaaS). its market power. the lack of time for implementation. (2009) asked approximately 400 top IT executives of German firms to rate different application systems (e. as well as its needs (technological context). albeit an insignificant one. smaller firms are more likely than larger ones to adopt cloud computing. 3. If a firm already has a sufficient technological infrastructure. Moreover..2. Similar transforma- tions occurred after the implementation of earlier technologies such as ERP and CRM (McAfee & Brynjolfsson. 2002. Alshamaila. In the case of cloud computing. firms with a security-sensitive environment might deliberately choose not to use cloud computing (Kshetri. that a high current level of technological infrastructure may also reduce the incremental benefits of adopting a new technology. the firm is more likely to be able to implement the innovation successfully and to realize economic benefits. The survey samples of Trigueros-Preciado.3 An important prerequisite for cloud computing is an interconnected IT system within the firm and a broadband connection to the Internet. regulatory factors across countries may also matter for cloud adoption. Kreijger. For cloud computing. such as size. Alshamaila et al. 2014). Pérez-González. With our indicator. and the industry in which it is active all may (or may not) result in external pressure or requirements to adopt cloud computing. However. Stieninger & Nedbal. & Willcocks. the necessity and success of an innovation adoption depends on the firm’s organizational characteristics. the adoption of cloud computing is expected to shift the production possibility frontier of firms outward and thus should result in higher total factor productivity. Doherty. All three parts of the TOE framework seem to affect cloud computing adoption. however. and Buxmann (2009) find that large firms have a head start in SaaS adoption. respectively.

Groupware. (3) share of laptops among all firm PCs. Candel Haug et al. Firms using this kind of IT structure are likely to introduce cloud computing at some point. network devices. an important feature of cloud applications. However. 4 Varian (2010) terms this combinatorial innovation. Laptops point to flexible working patterns. (2013) state that cloud computing is an evolutionary regrouping of earlier IT elements. We merged the technology data with financial data from the Bureau van Dijk ORBIS database so as to have company information on sales. 4. including mobile access to firm data. we compute the average across firms for each year and attribute a value of 1 to all firms with a number of network devices per employee or a share of laptops above the respective year’s mean value. allowing particularly fast data transfers. and (4) usage of groupware software (Fig. and Deutsche Telekom AG (2010). rather. 1990). interconnected IT resources. There is information on cloud computing usage in the latest Harte Hanks data waves. and Pernias (2012). Loebbecke. The CITDB has been used in prior studies such as Bresnahan et al. This concept is based on the notion that existing technologies offer a vast set of components that can be combined and recombined to create new products and services. To do this. Forman. This means that firm employees are connected via IT and use common platforms.2. We transform the two continuous input measures—number of network devices per employee (1) and share of laptop computers (3)—into dummy variables. or software. This is exactly how cloud computing came to be. and usage of different hardware and software.000 European firm locations. they are cloud ready or cloud adaptive. However. assets. we need a variable for cloud computing usage that is consistently measured and invariant to who responds to the survey. (2002). Thomas. helps employees communicate or share documents. such as Lotus Notes. and Ullrich (2012) and Carcary et al. 2). A firm is considered cloud adaptive if all four criteria are met (see Fig. which is that an innovation is not always a departure from core concepts or a radical change of components’ architecture. laptops. The sample is largely representative. and so forth. With this information we construct a composite indicator of cloud adaptiveness based on the concept of architectural or combinatorial innovations (Henderson & Clark. We proxy a firm’s organizational readiness by its usage of groupware software and the share of laptop computers. Miravete. Network devices allow direct access to internal networks or the Internet. we neither know exactly what was measured nor can we say anything about diffusion patterns given these studies are in a cross-section. 1990) and the TOE framework (Tornatzky & Fleischer. changes the linkages between the components and therefore constitutes an architectural innovation. . The number of observations with cloud computing information is very low in our sample. When studying potential drivers of innovation adoption. Kretschmer (2004). most likely in the form of leased priority lines and broadband. surveys revealing decision makers’ preferences are the correct methodological choice. / Telecommunications Policy 40 (2016) 291–306 these first exploratory results on the drivers of cloud computing adoption and economic effects are helpful. A WAN indicates that a firm has a good network connection. Goldfarb. Our definition of cloud adaptiveness matches the concept of architectural innovation developed by Henderson and Clark (1990). The variables are: (1) number of network devices per employee. We therefore construct our measure by studying the usage and combination of crucial IT resources that together lay the groundwork for cloud computing in a firm. (2) usage of a wide-area network (WAN). Our dataset covers the years 2000 through 2007 and includes general firm characteristics like the number of employees and industry classification. thus creating a common workspace. IT employees. and the standardization of data were and are well-known components. To identify economic effects. but also likely to be particularly open to data transfer and interconnection. which was developed by the market intelligence firm Harte Hanks and covers more than 260.296 K. and Kretschmer. 2). 2012). as well as IT-specific information such as the number of desktop PCs.4 We define technological and organizational readiness and will assess other organizational characteristics and the firm environment in our subsequent empirical analysis. but the variable’s informative value is limited as there is no information on the underlying definition of cloud computing or on how the technology is understood by the person interviewed. adopting cloud computing is less costly and acceptance among employees likely to be high. in other words. KPMG (2013). The same drawbacks are found in studies conducted for or published by firm research entities such as Deutsche Bank (Heng & Neitzel. We assume that a firm with extensive network access possibilities and a good connection infrastructure is not only ready to use cloud computing in a next step. platforms. Centralized computing and storage. especially if the surveys also include non-adopters. the idea of virtualizing computer and server structures and offering software. “the essence of an architectural innovation [is] the reconfiguration of an established system to link together existing components in a new way” (Henderson & Clark. To proxy a firm’s technological readiness for cloud computing adoption we use information on the number of network devices per employee and on the existence of a wide-area network (WAN) in the firm. and Greenstein (2012). however. Firms using groupware and with a high share of laptops have already implemented organizational patterns compatible with a centralized and flexible IT structure. and platforms as a service. We build our indicator of cloud adaptiveness as a dummy variable that takes the value 1 if all four variables that describe the conditions for cloud adoption take the value 1. CITDB contains detailed information on other IT resources and elements used in firms. with a slight bias toward medium-sized and large enterprises. infrastructure. Our data and measure of cloud adaptiveness We use the CI Technology Database (CITDB). For them. 1990). A cloud adaptive firm might already be using cloud computing or may adopt in the near future.

but. implying that all four factors are equally important in classifying a firm as cloud adaptive. thus providing an early set of empirical findings on cloud computing at the firm level. Candel Haug et al. Observations on cloud adaptiveness Our cloud adaptiveness measure captures a firm’s technological and organizational readiness to adopt cloud computing. the dataset has been proven useful and reliable in a number of academic studies. For the paper’s productivity analyses.. adaptiveness serves as a proxy for cloud computing.434 companies in 13 European countries. In a survey. Cloud adaptiveness indicator. Further. Another limitation is the equal weighting of the indicator’s four input variables. the readiness of a firm to use it. the questions that need to be asked to obtain our input variables can be answered clearly and unambiguously. However. as we preferably wanted to set up a general measure of cloud adaptiveness. we use a second sample (productivity sample) that is more restricted than the first sample due to the availability of variables needed to estimate the productivity measure (total factor productivity. we abstained from such an approach in our study. The first sample (adoption sample) is comprised of 73. However. Our data cover the years 2000–2007. a limitation of our indicator is that it does not measure cloud computing as a technology or computing paradigm. the term “cloud computing” has not been well defined—neither in academic research nor by practitioners. we split the sample into technologically sophisticated firms (firms whose PC intensity is above the sample median of PC intensity) and non-sophisticated firms: 99% of the non-sophisticated firms are also non-cloud- adaptive. a limitation of our analysis is that the Harte Hanks data were not collected by a research institution. We cannot measure the outsourcing and the scalability characteristics of a cloud and thus provide a lower bound of potential effects associated with being cloud adaptive. 2. / Telecommunications Policy 40 (2016) 291–306 297 Fig. This is a typical problem when working with proxies and cannot be entirely overcome. instead. Source: Authors’ own diagram.28. Firm-level surveys asking about the “usage of cloud-computing” are thus of limited explanatory power. 5. such as size) and at the firm environment (such as industry or supply chain position). As a robustness check. the indicator was constructed by focusing on the technological and organizational readiness for cloud computing and therefore measures a particular form of sophistication. However. The correlation between the sophistication dummy and the cloud dummy is 0. We use two unbalanced panel datasets for our analysis. This means that the sampling methodology does not guarantee representativeness and the questions are derived from practical considerations. a period during which actual cloud services were not yet widely used.5 We now apply our measure of cloud adaptiveness to the data and investigate the distribution and characteristics of cloud adaptive firms. TFP). to date. regression-based approaches of constructing composite indicators typically require a priori information on the selection of a dependent variable as target variable. Additionally.g. see the Appendix. While the structure of our measure can be used for other datasets as well. Moreover. Clearly. K.g. The descriptive observations in this section follow the TOE framework by looking at correlates of cloud adaptiveness (e. We develop a first measure of the phenomenon based on more precise firm-level data. . 5 For more information on the data. while 47% of the non-cloud-adaptive firms have a PC intensity above the median so that one does not automatically imply the other. This is a simplification that cannot be remedied as long as there are no other studies on cloud computing and the transition from more traditional IT systems. Alternative approaches of varying weighting schemes like e. we document the productivity levels of cloud adaptive firms. organizational characteristics of cloud adaptive firms. we might be measuring a firm’s technological sophistication rather than its actual cloud adaptiveness. Given the variables and timeframe of our dataset.985 observations from 25. Our measure of cloud adaptiveness contributes to the literature by allowing researchers to use existing large-scale datasets for their work.

In our panel. We would expect large firms (those with more than 249 employees) to be clearly ahead of small firms (those with less than 50 employees) when implementing productivity-enhancing IT. 2011) while avoiding high upfront investment. 3). First. almost by definition. financial services are highly data intensive. small firms catch up within several years whereas medium-sized firms do not. standardized systems often cannot satisfy the varying needs of the different firm departments. The characteristics of cloud technology differ from those of general IT and the literature contends that SMEs benefit more from cloud computing due to its pay-per-use and scalability features. While our results match our expectations at the beginning and end of our panel period. whereas the share of large-firm adopters continues to rise.’s (2009) finding that when it comes to SaaS adoption. ORBIS. Finally. large firms often have professional IT departments that keep abreast of trends and constantly work to optimize the company’s IT structure. This coincides with Benlian et al. which could explain this sector’s high share of cloud adaptive firms (Fig. Cloud adaptiveness by firm size. while small firms are less able to make this type of investment and thus are not expected to be among the early adopters (Mack & Rey. there is no significant difference between small and large enterprises. 2004). this also means that they might achieve lower cost advantages from cloud computing adoption than smaller firms as large firms might already be realizing economies of scale with their original data centers and IT networks (Marston et al. Source: Harte Hanks. Prasad et al. the early catching up of small firms is not that surprising after all. at the organizational level. However. For example. 2014. / Telecommunications Policy 40 (2016) 291–306 Fig. 1996). Sample: Adoption sample. there is empirical evidence that large firms imitate innovations more quickly than small ones (Geroski. Hence.2. The transaction costs of becoming cloud adaptive are therefore lower for small than for large firms. which is lower than that of large firms. However. Rogers (1995) states that size is “probably a surrogate measure of several dimensions that lead to innovation. 5. 2011. Hence. 4).. Conversely.. small firms’ tasks tend to be more homogenous and generate rather uniform data. 6 Our definition of the service sector includes business and financial services as well as trade and partly privatized sectors such as health or education. firms with 249 employees and less (small and medium-sized) have similar levels of adaptiveness. .1. Candel Haug et al. Service firms are more cloud adaptive than manufacturing firms We expect to find heterogeneity across sectors in cloud adaptiveness. Later in the sample period. Shy. 2000). the situation of medium-sized firms is ambiguous. 2009) and are expected in the case of cloud computing as well. large firms have the financial means to afford high investment in IT. it does capture whether firms have a highly interconnected IT structure and use central communication platforms. but this finding does not lead to easily interpretable stylized facts about firm adoption behavior. However. 3. the cloud adaptiveness of small firms plateaus. While the different structures and challenges of small and large firms are intuitive to a large extend. Second. for the years 2004 through 2007. small firms exhibit the same level of cloud adaptiveness as large firms in 2002 and 2003. the market in which it operates. and. Further. allowing firms a degree of financial and capacity flexibility (Sultan. authors’ own calculations. However. Large firms are early adopters but small firms catch up quickly Differences in adoption behavior between smaller and larger firms are found in several empirical studies on general IT (Nguyen.298 K. Our adaptiveness dummy cannot reflect this property. The industry in which a firm is active shapes the firm’s technological needs as well as its organizational characteristics.” 5. our results over time are somewhat surprising (Fig. large firms may have experience with early cloud-like structures. firm size seems to be associated with cloud adaptiveness. Large firms tend to have a more complex task structure than small ones and thus need various types of software and hardware (Kretschmer. It does not cover public administration or utilities. 2014). The tertiary or services sector6 is typically more data intensive than the manufacturing sector.

storing and transmitting large amounts of data. 2010). 4. but this view has changed dramatically with tertiarization and information technologies (Musolesi & Huiban. 1985). particularly in sectors where product lifecycles are short. the latter. 9 Of course. where supply-chain optimization. / Telecommunications Policy 40 (2016) 291–306 299 Fig. 7 In the German-speaking countries. (2013) find that the majority of the cloud adopters in their sample are companies active in the KIBS sector. & Otto 2015). which themselves produce capital goods. However. however.9 Also. This statement applies more generally to supply chains. but still has higher rates of adoption than intermediate sectors. automated processes. Musolesi & Huiban. being upstream industries. Traditionally.7 5. which can be a highly data-intensive process. indeed. 2012). factors of production—capital.0” (Hermann. which requires sophisticated data management and transfer systems. intermediate goods sectors are usually more specialized and therefore do not need the same flexible interconnecting capacities as businesses in the capital or consumer goods sectors. upstream capital goods industries are more cloud adaptive than downstream consumer goods industries. are surprisingly non-cloud-adaptive (Fig. increased use of procurement platforms might result in upstream sectors catching up. industrial electronics. it not only has high technological requirements. Scalability and mobility are crucial in services. The same holds for knowledge- intensive business services (KIBS) (Mack & Rey. processing research and trading operations and computational algorithms for risk management. Data-intensive applications are also required in logistics and transportation. A survey of the fashion and apparel sector discovered that one reason for the limited use of e-business applications within the industry was the “lack of interoperability between the many systems in use” (DG Enterprise & Industry. More precisely. labor. which link up to form an industry-wide supply chain (Porter.8 A possible reason for this is that upstream sectors are not incorporated into e-business operations as much as sectors in the middle and closer to the end of the supply chain. 2010) such as consulting or IT outsourcing that create value by transferring their knowledge to clients. mostly supplying technically advanced machinery for production. In our data. this phenomenon has been termed “Industry 4. K. but also engages in marketing and sales activities. In manufacturing. in manufacturing firms producing on-premises. More sectoral-level research is needed to better understand the role of cloud adaptiveness in single sectors. upstream firms provide materials and intermediate inputs to firms more downstream the supply chain. 2014.” in which production is highly interconnected and computer optimized. The consumer goods sector is less cloud adaptive. Candel Haug et al. a traditional server structure is often more appropriate. In their survey of Irish SMEs. In production theory. Sample: Adoption sample. In manufacturing. 5). and requiring time-sensitive communication with clients and trading partners. These are then used by firms farther down the supply chain to produce consumer goods. we use the European statistical definition of main industrial groupings according to Commission Regulation (EC) No 656/2007 of 14 June 2007. as the capital goods sector is embedded at different stages of the value chain. 8 To classify industries. Goods are often tailored to customer needs. which depend more on markets and customers. authors’ own calculations. and materials—serve as inputs to firms’ internal value chains. and consolidation of global supply-chain providers are a source of competitive advantage. services were viewed as technologically backward and passive adopters of technology. ORBIS. . and measurement equipment show higher cloud adaptiveness than firms in the consumer and intermediate goods industries. Carcary et al. firms in the capital goods sectors such as machinery.3. Source: Harte Hanks. Cloud adaptiveness by sector. Pentek. this could change with the advent of “smart factories.

5. and the absence of widespread cloud certification services. 2012). In our data. while retail trade and regulated. Data security and quality of services are requirements a health-care network or cloud system needs to fulfill. In services. For example. in contrast to other service sectors. Haucap. requiring not only the treatment but also the exchange of data permanently and in real time. / Telecommunications Policy 40 (2016) 291–306 Fig. the highest shares of large firms are in the finance (high cloud adaptiveness) and retail (low cloud adaptiveness) sectors. education. as well as wholesaling. Hence. Cloud adaptiveness in manufacturing. 5. Cloud adaptiveness in the services sectors. cloud adaptiveness can differ significantly within single supply chains In our sample. 6.4. They resell to retailers. are the most cloud adaptive service sectors. who in turn sell the goods to private consumers. but that information exchange and teleconferencing are not widespread. that is.10 This is intuitive as business and financial services are very data-intensive sectors. are the least likely to be cloud adaptive firms (Fig.300 K. They find that doctors and hospitals use some ICT applications. the low cloud adaptiveness of these sectors could be due to insufficient service stability. Falck. and Kühling (2013) analyze the diffusion of e-health. Fig. 6). but also a flow of goods. the wholesale sector is one of the most cloud adaptive service industries. and social services. a still incomplete legal framework for (international) cloud services. along the supply chain (Prajogo & Olhager. interconnecting ICT applications in the health-care sector. whereas retail shows a very 10 Cloud adaptiveness of a sector is not correlated with firm size in the sector. the lack of each of which leads to a lack of trust and security in cloud computing. they have not only a flow of information. A characteristic of the retail and wholesale businesses is that. unregulated market sectors are more cloud adaptive than nonmarket sectors. business and financial services. Candel Haug et al. . such as health. state-dominated industries. Wholesale firms work closely with producers but they do not produce goods themselves.

The partly insignificant differences might be due to higher within-sector firm heterogeneity. Cloud computing could further enhance these advantages. without using the same IT structure and communication channels. cloud adaptive firms are more productive than non-cloud-adaptive ones and we also find significant mean differences for almost every sector. there is empirical evidence that cloud computing and firm productivity are highly correlated. measured by total factor productivity. 11 We find the same qualitative results in the services sectors. Brynjolfsson & Hitt. 7(1). This method accounts for biased coefficients of the production function originating from unobserved productivity shocks by explicitly modeling capital and intermediates within the estimation. These findings underline the importance of accounting for the specific nature of cloud computing as it is incorporated in technical change. The retail trade market is currently experiencing the emergence of large players that pressure smaller suppliers into the adoption of their specific IT systems (DG Enterprise and Industry. 7(2)). This is surprising at first sight as both are closely vertically related and basically execute very similar tasks. wholesale tends to operate at a global scale and therefore faces a much greater challenge in organizing both the flow of information and the flow of goods. However. The correlation between a sector’s cloud adaptiveness and the productivity difference between adaptive and non-adaptive firms in this sector is slightly negative. In all service sectors. not necessarily both. This method ensures consistent estimates of inputs in the production function and thus enables unbiased calculation of total factor productivity by subtracting estimated input contributions from output. By contrast. Hence. IT-driven intra-industry productivity differences are found in several studies controlling for various other factors (e. see also Van Beveren (2012). it reflects the joint influence of a host of factors and therefore it is easily misinterpreted as technical change. which further allows for the incorporation of spillovers and therefore proxies for cloud computing as a general purpose technology. chemicals. As labor productivity is only a partial productivity measure.6. not only communicating and negotiating. this is not what we find in the data (Fig. Looking downstream.14 This finding shows a strong heterogeneity among a sector’s cloud adaptiveness and its firm-level productivity performance. a locally operating retail firm requires less e-business interaction. We therefore expect retail companies to catch up. We find no significant differences in the financial sector or in the health/education/social sector. Cloud-similar technologies are not necessarily adopted in the sectors where they allow for the highest productivity We would expect industries in which cloud adaptive firms have a large productivity advantage to also have a high adaptiveness rate. it is a more appropriate measure of technical change. 8).. Candel Haug et al. Our analysis does not allow drawing causal conclusions on the productivity effects of cloud computing or cloud adaptiveness. A global wholesale company needs to be constantly in touch with geographically dispersed producers. / Telecommunications Policy 40 (2016) 291–306 301 weak disposition toward cloud computing (Fig. An alternative productivity measure is total factor productivity (TFP). the time period most productivity studies focus on (Tambe & Hitt.5. For further explanation. we follow Levinsohn and Petrin (2003). 14 Note that in this section we consider both manufacturing and service sectors. 2012). cloud adaptive firms are more productive Evidence on the productivity effects of adopting cloud applications is scarce.g. We would expect similar intra-industry effects driven by modern ICT like cloud computing and its direct precursors. Interestingly. except for the machinery sector. 5. they also are more successful in the choice and employment of technologies. Retail business is generally locally oriented. cloud adaptive manufacturing firms generally exhibit higher average labor productivity12 compared to manufacturing firms that are not as cloud adaptive. but also observing and analyzing the development of international markets. IT integration of a supply chain is not costless. (2013) confirm that most studies use either PC intensity or IT capital as a measure for IT. Their operations differ in scale and complexity though. with regard to cloud adaptiveness. 6). it is surprising that companies upstream and downstream the supply chain can cooperate without being fully integrated.13 According to our estimates (Fig. A causal specification needs to resolve whether these productivity differences are driven by cloud adaptiveness. especially since integrated logistics system can help reduce shortages and optimize inventories (Prajogo & Olhager. which can no longer be measured based on capital as services became an essential part of it.11 In Fig. in the near future. Still. . 13 To estimate TFP at the firm level. these improvements are either in labor productivity or in TFP. Employing our cloud adaptiveness measure for two different types of productivity measures separated by industries provides some initial observations on the productivity of cloud adaptive and non-cloud-adaptive firms in manufacturing sectors. K. and transport equipment. there are TFP differences throughout all manufacturing sectors. 2012). In manufacturing. that is. the residual in the firm’s output function after having controlled for capital and labor as physical inputs. 2012). which was reasonable in the 1990s. these companies manage and maintain a large distribution network. Not only do cloud adaptive firms achieve higher sales per employee. Standardized cloud computing solutions might be cheaper and more widely compatible. 1996. However. However. 2012). 5. Cardona et al. Tambe & Hitt. Sectors with large differences in labor productivity are instruments. Cachon and Fisher (2000) conducted an empirical study on the value of information sharing in a grocery supply chain between supplier and retailer. as TFP abstracts from the effect of inputs. They find that implementing information technology such as scanners and electronic data interchange (EDI) that allows quicker order processing and sharing of demand and inventory data can reduce supply chain costs by as much as 10%. but the picture is less clear. 12 Labor productivity is measured as sales divided by employment.

(a) Labor productivity in manufacturing. they can secure the survival of the firm in the medium or long run. more productive firms might be more cloud adaptive in general. This can be due to limited needs of this technology in the sector. a given adaptiveness in the print sector is associated with relatively low TFP differences between cloud adaptive and non-cloud-adaptive firms. One driver of adoption is flexibility gains (see Section 3). particularly at the start of an innovation adoption lifecycle. (b) TFP in manufacturing industries. / Telecommunications Policy 40 (2016) 291–306 Fig. One potential explanation why firms’ productivity advantages are not necessarily associated with its cloud utilization across all sectors is reverse causality. Another reason for adoption is pressure from business partners or the necessity of integrating into a supply chain (see Section 5.g. If a firm observes a cloud productivity potential in its sector. Candel Haug et al. become cloud adaptive and realize the productivity advantage. Another explanation of the low adaptiveness in sectors with a high productivity potential is a first-mover advantage meaning that the firms that became cloud adaptive first realize productivity advantages other firms cannot. bounded growth potential of the industry or particular market characteristics. so that TFP differences between cloud adaptive and non-cloud-adaptive firms in a sector only weakly correlate with the adaptiveness share.4). Moreover. Further. 7. While these measures might not be productivity-enhancing in the short run. That is. While e. adoption of the software and hardware that readies firms for cloud computing might be driven by factors other than direct productivity gains. However. the same given adaptiveness is associated with high TFP differences between firms in retail.302 K. it might take a while to catch up. recall that the productivity measure of TFP is not input driven. firms often choose to adopt for non- .

/ Telecommunications Policy 40 (2016) 291–306 303 Fig. or IT departments that are autonomous and agile in their adoption decisions.g. however. we aggregated the Harte Hanks dataset to the company level or extrapolated where required. 6. We develop a measure of cloud computing that lets us examine its diffusion pattern and its association with firm productivity across industries. does not necessarily benefit a large fraction of the firms in this sector. Further. The first step was the identification of all establishments that belong to one company. given that the concept of cloud computing is very broad. a market intelligence firm. Interestingly. a manager’s interest in technology. Candel Haug et al. or even more fine-grained aspects). Finally. conducts annual telephone surveys to take stock of specific IT types used by individual sites (establishments) of more than 10. the economic effects of cloud computing can be understood and a consistent framework of cloud computing economics can be developed. In the long run.000 German firms. data-collection efforts should focus on a representative panel. TFP differences and cloud adaptiveness. care should be taken to discover which elements of cloud computing firms actually implement (e. and collect information on how cloud computing affects firm costs. survey firms on their business and production processes that use a cloud service. economic reasons. Appendix A. Our findings show that firm size is not a good predictor of cloud adaptiveness per se. As the CITDB data are collected at the establishment level while the ORBIS database covers the company level. cloud computing adoption varies based on a firm’s position in the supply chain and thus suggests a linkage of cloud adaptiveness and the firm’s type of output or its market power in addition to its industry. Dataset We use a dataset with data from two sources: (1) the Harte Hanks CI Technology Database (CITDB) and (2) Bureau Van Dijk’s ORBIS. be based on a precise and thorough definition of cloud computing. rather. especially at the firm and industry level. and what they actually do with it. More specifically. Conclusion Cloud computing is expected to generate productivity effects in firms and growth in the economy. and organization. IaaS. With a view to the currently still poor data situation. SaaS. Harte Hanks. We also find that the service sector is more cloud adaptive than the manufacturing sector and that it is especially business services and the financial and wholesale sectors that are most cloud adaptive. PaaS. we suggest employing our cloud adaptiveness dummy in future empirical research on cloud computing and the underlying economics of it. for example. innovativeness as an important part of corporate image. future work should attempt to discover the key characteristics that prompt firms to adopt cloud computing and result in successful. Our measure builds on an existing panel of firm-level data and takes into account the genesis of cloud computing as an architectural innovation. We thus observe firms’ cloud computing adaptiveness over time and study adoption and productivity patterns at a stage where comprehensive firm-level panel datasets on cloud computing are not yet available. productivity-enhancing implementation.. 8. This productivity advantage. it is other firm characteristics that are correlated with the adoption decision. Our six empirical observations give us an opportunity to suggest an agenda for further research. By modeling and quantifying such underlying mechanisms. We . With the help of the TOE framework and based on this paper’s observations. communication. to understand the underlying potentially productivity-enhancing mechanisms. K. Our approach enables scholars to work on diffusion and productivity and to establish appropriate econometric identification strategies that help test theoretical predictions. studies on cloud computing should be conducted at the industry level due to massive heterogeneity. in the manufacturing sector we find positive productivity differences between cloud adaptive and non-cloud-adaptive firms.

“Other sectors” include the primary.96 Other 7152 9.36 Large ( Z 250) 7771 23.1 0 1 Groupware (GROUP) 73. % Num.14 11.95 Medium (50–249) 39.25 14. Wholesale.608 100.761 56. Refer to Tables 1–4 for sample statistics.69 7194 4. Candel Haug et al.526 23.50 1 0 1 Share of laptops among all firm PCs (LAP) 73. personal.16 0. Notes: A firm can grow or shrink throughout the panel. and public administration sectors. Wholesale.97 994 2.451 62.89 9143 6. construction.48 Data: Harte Hanks CI Technology Database. Financial Sector.51 Industries Manufacturing 20.09 0.567 50. ORBIS balance sheet data. matched bvd (Bureau van Dijk) company IDs to the CITDB site IDs using the company name.18 Firm size Small ( o 50) 8270 25. and repair services. amusement sector). The service sectors include Retail. of obs. Next. we had two types of technology variables to aggregate: dummy variables were set to 1 at the firm level if any of the company’s establishments used this technology.53 0 177.98 Services 25. Adoption sample Num. of firms % of cloud adaptive firms In 2000 In 2007 Total sample 73.53 0. Adoption sample Num.83 3328 8.30 1 0 1 Cloud adaptiveness (Cloud) 73. public utilities.53 9. Financial Sector.94 Industries Manufacturing 41.985 457. Business Services.05 Medium (50–249) 16.04 4090. Integers.4 Wide-area network (WAN) 73.74 1.5 and 5.304 K. unbalanced panel from 2000 to 2007. of obs.985 0. ORBIS balance sheet data. As the data structure is rather complicated and sometimes misleading. Notes: A firm can grow or shrink throughout the panel.09 Large ( Z 250) 17. Employees 73. Business Services. % Num.67 2593 2. and Other Services (legal. unbalanced panel from 2000 to 2007.90 0. In this paper we use two different extracts from the resulting panel dataset: (1) The adoption sample for Sections 5. GROUP. and Other Services (legal.30 Data: Harte Hanks CI Technology Database. and the three-digit SIC code of every observation. We chose this approach because of the high number of missing data points for the balance sheet variables required for the productivity analysis. and public administration sectors.71 9.17 10.68 14.29 0 0 1 Notes: Descriptive statistics are based on observations.06 6671 7.93 11. not firms.13 7.6. Health/Education/Social.434 5. of network devices per employee (NET) 73.65 Other 2598 7. The service sectors include Retail. Mean Std.51 9.81 5995 6. public utilities. Transportation.985 0.44 13. / Telecommunications Policy 40 (2016) 291–306 Table 1 Sample statistics and distribution of cloud adaptiveness in the adoption sample. Table 3 Sample statistics and distribution of cloud adaptiveness in the productivity sample.05 14. personal.396 53. amusement sector).65 9. of firms % of cloud adaptive firms In 2000 In 2007 Total sample 32.00 25.23 105 1 260.73 7.698 5.36 2909 3.985 100. the results were cross-checked carefully and in some cases weighted.985 0.91 11.58 Firm size Small ( o 50) 17. were summed and expressed as relative numbers (per employee). such as the total number of PCs. construction.072 33.13 7.985 0. the zip code.1–5.69 0.091 5.4 of the paper and (2) the more restricted productivity sample for Sections 5. Max. Adoption sample Num.71 6545 5. Median Min. and 0 otherwise. of obs. for example. .063 23. Transportation.61 12. dev. Table 2 Descriptive statistics of input variables in the adoption sample. Health/Education/Social.31 3552 7.070 Num.43 Services 9559 29.20 0.00 11. and repair services. “Other sectors” include the primary.985 0.076 5.

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