Dispersion of commercial Internet use

Basic access to the Internet is now part of the basic investment needed to do business, according to a NBER working paper by Chris Forman, Avi Goldfarb, and Shane Greenstein. Using data from a commercial market analysis shop, they found that the average rate of adoption of at least the minimum capacity

to use e-mail, browse, and passively share documents is a bit over 88 percent of establishments with 100 or more employees. Such participation approaches saturation in most industries. The NAICS sectors with the highest rates of participation were information, utilities, and professional, scientific, and technical services. The only sectors with Internet participation rates below 90 percent were retail trade, agriculture, forestry, fishing and hunting, and educational services.

Enhanced use of the Internet-for enterprise resource planning, customer service, education, publication, purchasing, or technical support was also widespread among industries, but at much lower rates than simple participation. The lead sectors for enhanced Internet use (rates in excess of 25 percent) were management of companies and enterprises and the information sector. The overall adoption rate for enhanced Internet applications was about 12-1/2 percent.

Among metropolitan areas, participation varied by size and by the pre-existing spatial distribution of industries. Large metropolitan areas (population greater than 1 million) had the highest participation and enhancement rates and small areas (population less than 250,000) had the lowest. The large metropolitan areas with the greatest degree of Internet participation were San Francisco, Denver, and Cleveland.