Introduction

The Knowledge Economy as a relative newcomer on the labor market has taken root and grown at an amazing rate. The European Research Area (ERA) has become a framework for research policy issues in Europe. The project, proposed by the European Commission and endorsed by the Council, was designed to aid in the development of a knowledge-based economy, promoting innovation, competitiveness and employment, sustainable economic growth and social cohesion. The European Commission has stated that is imperative to monitor the transition of member and candidate member states from an industrial economy to the New Economy¹. In a recent report "The New Economy beyond the hype" the OECD reached a number of key policy recommendations for managing ICT at macro level. Among these policy recommendations were the fostering of innovation and facilitating the diffusion of ICT.

The principle catalyst in the growth of ICT use is a change from analogue transfer of information to digital. This resulted in a virtual explosion of new possibilities for use. The growth proved exponential. Investment in ICT has risen from less than 15 per cent of total non-residential investment in the business sector in the early 1980s, to between 15 and 35 per cent in 1999. Countries investing showed higher economic growth rates partially due to higher labor efficiency. Europe has assessed her position in the new technology sector within the global sector. Although her efforts have increased, they still lag behind investments made by the US. There, ICT investments in public and private sectors combined is three times more than European investments. According to a European Commission Report, "Employment in Europe 2000," the three Nordic countries Denmark, Finland and Sweden lead the rest in the spread of the new Information Communication Technologies. The Netherlands, not unlike other western, industrialized nations, is having problems filling its labor force demand for qualified ICT professionals. Germany is already using labor migration (mostly from Hungary) to fill its ever increasing demand for skilled ICT personnel. It appears that a number of the larger European countries lag behind in their overall average due to large regional differences. This is especially the case with the three largest members of the European Union, Germany, France and the UK.

The European Commission has signaled the need to get a better perspective on the recent developments, and whether this is a matter of a short-term deficiency or a more structural or long-term problem for the European labor market. A recent SINE (Statistical Indicators for the New Economy) report² named three key areas for conceptual and statistical research on the New Economy as being:

• the real characteristics and dimensions of the digital economy;
• the content and structure of the digital economy; and
• the social sphere, including impacts on the quality of life.

One of the problems that both the OECD and the European Commission has come across in researching the extent of ICT use has been a question of definitions. Although some definitions of statistical indicators have been agreed upon for the sector, a reliable definition for ICT has not been agreed upon. It would seem justified for this reason to start with an overview of ICT definitions. Defining ICT.