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Vertical Sector

16. The term "sector" is employed in a variety of ways in common usage. This paper proposes a working definition of a vertical sector as a national grouping of firms that have a coherence of interest, usually characterised by a high degree of commonality in the production of goods or services.

17. Commonalties exist at different levels. For example, the Growth and Innovation Advisory Board (GIAB) has suggested that there are some common issues for the primary industries as a whole that could be addressed through engagement at this high level.² Within any broad vertical sector, there will, however, be narrower sub-sectors. For example, the Creative Sector, identified in GIF, has been disaggregated into more cohesive and compact sub-sectors.³ Sectors may also have a geographic concentration in "clusters", which may be a particular focus of regional economic development policy.

18. There are two potentially conflicting issues of scale when defining a vertical sector. These are whether the sector is sufficiently:

• compact or well-organised enough to facilitate efficient collective consideration and action; and
• large enough in terms of its current and potential economic impact to justify government engagement.

General Purpose Technologies

19. "General purpose technologies" (GPTs) are technologies, or sets of technologies, that have the potential to impact across many or all sectors, eventually leading to widespread productivity gains. They include "technologies" in the traditional sense, which may be produced by a sector (such as the internal combustion engine and electricity), but also "organisational" technologies (such as mass production and flexible manufacturing techniques).

20. Typically these GPTs are often created for quite narrow purposes, but because of their potential widespread application across a variety of products and processes, they come to pervade an economy's production, organisational, and social systems. ICT is an obvious example.