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The Economic Impact of ICT

Measurement, Evidence and Implications

image of The Economic Impact of ICT

Information and communications technology (ICT) has become a key driver of economic growth over the past decade. The rapid diffusion of the Internet, of mobile telephony and of broadband networks all demonstrate how pervasive this technology has become. But how precisely does ICT affect economic growth and the efficiency of firms? And how well can these effects be measured?

This report provides an overview of the economic impact of ICT on economic performance, and the ways through which it can be measured. Using available OECD data, the first part of the book examines the available measures of ICT diffusion, the role and impact of ICT investment and the role of ICT-using and ICT-producing sectors in overall economic performance. The second part of the book offers nine studies for OECD countries, based on detailed firm-level data and prepared by researchers and statisticians from a wide range of OECD countries. These studies use a variety of methods and provide detailed insights on the effects of ICT in individual countries.

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The Effects of ICTs and Complementary Innovations on Australian Productivity Growth

Australia experienced both rapid uptake of ICTs and strong productivity growth in the 1990s. Growth accounting has established some links between the two, but the existence of productivity gains from complementary product and process innovations remained uncertain. Analysis in this paper using firm-level data from the Australian Business Longitudinal Survey shows positive and significant links between ICT use and productivity growth in manufacturing and a range of service industry sectors. Firm-characteristics were found to be important in identifying businesses using ICTs while significant interactions were also found between ICT use and complementary organisational characteristics (including skill, improved business practices and business restructuring) in raising productivity. Transition dynamics and time lags were of importance. After an initial productivity boost associated with the uptake of selected ICTs, productivity effects were estimated to have tapered off over time. Thus, the study suggests that the ultimate productivity effect of a new innovation is a step up in levels, rather than a permanent increase in the rate of growth...

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