Information Technology Outlook 2002

ICTs and the Information Economy

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Information technology (IT) continues to be a major driver of economic change, restructuring businesses, affecting skills and employment, and contributing significantly to growth and wealth creation. This volume describes the main trends in industries and businesses supplying IT goods and services. It looks at the impact of IT diffusion and applications, as well as the growing importance of network effects as the use of IT expands. It describes recent market dynamics and gives a detailed overview of the globalisation of the information and communication technology (ICT) sector. It also analyses the increasingly important software sector and examines the growth in electronic commerce as well as some of the barriers to its expansion.

This volume also looks at developments in the provision and use of ICT skills, mismatches between supply and demand and potential remedies. It traces the diffusion of ICTs and examines the digital divide among individuals, households and businesses, then highlights the potential of selected technological developments that will affect the commercial exploitation and socio-economic impacts of ICTs in the medium term.

Finally, it provides an overview of IT policies in OECD countries, particularly those aimed at expanding the supply and use of ICT skills and overcoming the digital divide.

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The Software Sector

This chapter describes the latest developments, on both the supply and the demand side, in this rapidly growing and fiercely competitive industry. It highlights methodological problems which point to areas requiring further research. It first describes growth trends and shows how the software sector has grown in terms of most economic variables in the last few years and how software R&D and investment have spread throughout the economy. It then turns to international trade and foreign direct investment (FDI) in software. The next two sections look at packaged software markets, from the geographical point of view in the section on domestic markets and from the product point of view in the section on product categories for packaged software. A section on industry structure concludes the chapter.

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