Information Technology and Economic Growth: A Cross-Country Analysis

Pohjola, Matti

doi:10.1093/acprof:oso/9780199243983.003.0011

Cited by 112 publications

(88 citation statements)

References 11 publications

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“…It is, however, well in line with the findings of Dewan and Kraemer (2000) and Pohjola (2001). The difference is that, unlike in these two studies, ICT is not a good explanatory factor of economic growth in OECD or highincome countries either.…”

Section: Modelling the Impacts Of Ict Investmentsupporting

confidence: 82%

“…The results obtained for developed countries are likely to be quite sensitive to its inclusion, since investment in information technology is known to be strongly correlated with investment in human capital (Pohjola 2001 There are two basic lessons to be noted from these studies. The first is that ICT's contribution to GDP growth varies considerably between countries.…”

Section: Modelling the Impacts Of Ict Investmentmentioning

confidence: 99%

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The New Economy in Growth and Development

Pohjola

2002

Oxford Review of Economic Policy

102

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The benefits from the New Economy should accrue as improvements in productivity and economic growth. But while the use of information and communication technology seems to have had a substantial impact on the performance of the United States economy, the evidence for other countries is much weaker. This study does not find any significant correlation between ICT investment and economic growth in the period 1985-99 for a sample of 42 countries for which ICT spending data are available. Even more surprisingly and in contrast with some previous studies, the relationship is not statistically significant for the subsamples of industrial or high-income countries either. There are at least three possible explanations for this apparent 'productivity paradox'. The most obvious one is the fact that not many countries, other than the US, have yet invested much in ICT. The second reason is that even if they have done so, they may not have invested enough in complementary infrastructure, like education and skills, in order to reap the benefits from ICT investment. Technology by itself is not a solution to any development problem; it only provides an opportunity. The third and the most controversial explanation is that the neoclassical method applied in assessing the …/.

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Section: Modelling the Impacts Of Ict Investmentsupporting

confidence: 82%

Section: Modelling the Impacts Of Ict Investmentmentioning

confidence: 99%

The New Economy in Growth and Development

Pohjola

2002

Oxford Review of Economic Policy

102

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“…During recent decades, the IT productivity paradox has been revisited periodically by many researchers (Baily, 1986;Berndt & Malone, 1995; Brynjolfsson & Hitt, 1995; David, 1990; Dewan & Kraemer, 1998;Jorgenson & Stiroh, 1995;Kraemer & Dedrick, 1994;Lee & Khatri, 2003;Oliner & Sichel, 2000;Oliner, Sichel, & Stiroh, 2007;Pilat, 2004;Pohjola, 2000;Rei, 2004;Spithoven, 2003 This is not the case for CRM investment.…”

Section: Why Revisit the It Productivity Paradox?mentioning

confidence: 99%

“…This phenomenon became known as the 'IT productivity paradox'. Some researchers have reporting an end to the paradox, but this paper brings the research up-to-date suggesting that reports of an end to the paradox is most likely due to rapid IT industry growth in the run up to the Year 2000 phenomenon.During recent decades, the IT productivity paradox has been revisited periodically by many researchers (Baily, 1986;Berndt & Malone, 1995; Brynjolfsson & Hitt, 1995; David, 1990; Dewan & Kraemer, 1998;Jorgenson & Stiroh, 1995;Kraemer & Dedrick, 1994;Lee & Khatri, 2003;Oliner & Sichel, 2000;Oliner, Sichel, & Stiroh, 2007;Pilat, 2004;Pohjola, 2000;Rei, 2004;Spithoven, 2003 This is not the case for CRM investment.Modern methods make it possible to capture more accurate data. New data processing and collection approaches are able to quantify previously difficult to measure impacts of ICT, revealing new opportunities for research.…”

mentioning

confidence: 99%

Information technology (IT) productivity paradox in the 21st century

Hajli

Sims²,

Ibragimov³

2015

International Journal of Productivity and Performance Management

113

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Information technology (IT) investment since the 1970s coincided with poor productivity gains: the 'IT productivity paradox'. This phenomenon is still poorly understood. This research replicates methods employed by previous studies for comparability but employs a two-level approach: First macroeconomic indicators; second labor and multi-factor productivity. The findings suggest IT investment has high positive correlation with gross domestic product (GDP) growth, but not labor or multi-factor productivity. This ambiguity suggests the paradox is still poorly understood. Studies reporting an end to the paradox are likely due to rapid IT industry growth in the run up to the Year 2000 phenomenon. -12-2012-0129 Page 1 of 27 Why revisit the IT Productivity Paradox?Information and communication technology (ICT) can be considered the key factor driving economic growth in industrial societies (Pohjola, 2000). Investing in information technology (IT) is widely regarded as having enormous potential for reducing costs, enhancing productivity, and improving living standards (Murakami, 1997). However, since the 1970s productivity growth in most world economies has slowed, while expenditures on ICT have risen (Rei, 2004). This phenomenon became known as the 'IT productivity paradox'. Some researchers have reporting an end to the paradox, but this paper brings the research up-to-date suggesting that reports of an end to the paradox is most likely due to rapid IT industry growth in the run up to the Year 2000 phenomenon.During recent decades, the IT productivity paradox has been revisited periodically by many researchers (Baily, 1986;Berndt & Malone, 1995; Brynjolfsson & Hitt, 1995; David, 1990; Dewan & Kraemer, 1998;Jorgenson & Stiroh, 1995;Kraemer & Dedrick, 1994;Lee & Khatri, 2003;Oliner & Sichel, 2000;Oliner, Sichel, & Stiroh, 2007;Pilat, 2004;Pohjola, 2000;Rei, 2004;Spithoven, 2003 This is not the case for CRM investment.Modern methods make it possible to capture more accurate data. New data processing and collection approaches are able to quantify previously difficult to measure impacts of ICT, revealing new opportunities for research. Many arguments relating to time lags (David, 1990), can now be tested by updating and extending the research to the current period.It is thus important to revisit the productivity paradox. Investment in ICT exceeds all other categories of investment yet evidence from firm level studies suggest returns are questionable, and evidence from aggregate studies suggest either poor productivity gains, or more recently, positive correlation between investment in ICT and productivity gains. This paper provides an update on the phenomena and tests these more recent findings.There is no up-to-date information related to aggregate productivity issues (previous studies cover the period up to 2000), this research extends coverage to the 1995 to 2005 period, avoiding the latter half of the first decade of the 21st century during which productivity data might be dominated by the effects of the s...

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“…On the one hand, it is suggested as input to user and on the other hand, information and communication technology industry is output for manufacturers. Technological revolution is known with rapid improvement in the quality of equipment and software, along with a sharp decline in prices [2]. Thus, firms whose aim is the maximum profit replace the equipment, software and services so they can react to these changes with the rapid advancement of technology to enhance their own interests.…”

mentioning

confidence: 99%

To Compare Information and Communication Technology on the Employment of Two Industries Yazd and Kerman (Panel Data Approach)

koochakzadeh¹

2015

Int J Econ Manag Sci

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IntroductionOECD definition of information and communication technology is defined as the sum of manufacturing and service industries to maintain, transmit and display data and information electronically is used. Technological revolution with the rapid improvement of the quality of the equipment and the software is known by coming with a very larger education in prices. Information and communication technology has a dual role in the economy Inputs for users and outputs for producer of information technology and communications industries. Firms maximize profits by observing the relative price of their placement equipment, information and communication technology, software and services react rather than other goods and services. There for information and communication technology is achieved from distinctive three-part computer interaction, information and communication [1].Information and communication technology has dual role in the economy. On the one hand, it is suggested as input to user and on the other hand, information and communication technology industry is output for manufacturers. Technological revolution is known with rapid improvement in the quality of equipment and software, along with a sharp decline in prices [2]. Thus, firms whose aim is the maximum profit replace the equipment, software and services so they can react to these changes with the rapid advancement of technology to enhance their own interests. The main conditions for the development to information technology is special are test and efficient, the shortage of staff is a major factor in the lack of technological development. The world is now passing and changing desirable status to the status quo. So we can expect a variety of careers in the information technology field is created. Developing countries are in urgent need for information technology specialists to have their employment. Apart from the issue of the establishment of training courses of reeducated people who can communicate in the digital age will not have sufficient skills and abilities [3]. Information and communication technology at the same time creats employment, it has been employment de bugger. The evidence indicates that acts as a catalyst for economic growth and employment. When daily activities are mechanized and productivity increases. Production costs and delivers will reduce. In other words, final price will decline for buyer. And consequently, the demand for buying increases. The information technology has led to accurate and timely information has always been available to applicants and it enables them to make timely and better decisions or decision-making. This would reduce its share of costs, Profit increases and economic growth facilitate. It is a fact that due to industrial activity, demand for labor in some industries reduces. Although the other hand, new jobs are entering the labor market. Some of these jobs include web design, expert web main tenant and management bases, expert systems, multimedia, satellite transmission technicians, technician global p...

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Information Technology and Economic Growth: A Cross-Country Analysis

Cited by 112 publications

References 11 publications

The New Economy in Growth and Development

The New Economy in Growth and Development

Information technology (IT) productivity paradox in the 21st century

To Compare Information and Communication Technology on the Employment of Two Industries Yazd and Kerman (Panel Data Approach)

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