Chapter 13: The impact of ICT investment on knowledge accumulation and economic growth
* Adriaan van Zon and Joan Muysken 13.1 INTRODUCTION Ever since Solow’s observation that computers are everywhere except in productivity data, people have been concerned about the apparent inability of ICT to live up to its productivity promises. However, the wide scope for application of ICT, speciﬁcally in data and signal processing, and more generally in organising and streamlining the way we do business and live our lives, suggests that ICT is essentially a general purpose technology (GPT). The GPT literature has provided a compelling story of why, after the advent of a drastic innovation, productivity growth may seriously fall behind expectations. In fact, most GPT papers suggest a slump in growth after the arrival of a technological breakthrough because of the redirection of R&D eﬀorts needed to extend the new technology to make it more profitable to be adopted by its prospective users (Helpman and Trajtenberg, 1998; Greenwood and Jovanovic, 2000; David, 2000). It should not come as a big surprise then that it takes time before the full impact of ICT on productivity growth may be felt, since there are all kinds of adjustment problems to be dealt with ﬁrst (Kiley, 1999). But now there is evidence that the impact is indeed building up, certainly so in the US (Oliner and Sichel, 2000; Stiroh, 2002), even though the measurement of total factor productivity (TFP) and the contribution of ICT is fraught with diﬃculties – see Jorgenson (2001) for a survey. The question that immediately arises is:...
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