Innovation and Economic Development

Innovation and Economic Development

The Impact of Information and Communication Technologies in Latin America

Edited by Mario Cimoli, André A. Hofman and Nanno Mulder

Information and communication technologies (ICT) are spreading fast across Latin America and the Caribbean. This trend has brought about important economic and social changes, which have largely gone unmeasured until recently. Here, analysts from the United Nations Economic Commission for Latin America and the Caribbean along with other distinguished scholars in the field of ICT, growth and productivity provide theoretical and empirical insights to the debate on the role of ICT in economic development.

Chapter 9: A Dynamic Input–Output Simulation Analysis of the Impact of ICT Diffusion in the Brazilian Economy

Fabio Freitas, David Kupfer and Esther Dweck

Subjects: development studies, development studies, economics and finance, economics of innovation, innovation and technology, economics of innovation, technology and ict


Fabio Freitas, David Kupfer and Esther Dweck* 1 RESEARCH PURPOSES Information and communication technologies (ICT) are considered a general-purpose technology. Until the mid-1990s, however, the economic impact of ICT diffusion seemed small. This perspective underlies Solow’s famous (1987) observation that ‘we see computers everywhere except in the statistics on productivity growth’. In the second half of the 1990s, opinions began to change as several studies pointed to the important contribution of ICT to the resurgence of GDP and productivity growth in the United States. Nevertheless, several analysts questioned whether ICT would have a similar positive impact in countries with different structural features than the US economy. This questioning inspired the construction of a research agenda on the impact of ICT diffusion in various countries around the world. This chapter contributes to this agenda by analysing the impact of ICT diffusion on the Brazilian economy. We develop and apply an input–output (hereafter IO) methodology, which involved the following tasks: 1. updating the last official IO matrix available (IBGE,1 1996) with partial information from the Brazilian System of National Accounts (mainly from the 2003 make-and-use tables); disaggregating the IO matrix obtained in order to isolate the ICTproducing sectors; and developing a dynamic IO simulation model to analyse the future impact of different ICT-diffusion scenarios on the Brazilian economy. 2. 3. The chapter is organized as follows. The next section provides some methodological background on the use of IO matrices to measure and 204 M2392 - CIMOLI PRINT.indd 204 22/9/10 13:...

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