Post on 01-Jan-2016
Measuring ICT Impact on Growth: a Survey of Recent Findings
Vincenzo SpieziaSenior EconomistHead, ICT UnitDirectorate for Science, Technology & IndustryOECD
ICT: a General Purpose Technology
Some technical change comes in small incremental improvements; some comes as radical changes in products and processes.
Every once in a while a new technology comes onto the scene that impacts on more or less everything in our lives: •what we produce•how we produce it•how we organize and manage production •the location of productive activity •the infrastructure we need •the laws we require concerning such things as property rights and permitted forms of business organization.
Richard Lipsey calls such technologiesGeneral Purpose Technologies (GPTs)
In my presentation, I will try to make…
4 points about ICT and Growth:
1.It is not only about productivity
2.Productivity depends on intangibles…
3.…but intangibles are fed by ICT
4.Research Agenda
What we produce
ICT as a product innovation
ICT and GrowthICTs area major driver of GVA growth in
OECD •ICT sectors have been growing faster than non-ICT•ICT services even faster•Particularly computer & related services
Similar trend for employment growth
ICT and Growth
ICT sector feeds growth through 3 channels:
• Final demand: ICT offers new goods and services for consumers;
• Demand multiplier: ICT increases demand for the output of other industries;
• Supply multiplier: ICT creates new opportunities for the supply to other industries.
Final demand
Communications have been the fastest-growing household expenditure item since 1995
ICT services have been the fast-growing category in trade in services
Final demand
Propensity to consume ICT differs among countries
Share of households ICT expenditures in OECD countries, 2005
0
1
2
3
4
5
6
7C ommunic ation Information tec hnology(% )
Final demand
Propensity to consume ICT differs among households
Industry linkages:Where do ICT go?
Source: Robert D. Atkinson
0
50000
100000
150000
200000
250000
300000
350000
1995 2000 2006
non ICT ICT
4,4%
2,9%
ICT contribution to growthCompare:• actual growth rate of total output;• the growth rate that would have occurred if
no ICT output was produced.Ex: Finland
ICT contribution to growth1995-2000
Largest in Finland, US, SwedenLarge also in UK and NetherlandsSmall in Germany and Italy
8.8%
7.0%5.8%
6.7% 6.2% 6.0%5.2% 5.2%
0.1%
6.2%
13.0%
8.1%
3.5%
5.6%
4.4% 3.5% 3.4% 2.6% 2.4% 2.1% 2.1% 2.0% 2.0% 2.0% 1.7% 1.7% 1.6% 1.5%0%
2%
4%
6%
8%
10%
12%
14%
Total output growth ICT contribution
4.7% 4.8%4.3%
6.0% 6.2%
4.2%
8.8%
3.7%
5.1%
2.0%
3.7% 4.1%
3.1% 2.9% 2.5% 2.4% 2.2% 2.0% 2.0% 1.9% 1.9% 1.9% 1.7% 1.2%0%1%2%3%4%5%6%7%8%9%
10%
Total output growth ICT contribution
ICT contribution to growth2001-2006
Largest in UK, Finland and SwedenLarge also in US and BelgiumSmall in France and Italy
How we produce
ICT as a process innovation
ICT and Productivity
• Solow’s paradox / large TFP
• Progress in measurement
• OECD: Hedonic prices, Capital services, Software, Output in services, STAN Database, Productivity database
The Economic Impact of ICT: Measurement, Evidence and Implications (2004):1. ICT investments account for a significant part of GDP growth;
2. ICT investments contribute to MFP growth;
3. ICT producing sectors raise overall productivity;
4. ICT services increase productivity in using sectors;
5. ICT + other factors have stronger effects at the firm level
ICT and Productivity• ICT investment matters more than non-ICT…• …but MFP growth remains the main driver• ICT investment has no impact on MFP growth
since 1995(Van Ark, 2007)
What explains large MFP?
3 explanations
1.What we measure is still badly measured:Capital services, hedonic prices, poor industry data
2.We fails to measure “complementary” investments:Organisational changes (Oulton& Srinivasan, 2005)
3.We fails to measure intangibles:Van Ark (2004), McGrattan and Prescott (2005), Corrado, Hulten, and Sichel (2005; 2006); Fukao et al. (2007)
Intangibles The Knowledge Capital of the Firm
Source: Marrano, Haskel and Wallis based on Corrado, Hulten & Sichel
How important are intangibles?
Intangibles explain a large part of MFP
Significant impact also in the UK and Japan
USA
How we produce
ICT as a GPT
ICT as a GPTOrganisational changes, skills, innovation, business
models, intangibles are complementary to ICT
ICT creates opportunities to change organisation, improve skills, speed up innovation and invest in
intangibles
Intangibles are endogenous!
ICT and InnovationICT-related patents:• 35% of OECD PCT filings in 2005;• over 50% in Singapore and Finland• more than doubled in China over 1996-2005
Patterns and Trends (1/5)
0%5%
10%15%20%25%30%35%40%45%50%
1985-89 2000-05
Innovation in non-ICT sectors (patents) depends on innovation inputs from ICT (citations of ICT patents)
The share of ICT citations in total citations in OECD has increased by 7.5 percentage points, from 16.7% in 1985-89 to 24.2% in 2000-05
Patterns and Trends (2/5)The intensity of ICT citations differs among countries:In Finland (47%) almost double OECD (24%).Very high also in Korea (36%), the Netherlands (35%) and Japan (31%).
0%5%
10%15%20%25%30%35%40%45%50%
1985-89 2000-05
Patterns and Trends (3/5)Intensity of ICT citations has increased faster in some countries: over 4.5 times in Finland and Korea,3 times in Sweden.Smaller increase in countries starting with a high ICT intensity Japan, the Netherlands and the US.
0%5%
10%15%20%25%30%35%40%45%50%
1985-89 2000-05
Patterns and Trends (4/5)
The weight of ICT citations is the largest in ICT industries
However, ICT citations account for a large share of total citations also in some non-ICT industries
2000-05
ANALYTICAL CHALLENGES
Towards a Research Agenda
Measuring• Intangibles• Organisation• Firm-networks• e-business
• Hedonic prices• Industry-level data• Services output• R&D
Analysing interactions
Within firms• between ICT and complementary investmentsAmong firms• ICT-enabled networks• Spillovers• e-business• Between firms and the market• competition• e-commerceAmong industries• between ICT-producing and ICT-using industriesAmong technologies• ICT-driven innovation