ICT and Productivity Growth Within Value Chains

Growth accounting has documented an important contribution of information and communication technology (ICT) capital deepening to sectoral labor productivity growth during the late 1990s, especially for the knowledge‐intensive services that are used to an important extent as intermediate inputs to o...

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Bibliographic Details
Published in:The Review of income and wealth 2022-09, Vol.68 (3), p.711-737
Main Authors: Liu, Chuan, Saam, Marianne
Format: Article
Language:English
Subjects:
Communications technology
economic growth
Economic theory
growth accounting
ICT
Information technology
Labor productivity
Manufactured products
Productivity
Services
Value
Value chain
value chains
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Summary:Growth accounting has documented an important contribution of information and communication technology (ICT) capital deepening to sectoral labor productivity growth during the late 1990s, especially for the knowledge‐intensive services that are used to an important extent as intermediate inputs to other sectors. Our approach traces labor productivity growth not within sectors but within value chains of final products. A main result is that more than half of the productivity gains related to ICT capital deepening for manufactured goods are contributed by upstream industries, mostly by knowledge‐intensive services. For a number of countries, similar magnitudes of upstream contributions of ICT capital deepening are observed for ICT products and for services that are not knowledge‐intensive. The major part of these contributions is domestic rather than foreign. Moreover, the high sectoral growth in total factor productivity (TFP) in the ICT sector contributes only moderately to effective TFP growth in non‐ICT value chains.
ISSN:1475-4991
0034-6586
1475-4991
DOI:10.1111/roiw.12533