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The Economic Impact of Cloud Computing on Business Creation, Employment and Output in Europe. An application of the Endogenous Market Structures Approach to a GPT innovation

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  • Federico Etro

Abstract

Cloud computing is a new general purpose Internet-based technology through which information is stored in servers and provided as a service and on-demand to clients. Adopting the endogenous market structures approach to macroeconomics, we analyze the economic impact of the gradual introduction of cloud computing and we emphasize its role in fostering business creation and competition thanks to the reduction of the fixed costs of entry in ICT capital. Our calculations based on a DSGE model show a significative impact for the European Union with the creation of a few hundred thousands new SMEs and a significant contribution to growth. Governments could enhance these benefits by subsidizing the adoption of cloud computing solutions.

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File URL: https://www.econ.kuleuven.be/tem/jaargangen/2001-2010/2009/2009-2/RBE%202009-2%20-%20The%20Economic%20Impact%20of%20Cloud%20Computing.pdf
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Bibliographic Info

Article provided by Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen in its journal Review of Business and Economics.

Volume (Year): LIV (2009)
Issue (Month): 2 ()
Pages: 179-208

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Handle: RePEc:ete:revbec:20090204

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Web page: http://www.econ.kuleuven.be
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Related research

Keywords: Endogenous market structure; Cloud computing; Utility computing; General purpose technology; Firms’ Entry; Business Cycle;

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Cited by:
  1. Colciago, Andrea & Etro, Federico, 2007. "Real Business Cycles with Cournot Competition and Endogenous Entry," MPRA Paper 7326, University Library of Munich, Germany, revised 25 Feb 2008.
  2. Jacques W. Brook & Vincent Feltkamp & Martin van der Meer, 2012. "Cloud Enabled Business Model Innovation: Gaining Strategic Competitive Advantage as the Market Emerges," Working Papers 2012/49, Maastricht School of Management.
  3. Vahagn Jerbashian & Anna Kochanova, 2012. "The Impact of Telecommunication Technologies on Competition in Services and Goods Markets: Empirical Evidence," CERGE-EI Working Papers wp463, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  4. Jerbashian, Vahagn & Kochanovay, Anna, 2012. "The impact of telecommunication technologies on competition in services and goods markets: Empirical evidence," 23rd European Regional ITS Conference, Vienna 2012 60377, International Telecommunications Society (ITS).

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