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
AbstractCloud 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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Bibliographic InfoArticle provided by Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen in its journal Review of Business and Economics.
Volume (Year): LIV (2009)
Issue (Month): 2 ()
Endogenous market structure; Cloud computing; Utility computing; General purpose technology; Firms’ Entry; Business Cycle;
Other versions of this item:
- F. Etro, 2009. "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," Review of Business and Economic Literature, Intersentia, vol. 54(2), pages 179-209, June.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
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