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The Internet of Things and economic growth in a panel of countries

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  • Harald Edquist
  • Peter Goodridge
  • Jonathan Haskel

Abstract

Is the world on the cusp of a fourth industrial revolution driven by technological developments in ICT including artificial intelligence and the Internet of Things (IoT)? This paper focuses on IoT and how it might affect economic growth. We attempt to gauge the potential impact of IoT using: (1) regressions based on current IoT data; and (2) longer run estimates of growth accounting parameters based on those observed in a previous wave of the ICT-revolution. We find that: (a) according to definitions in the literature, IoT is an innovational complementarity to ICT; (b) early data already suggest an economically and statistically significant correlation between IoT connections and TFP growth, implying that an increase of 10 percentage points in the growth of IoT connections per inhabitant is associated with a 0.23 percentage points increase in TFP growth; (c) longer run predictions of the IoT contribution based on a growth-accounting framework suggest a potential global annual average contribution to growth of 0.99% per annum (pa) in 2018–2030, approximately $849 billion pa of world GDP in 2018 prices.

Suggested Citation

  • Harald Edquist & Peter Goodridge & Jonathan Haskel, 2021. "The Internet of Things and economic growth in a panel of countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(3), pages 262-283, April.
    • Handle: RePEc:taf:ecinnt:v:30:y:2021:i:3:p:262-283
    DOI: 10.1080/10438599.2019.1695941
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    Cited by:

    1. Hooks, D. & Davis, Z. & Agrawal, V. & Li, Z., 2022. "Exploring factors influencing technology adoption rate at the macro level: A predictive model," Technology in Society, Elsevier, vol. 68(C).
    2. Xin Du & Hengming Zhang & Yawen Han, 2022. "How Does New Infrastructure Investment Affect Economic Growth Quality? Empirical Evidence from China," Sustainability, MDPI, vol. 14(6), pages 1-30, March.
    3. Heikkilä, Jussi & Rissanen, Julius & Ali-Vehmas, Timo, 2023. "Coopetition, standardization and general purpose technologies: A framework and an application," Telecommunications Policy, Elsevier, vol. 47(4).
    4. Zhu, Minglei & Huang, Haiyan & Ma, Weiwen, 2023. "Transformation of natural resource use: Moving towards sustainability through ICT-based improvements in green total factor energy efficiency," Resources Policy, Elsevier, vol. 80(C).
    5. Gai, Zhiqiang & Guo, Yunxia & Hao, Yu, 2022. "Can internet development help break the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 75(C).
    6. Capello, Roberta & Lenzi, Camilla & Perucca, Giovanni, 2022. "The modern Solow paradox. In search for explanations," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 166-180.
    7. Goldfarb, Avi & Taska, Bledi & Teodoridis, Florenta, 2023. "Could machine learning be a general purpose technology? A comparison of emerging technologies using data from online job postings," Research Policy, Elsevier, vol. 52(1).
    8. Marta Gotz & Barbara Jankowska, 2020. "Systemic Change: Adoption of Industry 4.0 Technologies and Company Competitiveness: Case Studies from a Post-Transition Economy," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 14(4), pages 61-78.
    9. Lee, Chien-Chiang & He, Zhi-Wen & Yuan, Zihao, 2023. "A pathway to sustainable development: Digitization and green productivity," Energy Economics, Elsevier, vol. 124(C).
    10. Edquist, Harald & Bergmark, Pernilla, 2022. "How is mobile broadband intensity affecting CO2 emissions? – A macro analysis," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265622, International Telecommunications Society (ITS).

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