The Faster-Accelerating Digital Economy
AbstractThe digital economy is one of the most important features of the knowledge-based society of the future. Based on information and communications technology (ICT), it grows faster than and eventually overtakes the traditional industrial economy. The fundamental driving forces of the digital economy’s faster economic growth are as follows. First, ICT converges with and improves the efficiency of traditional industries. Second, the production function of the ICT industry shows increasing returns to scale. Third, the development of ICT stimulates not only demand and supply but the entire expansive reproduction system, resulting in faster-accelerating economic growth. This paper investigates the essentials, causes, and patterns of the faster economic growth of the digital economy, and forecasts its future on the basis of real-life examples from the US, Finland, and Ireland. Furthermore, the core of the IT paradox is revisited, so that the potential of the digital economy can be reaffirmed.
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Bibliographic InfoPaper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 201173.
Length: 36 pages
Date of creation: Apr 2011
Date of revision: Apr 2011
Knowledge-based society; digital economy; new economy; economic growth; faster acceleration; technological change; IT paradox.;
Find related papers by JEL classification:
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-09 (All new papers)
- NEP-ICT-2011-04-09 (Information & Communication Technologies)
- NEP-KNM-2011-04-09 (Knowledge Management & Knowledge Economy)
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