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Information technology’s impacts on productivity and welfare: a review

Author

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  • Clem Tisdell

Abstract

Purpose - The purpose of this paper is to outline and examine existing economic findings about the effects of information and communication technology on economic productivity, welfare and social change. Design/methodology/approach - Initially, existing findings about consequences of ICT for macro-level economic activity and productivity are outlined, and then this is correspondingly done for firms and for industries before a variety of welfare and social consequences of ICT are discussed. The industry-level discussion includes empirical data as well as analytical material. Findings - Most studies indicate that ICT has significantly added to GDP and has been growth enhancing but these effects vary considerably between economies. The elasticity of aggregate production in relation to investment in ICT has risen with the passage of time. Reasons for this are suggested. The contribution of value added to the output of different industries varies substantially. At the micro-economic level, it is shown how ICT can increase technical and allocative efficiency, and how it can increase consumers’ surplus and producers’ surplus by lowering market transaction costs. Socioeconomic inequalities and concerns arising from the supply of e-commodities are discussed. Originality/value - Provides a comprehensive but short overview of economic findings about the impact of ICT and brings attention to socioeconomic issues that have been overlooked or downplayed in that discussion. Includes new micro-economic analysis of the distributional impact of ICT and indicates areas requiring social policy intervention.

Suggested Citation

  • Clem Tisdell, 2017. "Information technology’s impacts on productivity and welfare: a review," International Journal of Social Economics, Emerald Group Publishing, vol. 44(3), pages 400-413, March.
  • Handle: RePEc:eme:ijsepp:ijse-06-2015-0151
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    More about this item

    Keywords

    ICT and economic welfare; ICT and social change; Information technology and productivity; O3; D2; D6;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D2 - Microeconomics - - Production and Organizations
    • D6 - Microeconomics - - Welfare Economics

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