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special issue: The economic contribution of information technology: Towards comparative and user studies


  • Shane Greenstein

    (Kellogg Graduate School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208-2013, USA)

  • Timothy F. Bresnahan

    (Economics Department, Stanford University, Stanford, CA 99305, USA)


By what process does technical change in information technology (IT) increase economic welfare? How does this process result in increases in welfare at different rates in different countries and regions? This paper considers existing literature on measuring the economic benefits from information technology, emphasizing comparative issues and user studies. Following Bresnahan and Trajtenberg (1995), we call the invention associated with customizing the technological frontier to the unique needs of users in particular regions "co-invention", placing emphasis on understanding how its determinants vary across users in different regions. We develop a framework for understanding the processes behind value-creation, demand-side heterogeneity and co-inventive activity. Then we discuss why these processes make measuring the welfare benefits from advances in information technology particularly difficult. We highlight the metrics currently available for measuring the economic pay-out of the IT revolution and identify which of these vary meaningfully in a comparative regional context. Finally, we finish with observations about further areas of research.

Suggested Citation

  • Shane Greenstein & Timothy F. Bresnahan, 2001. "special issue: The economic contribution of information technology: Towards comparative and user studies," Journal of Evolutionary Economics, Springer, vol. 11(1), pages 95-118.
  • Handle: RePEc:spr:joevec:v:11:y:2001:i:1:p:95-118

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    References listed on IDEAS

    1. Herbert A. Simon, 2002. "Near decomposability and the speed of evolution," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 587-599, June.
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    Cited by:

    1. Malerba, Franco, 2007. "Innovation and the dynamics and evolution of industries: Progress and challenges," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 675-699, August.
    2. Valeria De Bonis, 2016. "Innovation, competition and public procurement in the pre-commercial phase," Public Finance Research Papers 23, Istituto di Economia e Finanza, DIGEF, Sapienza University of Rome.
    3. Castaldi, Carolina & Sapio, Sandro, 2006. "The Properties of Sectoral Growth: Evidence from Four Large European Economies," GGDC Research Memorandum GD-88, Groningen Growth and Development Centre, University of Groningen.
    4. Kranz, Johann & Picot, Arnold & Roemer, Benedikt, 2011. "Unlocking the potential of the smart metering technology: How can regulation level the playing-field for new services in smart grids?," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52183, International Telecommunications Society (ITS).
    5. Sandro Sapio & Andrea Roventini & Mauro Napoletano, 2006. "Modelling smooth and uneven cross-sectoral growth patterns: an identification problem," Economics Bulletin, AccessEcon, vol. 15(7), pages 1-8.
    6. Andrea Szalavetz, 2007. "Changing National Innovation Systems in Advanced Economies – Lessons for Catching-Up Follower Countries," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 66-76.
    7. repec:dgr:rugggd:gd-88 is not listed on IDEAS
    8. repec:ebl:ecbull:v:15:y:2006:i:7:p:1-8 is not listed on IDEAS
    9. repec:eee:iepoli:v:40:y:2017:i:c:p:13-20 is not listed on IDEAS
    10. Francesco Crespi & Dario Guarascio, 2017. "The demand-pull effect of public procurement on innovation and industrial renewal," LEM Papers Series 2017/20, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    11. Franco Malerba, 2006. "Innovation, Industrial Dynamics and Industry Evolution: Progress and the Research Agendas," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 21-46.
    12. Ann P. Bartel & Casey Ichniowski & Kathryn L. Shaw, 2005. "How Does Information Technology Really Affect Productivity? Plant-Level Comparisons of Product Innovation, Process Improvement and Worker Skills," NBER Working Papers 11773, National Bureau of Economic Research, Inc.
    13. Dario Mock & Grischa Perino, 2008. "Wasting innovation: barriers to entry and European regulation on waste electronic equipment," European Journal of Law and Economics, Springer, vol. 26(1), pages 1-10, August.
    14. Malerba, Franco & Orsenigo, Luigi, 2010. "User-producer relations, innovation and the evolution of market structures under alternative contractual regimes," Structural Change and Economic Dynamics, Elsevier, vol. 21(1), pages 26-40, March.
    15. Morgan, Horatio M. & Ngwenyama, Ojelanki, 2015. "Real options, learning cost and timing software upgrades: Towards an integrative model for enterprise software upgrade decision analysis," International Journal of Production Economics, Elsevier, vol. 168(C), pages 211-223.
    16. Chris Forman & Avi Goldfarb & Shane Greenstein, 2002. "Digital Dispersion: An Industrial and Geographic Census of Commerical Internet Use," NBER Working Papers 9287, National Bureau of Economic Research, Inc.
    17. Cecere, Grazia & Corrocher, Nicoletta & Gossart, Cédric & Ozman, Muge, 2014. "Technological pervasiveness and variety of innovators in Green ICT: A patent-based analysis," Research Policy, Elsevier, vol. 43(10), pages 1827-1839.
    18. Bronwyn H. Hall & Lee E. Manfred, 2007. "Innovation in non-bank payment systems," Proceedings – Payments System Research Conferences, Federal Reserve Bank of Kansas City.
    19. Sandro Sapio & Grid Thoma, 2006. "The Growth of Industrial Sectors: Theoretical Insights and Empirical Evidence from U.S. Manufacturing," LEM Papers Series 2006/09, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    More about this item


    Measurement of technical change - Information technology - General purpose technology;

    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General


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