Diffusion of ICTs and Growth of the French Economy over the Long-term, 1980-2000

Major European countries, unlike the United States, did not experience an acceleration in labour productivity growth in the second half of the 1990s. In this article, Gilbert Cette from the Bank of France and the University of Aix-Marseilles II, Jacques Mairesse of INSEE-CREST, and Yusef Kocoglu of the University of Aix-Marseilles provide a detailed growth accounting of the impact of diffusion of information and communication technologies (ICTs) on economic growth in France over the 1980-2000 period. They find that total factor productivity growth picked up considerably in the second half of the 1990s relative to the first half, but that labour productivity growth actually decelerated. This latter development was related to the more than 2 percentage point turnaround in employment growth, in part caused by policies aimed at enhancing the employment component of growth, such as the 35 hour week. They estimate that the contribution of ICTs to output and productivity growth has been sizeable in France, but much less than in the United States, in part because of the smaller size of the French ICT sector. But they argue that having a large ICT-producing sector is not a necessary condition to obtain the full benefits from ICT use and conclude that the ICT contribution to growth in France and other European countries could increase significantly in coming years.(This abstract was borrowed from another version of this item.)