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The Relationship between ICT Investment and Productivity in the Canadian Economy: A Review of the Evidence

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  • Andrew Sharpe

Abstract

The objective of this report is to shed light on the relationship between information and communications technologies (ICT) and productivity in the Canadian economy. The first part provides a detailed overview of ICT investment and capital by ICT component (computers, communications equipment, and software), and ICT investment and capital stock per worker by ICT component in Canada for the total economy and for 20 NAICS industries, focusing on trends over the 1980-2005 period. The second part contains a general discussion of ICT and productivity issues, with particular emphasis on the relationship between investment in ICT and productivity. The third part provides a review of the literature on the relationship between ICT and productivity, again with a particular emphasis on Canadian studies. The key conclusion of the report is that ICT has been the driving force behind the acceleration of productivity growth in Canada and the United States since 1996. However, the potential of ICT has not been fully exploited and we will continue to see significant ICT contributions to productivity growth in coming years. The role for government is to develop appropriate policy frameworks so that the productivity-enhancing effects of ICT can be fully realized.

Suggested Citation

  • Andrew Sharpe, 2006. "The Relationship between ICT Investment and Productivity in the Canadian Economy: A Review of the Evidence," CSLS Research Reports 2006-05, Centre for the Study of Living Standards.
    • Handle: RePEc:sls:resrep:0605
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    Cited by:

    1. Michelle Alexopoulos & Jon Cohen, 2012. "The Effects of Computer Technologies on the Canadian Economy: Evidence from New Direct Measures," International Productivity Monitor, Centre for the Study of Living Standards, vol. 23, pages 17-32, Spring.
    2. Andrew Sharpe & John Tsang, 2019. "A Detailed Analysis of Newfoundland and Labrador's Productivity Performance, 1997-2018," CSLS Research Reports 2019-06, Centre for the Study of Living Standards.
    3. Andrew Sharpe & Etienne Grand'Maison, 2013. "A Detailed Analysis of Newfoundland and Labrador's Productivity Performance, 1997-2010: The Impact of the Oil Boom," CSLS Research Reports 2013-05, Centre for the Study of Living Standards.
    4. Centre for the Study of Living Standards, 2013. "The Contribution of Broadband to the Economic Development of First Nations in Canada," CSLS Research Reports 2013-04, Centre for the Study of Living Standards.
    5. Andrew Sharpe & Ricardo de Avillez, 2012. "A Detailed Analysis of Nova Soctia;s Productivty Performance, 1997-2010," CSLS Research Reports 2012-05, Centre for the Study of Living Standards.
    6. Benoit Aubert & Blaize Horner Reich, 2009. "Extracting Value From Information Technologies," CIRANO Burgundy Reports 2009rb-04, CIRANO.
    7. Andrew Sharpe, 2014. "What Explains the Canada-U.S. Software Investment Intensity Gap?," CSLS Research Reports 2014-04, Centre for the Study of Living Standards.
    8. Simon Bruhn & Johanna Deperi, 2022. "The Contribution of Digital Firms to Productivity Growth in the Manufacturing Sector: A Decomposition Approach," GREDEG Working Papers 2022-42, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    9. Jasmin Thomas, 2016. "New Evidence on the Canada-U.S. ICT Investment Gap, 1976-2014," CSLS Research Reports 2016-17, Centre for the Study of Living Standards.
    10. Centre for the Study of Living Standards, 2012. "The Impact of Information and Communication Technology on the Productivity of the Canadian Transportation System: A Macroeconomic Approach for the Air and Rail Sectors," CSLS Research Reports 2012-07, Centre for the Study of Living Standards.
    11. Vikram Rai & Andrew Sharpe, 2013. "Can the Canada-U.S. ICT Investment Gap be a Measurement Issue?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 26, pages 63-85, Fall.
    12. Jasmin Thomas, 2016. "Explaining Industry Differences in IT Investment Per Worker Between Canada and the United States, 2002-2013," CSLS Research Reports 2016-01, Centre for the Study of Living Standards.
    13. Ricardo de Avillez, 2011. "A Detailed Analysis of the Productivity Performance of the Canadian Primary Agriculture Sector," CSLS Research Reports 2011-06, Centre for the Study of Living Standards.

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