IDEAS home Printed from https://ideas.repec.org/p/sls/resrep/1804.html

Weak ICT Investment in Canada and the United States: The Role of Cloud Computing

Author

Listed:
  • Myeongwan Kim

Abstract

After robust growth in ICT investment in Canada and the United States during the 1980s and 1990s, growth in ICT investment started to slow after 2000 and its share in GDP entered a downward trajectory. In an increasingly digitalized economy, weak ICT investment seems puzzling. To explain this trend, this report focuses on two facets of the changing ICT spending pattern driven by the rise in cloud computing starting in the mid-2000s. Instead of investing in ICT capital goods, organizations now purchase cloud services from cloud service providers that appear to be more efficient in producing computing services. Second, cloud service providers undertake substantial own-account investment in ICT equipment which is not counted in official statistics. Based on input-output tables, we find that the impact of cloud computing on the ICT spending pattern is potentially substantial: during the 2006-2014 period, the purchase of cloud services rose at an annual rate of 25.3 per cent to reach $2,554 million CAD in Canada and at an annual rate of 20.4 per cent to reach $32.1 billion USD in the United States. During this period, adding ownaccount ICT equipment investment by the IT service sector results in additional 1.71 percentage-points in annual growth for nominal ICT investment in Canada and additional 1.12 percentage-points in the United States.

Suggested Citation

  • Myeongwan Kim, 2018. "Weak ICT Investment in Canada and the United States: The Role of Cloud Computing," CSLS Research Reports 2018-04, Centre for the Study of Living Standards.
    • Handle: RePEc:sls:resrep:1804
    as

    Download full text from publisher

    File URL: https://csls.ca/research/weak-ict-investment-in-canada-and-the-united-states-the-role-of-cloud-computing/
    Download Restriction: no
    File URL: https://csls.ca/wp-content/uploads/2026/07/csls2018-04-1.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sls:resrep:1804. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CSLS (email available below). General contact details of provider: https://edirc.repec.org/data/cslssca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.