Information and communications technology

Information and communications technology: Review of the ICT Literature

Information and communications technology: Investment in ICT and Its Diffusion

Information and communications technology: The Effects of ICT on Economic Growth

Information and communications technology: New Economy and the Productivity Paradox

Information and communications technology: The Role of ICT in the World Economy

Information and communications technology (ICT)refers to all technologies and devices used in managingand processing information systems. In contrastto the manufacturing industries such as shipbuilding,steel, automobiles, and textiles, whichcreate value directly, ICT in the form of computers,software, the Internet,multimedia, andmanagementof information services creates value indirectly. ICTincludes data for business use, voice communication,images, multimedia, and many types of technologiesfor the purpose of development and exchangeof information. The definition of the ICTsector differs among industrialized countries. TheU.S. and Organisation for Economic Co-operationand Development (OECD) definitions are presentedin table 1.

The introduction of increased processing powerof hardware alongwith complementary software andtelecommunications infrastructure have enhancedthe ability to store, retrieve, analyze, and communicatedata and information within and between organizationsand their partners and suppliers, andultimately to the consumer. In particular, ICT dealswith the use of electronics, computers, and computersoftware to convert, store, protect, process, transmit,and retrieve information. For that reason, computerprofessionals are often called information technology(IT) specialists or business process consultants, andthe division of a company or university that dealswith software technology is often called the IT department.Other names for the latter are informationservices, management information services, ormanaged service providers.

As a general rule, capital and labor as importantelements in the growth of an economy lead to decreasingreturns to scale. Therefore, even thoughthese factor inputs of production may increase, thegrowth of an economy over a certain level cannot beexpected. Information may produce increasing returnsto scale and become an important factor forsustainable growth, however. Thus, in recent years,ICT has been considered an input in the productionof goods and services and a factor affecting totalfactor productivity growth at both themicro- and themacro levels (see Shiu and Heshmati 2006).

See also digital divide; electronic commerce; globalization

FURTHER READING

• Antonelli, Cristiano. 1990. ‘‘Information Technology and the Derived Demand for Telecommunications Services in theManufacturing Industry.’’ Information Economics and Policy 4: 45 55. An empirical examination of the factors that influence the growth in demand for tele communication services in the Italian manufacturing sector.
• Dewan, Sanjeen, and Kenneth L. Kraemer. 2000. ‘‘In formation Technology and Productivity: Evidence from Country level Data.’’ Management Science 46: 548 62. An empirical analysis of significant differences between developed and developing countries with respect to their structure of returns from capital investments.
• Edquist, Harald, and Magnus Henrekson. 2007. ‘‘Tech nological Breakthroughs and Productivity Growth.’’ Research in Economic History 24: 1 53. An examination of productivity growth following three major techno logical breakthroughs: the steam power revolution, electrification, and the ICT revolution.
• Jorgenson, Dale W. 2001. ‘‘Information Technology and the U.S. Economy.’’ American Economic Review 91 (1): 1 32. An important study of the link between IT and the fundamental change in the U.S. economy leading to a permanent improvement in the U.S. growth pros pects.
• Madden, Gary, and Scott J. Savage. 1998. ‘‘CEE Tele communications Investment and Economic Growth.’’ Information Economics and Policy 10: 173 95. An em pirical examination of the relationship between gross fixed investment, telecommunications infrastructure investments, and economic growth.
• Oliner, Stephen D., and Daniel E. Sichel. 2000. ‘‘The Re surgence of Growth in the Late 1990s: Is Information Technology the Story.’’ Journal of Economic Perspectives 14 (4): 3 22. An empirical examination of the influence of ICT on productivity growth.
• Organisation for Economic Co operation and Develop ment (OECD). 2000. Information Technology Outlook 2000. Paris: OECD. A thorough review of trends and prospects in the ICT industry.
• . 2004. The Economic Impact of ICT: Measurement, Evidence, and Implication. Paris: OECD. A compre hensive overview of the impacts of ICT on economic performance, and the ways through which these impacts can be measured.
• Pohjola, Matti. 2001. ‘‘Information Technology and Eco nomic Growth: A Cross Country Analysis.’’ In Infor mation Technology, Productivity, and Economic Growth: International Evidence and Implications for Economic Development, edited by Matti Pohjola. Oxford: Oxford University Press, 242 56. An exploration of impacts of informationtechnologyinvestmentoneconomic growth in a cross section of countries.
• Shiu, Alice, andAlmasHeshmati. 2006. ‘‘TechnicalChange and Total Factor Productivity for Chinese Province: A Panel Data Analysis.’’ IZA Discussion Paper 2133. Bonn:The Institute for the Study of Labor. Anempirical analysis of the variables that affect total factor produc tivity growth in China.
• United Nations Conference on Trade and Development. 2003. E Commerce and Development Report 2003. New York: UNCTAD. A thorough overview of the implica tions of the growth of digital economy for developing countries.
• U.S. Department of Commerce. 2003. Digital Economy 2003. Washington, DC: U.S. Department of Com merce. A comprehensive review of conditions in U.S. information technology industries and the effects of IT on national economic performance.
• World Bank. 2006. World Development Indicators 2006. Washington, DC: World Bank. World Bank’s premier annual compilation of data about development, in cluding more than 900 indicators in over 80 tables or ganized in 6 sections: World View, People, Environ ment, Economy, States andMarkets, and Global Links.
• Zhu, Ji. 1996. ‘‘Comparing the Effects ofMass Media and Telecommunications on Economic Development: A Pooled Time Series Analysis.’’ Gazette 57: 17 28. An empirical study of the contribution of telecommunica tions to economic development.

ALMAS HESHMATI AND MINKYU LEE