CSO databank, Forfás BERD 2003 and 2005 surveys Figure 1 also details the BERD intensity or relative importance of BERD to the national economy between 2003 and 2012.
For Ireland, two measures of economic activity are employed, GNP and GDP. GDP for Ireland is inflated by the inclusion of profits of inter-firm activities of multinational firms
but GNP excludes these profits giving a truer measure of economic activity. BERD as a percentage of GNP has increased from 0. 93 per cent in 2003 to 1. 46 per cent in 2011
CSO databank, Forfás BERD 2003 and 2005 surveys Figure 7 highlights the shift from a manufacturing to service economy between 2003 and 2011 in expenditure on R&d.
January 2013 A Review and Audit of Licenses Across Key Sectors of The irish Economy Forfás December 2012 Global Entrepreneurship Monitor (GEM) 2011 Global Entrepreneurship Monitor
commentary on Europe's economy focuses on its precarious financial system and anemic employment recovery since the Great Recession.
and government) throughout the European economy. Increasing productivity is the key way that countries can raise their per capita-income income.
ICT is a general purpose technology (GPT) that has wide-ranging effects throughout an entire economy,
making productivity improvement the centerpiece of economic policy is crucial. While employment presents a formidable challenge in many European countries,
because ICT-producing sectors alone are unlikely to provide significant productivity increases to the economy without the adoption of ICT in other sectors.
because while ICT investment provides large benefits for the broader economy, the nature of these benefits makes them hard for any single firm to capture;
The irish productivity gap with the U s. economy shrank from 35 percent in 1995 to 17 percent in 2013.2004-2013 Diverging Converging 1995-2004 Converging Finland Ireland Greece
Figure 5 illustrates the magnitude of convergence and divergence within the EU-13 as well as the relative sizes of the EU-13 economies. 2004-2013 Diverging Converging 1995-2004 Converging Bulgaria Czech-republic
is the sine qua non of economic growth. 18 To see why, consider that if the EU-15 nations had maintained the productivity growth rate they enjoyed from 1980 to 1995 through to 2013,
Productivity is the main determinant of national income per person, because over the long term a nation can consume only what it produces
when an economy shifts resources from less productive industries (e g.,, call centers) to more productive ones (e g.,
Indeed, new growth economics accounting suggests that the lion's share of productivity stems from the use of more and better tools. 30 PAGE 10 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION JUNE 2014 And in today's knowledge-based economy,
what economists call a general purpose technology (GPT). GPTS have appeared historically at a rate of once every half century,
what economies produce; how they produce it; how production is organized and managed; the location of productive activity;
they increase in sophistication as they diffuse throughout the economy; they engender extensive spillovers in the forms of externalities and technological complementarities;
since the mid-1990s through to 2014 have found positive and significant effects of ICT on productivity. 37 The beneficial effects of ICT on productivity have been found across different levels and sectors of economies, from firms to industries to entire economies,
First, in economies where ICT capital equipment innovations are new, they are able to pick off the low hanging fruit of relatively easy to improve efficiencies.
what economists call network externalities, which are the spillovers from adding additional users to a network.
50 Figure 7 shows contributions in both the total economy and private sectors for the EU-15 and the United states. An OECD report finds that the ICT contribution to value-added total factor productivity
Corry et al. find that the contribution from the knowledge economy, which includes labor composition, ICT capital,
and economy-wide levels, why has failed Europe to gain from ICT the way the United states has?
Recently, several prominent economists have argued that productivity growth in the United states is slowing down significantly for the foreseeable future.
economics does in fact have a good deal to say about how it develops and how policies can play a role in creating it.
Cowen and Gordon ascribe too much agency to broad historical forces and fundamental laws of economics, and not enough agency to policy.
Second, techno-pessimist accounts frequently conflate economic growth with productivity. The two are related but distinct, because growth can occur simply by adding more workers.
While demographic shifts are important for the absolute size of the economy, they do not affect productivity or income per capita.
the techno-pessimists stand in stark contrast to other economists arguing that technological change will soon be progressing too quickly.
Shares of ICT investment as percent of nonresidential investment93 Economists see U s. ICT investment as a key reason the United states has maintained its place at the technological frontier as one of the most productive countries. 94 The effectiveness
because services are such a large part of the European (and U s.)economy, substantially higher productivity growth in manufacturing would not be sufficient to remedy the productivity slowdown. 100 Mas argues that it is the services
and the EU while in the US TFP improvements in the ICT producers sectors spilled over to the other sectors of the economy (especially the ICT intensive users),
Scale Economies Two additional reasons European firms lag in their investment in ICT capital are related to scale.
ICT investments have high returns to scale because of their low marginal costs but higher fixed costs. 130 To be sure,
While the EU economy is larger than that of the United states, in practice it is integrated much less.
there are larger potential returns to ICT investments for U s. firms, again because of the high fixed costs relative to marginal costs in many ICT capital investments.
and Hitt find that firms that embrace new economy management practices (e g.,, decentralized decision-making) and at the same time invest significantly in ICT,
Rohman finds that the beneficial effects of the ICT sector for the broader European economy declined after the year 2000.149 Other recent evidence has shown that most of the productivity gains from ICT are due to ICT-using sectors.
like market and non-market services, make up a much larger part of developed-country economies than ICT-producing sectors,
so productivity gains in those sectors have a much larger effect on the whole economy. 150 There are many possible reasons why policymakers prioritize ICT industry growth over ICT usage.
For example, European officials look to the green economy for jobs, even though it will likely mean higher energy costs and lower productivity.
even though this view has been discredited thoroughly both by history and economics. 152 Figure 16: ICT use effect and ICT output effect on GDP (2000 to latest year, percentage points per annum) 153
As Europe emerges from the economic crisis, it faces continued challenges but also opportunities. With its financial system stabilized, Europe's central economic challenge over the next quarter century will be to raise productivity growth rates.
though, policymakers will have to make widespread adoption of ICT a policy priority across the entire EU economy.
S. A. ICT use effectict output effectpolicymakers will have to make widespread adoption of ICT a policy priority across the entire EU economy.
or in applying IT to other sectors of the economy, and PAGE 28 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION JUNE 2014 whether promotion of the former through higher tariffs or other restrictions (like on cross-border data flows) will be detrimental to the latter.
any economy seeking success needs to prioritize across-the-board productivity growth strategies, rather than efforts to raise productivity by modestly expanding output in high-productivity sectors like ICT.
Economists have argued long that businesses under-invest in research, which is the rationale for governments instituting research grants
Economists have documented also significant market failures around IT investment, including network externalities and chicken-or-egg issues that slow digital transformation absent smart and supportive public policies. 165 Health care is a leading example.
procurement and regulation. 166 Use Tax and Trade policy to Spur ICT Investment It is only through investment in ICT that ICT innovation is diffused throughout the economy.
Some economists might question such policies, arguing that such tax incentives should only go to investments in areas like R&d where companies seldom capture all the benefits.
to an even greater degree than the United states, overemphasizes the role of small firms in the economy in rhetoric and in policy. 173 For many policymakers,
small firms have come to represent everything good in the economy. Yet, on average large firms are more productive,
simply keep the share of the economy produced by small businesses larger than it otherwise would be. 179 The latter policies not only slow the growth of larger firms,
limiting productivity growth in this sector. 181 Do No Harm Putting spurring ICT adoption at the center of economic policy means not just supporting it,
One of the areas currently most at risk is digital Trade policies that lead to smaller firm size in an economy hurt productivity and income growth.
But the European economic crisis has kept Euro-area investment on the decline while preoccupying policymakers with other issues.
ENDNOTES 1. The Conference Board, Total Economy Database: January 2014 (total GDP EKS, labor productivity per hour worked EKS;
Productivity and Economic growth in Europe: A Comparative Industry Perspective, International Productivity Monitor 21 (2011): 3 23.2.
The Conference Board, Total Economy Database. 3. Ibid. 4. Ibid. 5. Ibid. 6. Mary O'Mahony and Bart van Ark, eds.
The Conference Board, Total Economy Database: January 2014 (Table 5; accessed April 2, 2014), http://www. conference-board. org/data/economydatabase/.
The Conference Board, Total Economy Database: January 2014 (total GDP EKS, labor productivity per hour worked EKS;
Productivity and Economic growth in Europe. Assuming 2. 8 percent productivity growth. 20. The Conference Board, Total Economy Database.
Assuming 1. 6 percent productivity growth. 21. Ibid. Assuming yearly productivity growth for EU-15 after 1995 was the actual rate for the United states,
and Daniel Castro, The Internet Economy 25 Years After. com (Information technology and Innovation Foundation, March 2010), http://www. itif. org/publications/internet-economy-25
Robert D. Atkinson, The Past and Future of America's Economy: Long Waves of Innovation that Power Cycles of Growth (Northampton, Massachusetts:
Implications for the U s. Economy and U s Economic policy (presentation at ITIF Breakfast Forum, July 15, 2008), http://www. itif. org/files/2008-07-15-lipsey
Conclusions from the Empirical Literature, Information Economics and Policy 25, no. 3 september 2013): 109 125, doi:
‘Baumol's Disease'Has been cured, FRBNY Economic policy Review 9, no. 3 (2003): 23 33; see also Carol A. Corrado et al.
Mika Maliranta and Petri Rouvinen, Productivity effects of ICT in Finnish business (discussion paper no. 852, Research Institute of the Finnish Economy, 2003). 44.
Vig, Information technology and the Indian Economy (Phd diss. University of Minnesota, March 2011), http://conservancy. umn. edu/bitstream/104630/1/Vig umn 0130e 11796. pdf. For public sector literature examples, see:
Evidence from Police departments, Journal of Labor Economics 28, no. 1 january 2010): 167 201; Davide Arduini et al.
Productivity and Growth in UK Industries (discussion paper, Centre for Economic policy Research, July 2012), 52, http://ideas. repec. org/p/cpr/ceprdp/9063
Measuring the Productivity Impacts of ICT at the Firm-Level, Empirical Economics 30 (2005): 427 64.58.
Concetta Castiglione, Technical Efficiency and ICT Investment in Italian Manufacturing Firms, Applied Economics 44, no. 14 (2012), http://www. tara. tcd. ie/bitstream/2262
and Jacques Mairesse, Evidence on the Impact of R&d and ICT Investments on Innovation and Productivity in Italian Firms, Economics of Innovation and New Technology 22, no.
Cipriano Quirós Romero and Diego Rodríguez, E-commerce and Efficiency at the Firm Level, International Journal of Production Economics 126, no.
Evidence from France, Economics Letters 116, no. 2 august 2012): 244 246, doi: 10.1016/j. econlet. 2012.02.022.68.
A Study of Technological Diffusion and Economic growth under Network theory, Telecommunications Policy (2014), doi: 10.1016/j. telpol. 2013.12.003.75.
Conclusions from the Empirical Literature, Information Economics and Policy 25, no. 3 september 2013): 109 125, doi:
accessed April 2, 2014) http://www. oecd-ilibrary. org/economics/oecd-factbook-2013 factbook-2013-en; World bank, Databank:
The Conference Board, Total Economy Database: January 2014 (Table 5; accessed April 2, 2014), http://www. conference-board. org/data/economydatabase/.
Renaud Bourlès and Gilbert Cette, Trends in‘structural'Productivity Levels in The major Industrialized Countries, Economics Letters 95, no. 1 (2007): 151 156.95.
Productivity and Economic growth in Europe. 100. Ibid. 24.101. Matilde Mas, ICT and Productivity Growth in Advanced Economies (working paper, University of Valencia and Ivie, 2010). 102.
OECD Statextracts, Productivity Database By Industry 2012. Growth of labour productivity, in per cent, Business Services Sector;
The Role of Information technology and Regulatory Practices, Labour Economics 11, no. 1 february 2004): 33 58, doi:
Evidence for a Number of European countries, Review of World Economics 149, no. 1 (2013): 131 49;
and Economic growth by Expanding the ITA (Information technology and Innovation Foundation, March 2012), http://www. itif. org/publications/boosting-exports-jobs-and-economic-growth-expanding-ita. 123.
Harry Deangelo and Ronald W. Masulis, Optimal Capital Structure Under Corporate and Personal Taxation, Journal of Financial Economics 8, no.
An Historical Perspective, CAGE Online Working Paper Series (Competitive Advantage in the Global economy (CAGE), 2012), http://ideas. repec. org/p/cge/warwcg/70
Measuring and Explaining Management Practices Across Firms and Countries, The Quarterly Journal of Economics 122, no. 4 (2007): 1351 1408.144.
Bradford Delong and Lawrence Summers, Equipment Investment and Economic growth: How Strong is the Nexus? Brookings Papers on Economic activity 23 (1992;
Jonathan Temple and Hans-Joachim Voth, Human capital, equipment investment, and industrialization, European Economic Review 42, no. 7 (1998): 1343 62;
Bart Van Ark Measuring the New Economy, An International Comparative Perspective, Review of Income and Wealth 48 (2002): 1 14;
Xavier Sala-i-Martin, 15 Years of New Growth Economics: What Have learnt We?(keynote address to the fifth annual conference of the Central bank of Chile The Challenges of Economic growth, Santiago, Chile, November 29-30,2001). 168.
Stephen Ezell and Robert D. Atkinson, How ITA Expansion Benefits the Chinese and Global economies (Information technology and Innovation Foundation, April 2014), http://www. itif. org/publications
/how-ita-expansion-benefits-chinese-and-global economies. 169. Thomas Baunsgaard and Michael Keen, Tax revenue and (or?
Trade Liberalization, IMF Working Paper, no. 05/112 (June 2005), http://papers. ssrn. com/sol3/papers. cfm?
Oxford Economics, Capturing the ICT Dividend: Using Technology to Drive Productivity and Growth in the EU (Oxford Economics/AT&T), accessed October 3, 2013, http://www. corp. att. com/bemoreproductive/docs/capturing the ict dividend. pdf. PAGE 41 THE INFORMATION TECHNOLOGY & INNOVATION
FOUNDATION JUNE 2014 171. Contribution to the Annual Growth Survey 2014: A Single Market for Growth and Jobs:
Small Is Not Beautiful, The Economist, March 3, 2012, http://www. economist. com/node/21548945.180. Murat Seker, Rigidities in Employment protection and Exporting, World Development 40, no. 2 (2012): 238 50.181.
Catherine Tucker, Economics of Privacy (MIT Sloan and NBER, November 15, 2012), http://www. ftc. gov/sites/default/files/documents/public events/fifth-annual
He is also author of the books Innovation Economics: The Race for Global Advantage (Yale, 2012) and The Past And Future Of America's Economy:
Long Waves Of Innovation That Power Cycles Of Growth (Edward Elgar, 2005), and the State New Economy Index series.
Dr. Atkinson received his Ph d. in City and Regional Planning from the University of north carolina at chapel hill in 1989.
Ben Miller is an economic growth policy analyst at the Information technology and Innovation Foundation. He has a Master's degree in International Development and Economics from Johns Hopkins School of Advanced International Studies.
ABOUT ITIF The Information technology and Innovation Foundation (ITIF) is a Washington, D c.-based think tank at the cutting edge of designing innovation strategies and technology policies to create economic opportunities
impact of economic crisis not as severe as expected. Differences in innovation performance are becoming smaller again although at a modest rate.
and further develop the knowledge-based economy. Most of the Innovation leaders and followers perform above the EU average,
The EU is improving its educational knowledge base showing that Europe is turning into a more knowledge-based economy.
Sigma-convergence occurs when the spread in innovation performance across a group of economies falls over time.
and is linked positively with economic growth. Eurostat Eurostat 1. 2. 1 International scientific co-publications per million population Number of scientific publications with at least one co-author based abroad (where abroad is non-EU for the EU27) Total
) and the higher education sector (HERD) Gross domestic product R&d expenditure represents one of the major drivers of economic growth in a knowledgebased economy.
and wealth of the EU. Research and development spending is essential for making the transition to a knowledge-based economy as well as for improving production technologies and stimulating growth.
Total employment in fast-growing enterprises in the business economy (without financial sector) The indicator shows the degree of innovativeness of successful entrepreneurial activities.
It captures the capacity of a country to transform its economy rapidly to take advantage of emerging demand.
and provide inputs to the innovative activities of other firms in all sectors of the economy.
Value of total trade The manufacturing trade balance reveals an economy's structural strengths and weaknesses in terms of technological intensity.
and is linked positively with economic growth. Data source: Eurostat 1. 2. 1 International scientific co-publications as%of total scientific publications of the country Numerator:
R&d expenditure represents one of the major drivers of economic growth in a knowledge-based economy. As such, trends in the R&d expenditure indicator provide key indications of the future competitiveness
and wealth of the EU. Research and development spending is essential for making the transition to a knowledge-based economy as well as for improving production technologies and stimulating growth.
or from another shareholder (s). It includes refinancing of bank debt. Denominator: Gross domestic product as defined in the European System of Accounts (ESA 1995), in national currency and current prices.
and provide inputs to the innovative activities of other firms in all sectors of the economy.
Creating, exploiting and commercialising new technologies are vital for the competitiveness of a country in the modern economy.
This is because medium and high technology products are key drivers for economic growth, productivity and welfare, and are generally a source of high value added and well-paid employment.
and is linked positively with economic growth. Almost 80%of EU27 youth has attained at least upper secondary education. But in some countries these shares are still too low, in particular in Iceland
Iceland R&d expenditure represents one of the major drivers of economic growth in a knowledge-based economy.
and wealth of the EU. Research and development spending is essential for making the transition to a knowledge-based economy as well as for improving production technologies and stimulating growth.
Creating, exploiting and commercializing new technologies are vital for the competitiveness of a country in the modern economy.
This is because medium and high technology products are key drivers for economic growth productivity and welfare, and are generally a source of high value added and well-paid employment.
68: 104-112.23 Zuboff S. The emperor's new information economy. In: Orlikowski W, Walsham G, Jones M, et al, editors.
and economic activity distributed and how is it evolving in Europe? What locations are attracting new investments in ICT R&d or manufacturing?
For example, until recently, R&d internationalisation has been limited to a small number of developing countries and economies in transition (UNCTAD 2005.
These sectors are seen as essential to advanced economies. Thus, policy makers fear that the potential loss of local inventive capacity in high-tech industries to other regions could harm their competitiveness
and undermine the state and development of their knowledge-based economies. Taking into account the gap in our understanding of the dynamics of global R&d organisation
From the point of view of geographically dispersed economic activity, like in the case of international trade or international R&d activities, the issue of node clustering is very informative,
the potential size of the economy should be taken also as a predictor of link formation among countries.
'Journal of International Economics, 81:1, 1-14..For more information please refer to: http://www. cepii. fr/anglaisgraph/bdd/distances. htm 7 Data stems from the IMF.
i e. distance, common language, the economy size, have expected the signs, though, in some cases are not significant.
'Economics of Innovation and New Technology, 19:1, 71-86. De Benedictis, L. & Tajoli, L. 2011.'
'forthcoming in The World Economy. De Prato, G. & Nepelski, D. 2012.''Global technological collaboration network.
How Companies Win in the Knowledge Economy. Harvard Business Press. Dunning, J. 1988.''The Eclectic Paradigm of International Production:
'Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. Florida, R. 1997.'
'Market Dynamics and Quantitative Economics Selection of papers presented at the First Bonzenfreies Colloquiumon Market Dynamics and Quantitative Economics, 355:1, 138-44.44 Gibbons, D. E. 2004.'
'Journal of International Economics, 81:1, 1-14. Koschützki, D.,Lehmann, K. A.,Peeters, L.,Richter, S.,Tenfelde-Podehl, D. & Zlotowski, O. 2005.'
'Structure and Dynamics of the Global economy: Network analysis of International Trade 1965-1980.''Social Forces, 70:4, 857-93.
Characterized as a high volume production commodity market, production has moved mainly to Asia, especially Japan, Korea and Taiwan.
the Japanese government, through the Ministry of Economy, Trade and Industry (METI), persuaded Sony, Hitachi and Toshiba to merge their advanced display businesses for small/medium screens to form Japan Display,
Clearly, venture investing fuels a substantial portion of the US economy. However, the USA has been much less successful in those technologies that require longer term investment and support such as robotics and displays.
bonds, or other financial instruments, property, often from traded commodities, especially oil. Most SWFS use foreign exchange assets, 18 usually for investing in large infrastructure ventures or to take equity in major, stable corporations.
created in 1953 from oil revenue commodities. 18 Sovereign Wealth Funds: Generally Accepted Principles and Practices (the Santiago Principles), International Working group of Sovereign Wealth Funds, October 2008, http://www. swfinstitute. org/what-is-a-swf/19 SWFS had poor
via its RUSNANO arm, has invested some $700 million to produce a second production line for plastic transistor film in Russia (see Appendix 1). As more developing countries seek to move from being commodity sources
Second, the legislature did not intervene as software was seen as a peripheral product, not central to an economy,
Today this is no longer the case as it is increasingly recognized that software is at the heart of the modern economy based on high technology and knowledge work.
health and demographic change, food security and the bio-economy with sustainable agriculture, the environment with clean energy and transport.
On the basis of traditional economic theory, it is not always possible to justify subsidizing such companies on the basis of externalities or spillovers.
Yet, the theory of increasing returns, espoused by economists such as Arthur, explains why there may be other valid economic reasons for doing so (Arthur,
Mainstream economics is gradually evolving to incorporate theories from behavioural economics, complexity theory and other strands of economic thought (e g. see Foldvary, 1996;
. eds) Innovation Policy and the Economy, The MIT Press, http://www. nber. org/chapters/c0203 Anderla, G.,et al (1997), Chaotics:
an Agenda for Business and Society in the 21st Century, Praeger, Greenwood, USA Arthur, W. B. 1994), Increasing Returns and Path Dependence in the Economy, University of michigan Press, Ann arbor, MI.
and Shleifer, A. 2004), The regulation of labour, Quarterly Journal of Economics, Vol 119, No 4, http://www. doingbusiness. org//media/FPDKM/Doing%20business/Documents/Methodology/Supporting
Foldvary, F.,Ed. 1996), Beyond Neoclassical Economics: Heterodox Approaches to Economic theory, Edward Elgar. Forge, S. 2004), Open source Software:
Importance for Europe-What Future does OSS hold for Europe today? Study report for IPTS/JRC, European commission, Sevilla, Spain.
the End of Innocence at Apple computer, Penguin, New york. 56 Scitax Advisory Partners (2011), Overview of Research & development Tax Incentives in Selected Global Knowledge Economies, Ver.
cross licenses, patent pools and standard-setting, in Lerner, J.,Stern, S. and Jaffe, A. eds), Innovation Policy and the Economy, MIT Press for the NBER, Cambridge, MA.
Trompenaars, F. 1993), Riding the Waves of Culture, Economist Books, London. Verheul, I.,Bosmaa, N.,van der Nol, F. and Wong, T. 2002), Determinants of entrepreneurship in the United states of america, in Audretsch, D.,Thurik, R.,Verheul,
Exploring the Economics of Search in the Information Society, the Initiative for a Competitive Online Marketplace (ICOMP), March 2011, http://www. i-comp. org/resources/view/1043/file/The%20perils
since the marginal cost of a call on the internet is negligible. In contrast, traditionally a call over the public switched telephony network was determined by the distance of a call.
This made Burda the largest shareholder in XING. The 1. 3 million shares were sold to Burda by Cinco Capital,
Xing website, www. xing. com Economist (2009) A spat among professional networks-Class war-Does local beat global in the professional-networking business?
while the university remained as one of the company's largest shareholders. Other early investors included the rock group, Genesis;
In March 2001, a further $28m was raised from shareholders. These funds were raised partly to finance construction of a new $25m facility dedicated to developing commercial scale production techniques and know-how for LEP technology,
which remained the largest shareholder, with 52%and a handful of others. The financing from both was to be dedicated to building a new production facility,
In 2010, its sales revenue was about $400 million, with gross profit of $145 million. It has a market cap of over $700 million.
and founded by the Bavarian Ministry for the Economy. KUKA and DLR have also been sponsored by the German Ministry of Education
not just nurturing robotics start-ups but introducing robots into the sector of the economy that uses them least today, SMES.
economic growth in the region is already being driven by a robotics industry supplying industrial and surveillance robots usable by small-and medium-sized businesses.
Overtext Web Module V3.0 Alpha
Copyright Semantic-Knowledge, 1994-2011