Regarding the relationships between ICT capital investment and productivity growth (see Section 4. 1), the results indicate that an instantaneous impact of ICT capital investment on total factor productivity growth does not take place in this sector.
This is not in line with the typically reported results in the standard growth accounting literature, where total factor productivity (TFP) tends to instantaneously rise with increased investment in ICT capital.
Regressions based on the micro-data from the E-business Survey 2007 aimed to explore links between ICT usage,
ICT adoption and complementary investments in skills enhance innovation, which is associated positively with turnover growth.
The goal of eeurope 2005 was"to promote take-up of e-business with the aim of increasing the competitiveness of European enterprises and raising productivity and growth through investment in information and communication technologies
The data sources that have been used to create the EU-KLEMS data series are large based on series from the national statistical institutes (e g. investment series),
capital-intensive investment is only profitable in the TLS sector only if the workforce has the skills
Employers are now less likely to see training just as a cost but also as an investment.
These new forms of partnerships and flexible approaches need to be much more actively promoted. 67 In a knowledge economy driven by rapid technical change, investments in high-skilled labour
training and skill-formation become more important than investments in ICT. The intelligence and skills of ICT users determines the positive
or negative impact that ICT investments may have on the success of the TLS business (see Section 4. 1). In terms of policy implications it has to be said therefore,
Sectoral e-Businesswatch (Survey 2007) 3. 2. 2 Outsourcing of ICT services and ICT investments Outsourcing Outsourcing is considered a useful way to provide immediate ICT and e-business
skills and processes that a company needs with very little investment of time, money and training.
ICT expenditure and investments There is consensus that EU faster growth during the last decade has been related to higher investments in ICT.
it has to be pointed out that ICT investments does not lead to productivity growth at firm-level by itself (it depends on how the technology is used actually in business processes to innovate work processes and business routines with support of ICT).
Complementary investments in human capital, organisational changes and working practices, combined with ICT investments will have an impact on firm performance.
E-business in the transport & logistics industry 49 investment behaviour in the TLS sector appears, in general, more intensive than in other sectors studied:
and investments Companies expecting that their ICT budget will in the forthcoming financial period Transport
which made investments in ICT hardware or networks during the past 12 months Weighting:%%of empl.%
and will often be the principal component of the total cost of ownership. 84 There are clearly a number of Open source products that can offer a fast return on investment,
and consequently maximize investment returns. As an example, while the European commission, ETSI, industry associations and commercial entities such as EPCGLOBAL and GS1, together with local governments, large enterprises and technology vendors, continue to drive progresses towards the attainment of a global standard,
as this application promises enterprises a fast return on investment, also for SMES. Currently, 25%of firms accounting for about 33%of employment in the TLS industry say they send e-invoices,
when relationship investment are indispensable or specific assets are procured, firms will create networks in which suppliers and buyers form closed business relationships.
This provides support to the hypothesis that close relationships facilitate investments in specific technologies. Collaborative practices and ICT applications
as well as investments in ICT and in ICT-enabled innovation. Finally, a firm's performance is assumed to be the outcome of its conduct.
this section will specifically analyse to what extent ICT-capital investments have effects on productivity growth (as compared to other factors) in the transportation and logistics sector.
96 ICT-capital investment and total factor productivity growth For the study of ICT impacts on firm-level productivity,
ICT investment does not lead to productivity growth at firm-level by itself. It depends on how the technology is used actually in business processes,
Thus, only if ICT investment is combined with complementary investment in working practices, human capital, and firm restructuring will it have an impact on performance (cf.
These complementary investments and organisational changes are highly sector-and firm-specific; therefore, returns to ICT investments vary strongly across organisations (Pilat, 2005.
Second, it has to be considered that outsourcing is an organisational innovation which can change firm-level productivity (Erber,
Notwithstanding these considerations, the first step of the analysis is to assess the contribution of ICT-capital investment to productivity growth.
ICT-capital investment has become a key component in value added and productivity growth in the transportation and logistics sector,
Therefore, it can be expected that total factor productivity growth jointly accelerates with higher investment in ICTCAPITAL.
TFP growth in the transport and logistics sector has accelerated together with increased investment in ICT-capital.
therefore focus on the interdependence of ICT investments with skill requirements in the transport and logistics sector.
sector (from 1985-2004) and analyses the impact of ICTCAPITAL investment on labour productivity growth (in terms of gross production value per total hours worked), based on an econometrically estimated stochastic production
In contrast, physical ICT-capital investment does not have a significant impact on labour productivity.
and labour productivity growth This section analysed by means of econometric tools to what extent ICT adoption (measured as ICT capital investments) contributes to growth of value added and productivity.
but that it rather requires complementary investments and organisational innovation. Growth accounting for the transport sector in 10 EU Member States suggests that changes in the ICT-capital stock have accounted only for minor shares of overall value added growth in this sector.
"which cannot be measured by means of the data on ICT-investment available in the database. 116 t-values above 2 assure by a rule of thumb this 5%-signficance threshold of the test. 117 For medium-skilled labour the estimated
They suggest that investments in training and skill-formation are at least equally important as investments in ICT capital themselves
in order to realise the optimal benefits. In other words, in a knowledge economy driven by rapid technical change,
costly investments bear the risk of becoming ineffective. Thus, revisiting the two initially specified working hypotheses (see 4. 1. 1
Hypotheses Results P. 1 ICT-capital investment has become a key component in value added and productivity growth in the transportation and logistics sector,
has accelerated together with increased investment in ICT-capital. No significant average annual rate of technical progress for the common production possibility frontier was found. no P. 3 ICT
the direct positive link between ICT-capital investments and labour productivity growth is probably much weaker.
the growth accounting analysis in section 4. 1. 2 has supported not a possible relationship between investments in ICT-capital and TFP growth.
Probably, this might be due to the time structure between investments in ICT-capital and its impact on TFP.
The standard approach in growth accounting typically assumes that TFP-growth instantaneously increases with increased investments in ICT-capital.
however, be a time lag between the initial investment and implementation of new technology (and the respective organisational changes) and their actual impact on TFP E-business in the transport & logistics industry 105 growth. 119 This could partly explain why we could not find any strong relationship between the two in this analysis
on the basis of this empirical evidence the hypothesis that there is an instantaneous impact of ICT-capital investments on total factor productivity growth has to be rejected.
ICT investments in general and e-business applications in particular, enable and drive process innovation. They are drivers,
The most obvious example of investments in complementary assets include investments in software, training and organisational transformations that accompany ICT investments.
In other words, firms that combine high levels of ICT and high levels of worker skills have better firm innovation performance.
because not all studies have demonstrated clear payoffs from ICT investments (Chan, 2000, Kohli and Devaraj, 2003).
For example, one empirical study finds positive impacts of ICT investments on productivity, but not on profits (Brynjolfsson and Hitt, 1996).
if one drops the assumption that there is a direct link between ICT investments and corporate performance.
and the inclusion of intermediate inputs, revealed that the direct linkage between ICT investment and labour productivity may actually be much weaker than the evidence from more aggregate studies suggests.
TFP growth instantaneously rises with increased investment in ICT capital. This is in contrast to case studies,
The results from our empirical analysis indicate that an instantaneous impact of ICT capital investment on total factor productivity growth does not take place,
Close relationships facilitate investments in specific technologies. Third, the success of the ICT-driven innovative process depends on the availability and quality of complementary assets such as employee skills and IT know-how.
AISA says that the system is highly profitable (investment vs. results. The total estimated cost of the system was about €100, 000.
Fret SNCF therefore considered an investment in e-services to be of strategic importance. While the company started some isolated e-services initiatives in 2005
and an investment in market analyses and customer surveys of the solution is very important.
Ongoing extension of the network, independence from the railways as well as investment in its own assets such as rolling stock.
Through careful investment and controlled growth, the company now has an annual turnover in excess of 6 Million euros.
N c. Cammack & Son believes that one of the reasons for its success is its investment in a specific Information technology (IT) solution called‘Truck Business'.
and improve the majority of their operational processes without making significant financial investments. Although N c. Cammack & Son initially did face resistance from their employees,
Therefore, investments in training and skill-formation are at least equally important as investments in ICT capital itself
costly investments bear the risk of becoming ineffective. IT practitioners. Interviewed SMES often lack a coherent ICT investment strategy
or the related skills-partly because most SMES cannot afford to employ ICT practitioners. According to the present report, only about 9%of small firms and 33%of medium-sized firms employ ICT practitioners i e. have their own ICT department.
investments in training and skill-formation are at least equally important as investments in ICT capital themselves
In this context, the European commission, the European Investment Bank and the European Investment Fund launched, in May 2006 the Joint European Resources for 124 Other possible tools could include microcredits, strengthening equity capital, mezzanine financing, securisation of loans, etc.
investments in training and skill-formation are at least equally important as investments in ICT capital themselves
Thus investments in e-skill formation and training have to be prioritised. This is also in line with the recommendations made in the recent"Small Business Act"for Europe,
and complementary investments can lead to innovations, and innovations are associated positively with turnover growth. Innovative firms are more likely to grow.
The Intangible Costs and Benefits of Computer Investments: Evidence from the Financial Markets. Atlanta, Georgia:
IT investment and firm performance in US retail sector. Economic Studies, No 02-14, Washington D c.:
The relationship between investment in information technology and firm performance: A study of the valve manufacturing sector.
greater interoperability, boosting internet trust and security, much faster internet access and better investment in research and development.
as a result of the EU budget investment in ICT research and innovation. Thanks to ICT solutions it is possible to provide everyone, regardless of their location, with better and personalised healthcare,
ranging from personal health management to research investments into personalised medicine, all designed to put patients at the centre of healthcare.
The proposal foresees to support investment in the provision of cross-border digital services in key areas including eprocurement,
and trust services for electronic transaction in the internal market to boost the user convenience, trust and confidence in the digital world. 2 The investment in research and development of secure, trustworthy and privacy-protecting ICT.
to review their own consumption history allowing them to take appropriate action to reduce it. esesh will also provide social housing providers, regional and national governments with the data they need to optimise their energy-related policy and investment decisions
Indeed, senior clinicians have stated that investing to improve our ICT capability is now more important than additional investment in clinical facilities.
savings, improved patient safety and improved access to care are made possible through ICT investment in areas
we need to substantially increase our investment in, and our effective use of ICT. The HSE needs to focus on a structured,
Innovative approaches to project financing may also be possible in some areas to reduce the upfront investment cost to the HSE.
Investing for a potential 400%return As an indication of the scale of the investment,
The additional investment will enable the implementation of a wide range of patient care and administrative applications delivered via a robust and secure infrastructure.
Industry experience indicates that the breakeven time for the individual investments in such a programme will vary from less than 1 year to 5 years.
In the longer term, a European commission study2 indicates a typical lifetime Return on Investment of 400%for advanced Healthcare ICT systems.
To ensure that we maximise the return from the high levels of investment involved, clear focus will be required on the definition and quantification of objectives, programme management and benefits realisation.
investment in Healthcare ICT is more important than additional clinical facilities. ICT's Role in Healthcare Transformation Report of the Health ICT Industry Group Page 8 2. 2 The role of ICT in the HSE Transformation Clearly the underinvestment in ICT has caused not all the
However, as with complex service enterprises such as airlines, insurance and banking, the transformation needed cannot take place without significant investment in ICT and the co-requisite business process re-engineering.
These challenges include funding the investment effective process re-engineering, systems implementation, and the HSE's capacity to absorb
and health authorities have achieved large benefits from the investment and utilisation of ICT. They have driven improvement in patient care and satisfaction;
improved utilisation of resources (staff and equipment) and leveraged additional benefit from existing ICT investments.
with government encouragement, the HSE increases its investment in Healthcare ICT, and systems progressively go into operation,
Co-requisite with the investment in new ICT systems will be the task of process transformation within the HSE.
By driving the more effective delivery of high calibre services from the overall investment in our health service,
Attract large Healthcare ICT investments to Ireland: Position Ireland with clear demonstrable capability in a strong and vibrant healthcare ICT cluster,
helping attract further inward investment and support the development of the smart economy. Achieve a leadership position in Healthcare ICT:
States and the European commission on boosting ehealth investment, Alexander Dobrev, empirica, Germany, Tom jones, Tanjent, UK, Veli N. Stroetmann, Karl A. Stroetmann, Jörg Artmann, Anne Kersting
which has weighed down on investment, confidence and growth (Manasse, 2013). Against this backdrop, however, Italian exports have held up relatively well (in value terms).
Further, it ascertains the growth rates of innovative SMES vis-à-vis non-innovative SMES in terms of sales turnover, employment, and investment.
along with investment growth and employment growth on gross value-added growth by means of multiple regression analysis. The paper brings out substantial evidence to argue that innovations
does that directly contribute to the growth of firm size in the form of growth of sales turnover, investment, and employment?
investment and employment resulting in the growth of firm size. It is with the above theoretical framework that we have set the objectives of the study. 3 Objectives, scope,
To ascertain the growth rates of sales turnover, investment, and employment of innovative SMES vis-à-vis non-innovative SMES 6 To probe the relationship between innovation
and data on economic variables such as employment, investment, sales turnover, etc. The validity and reliability of the questionnaire was ensured and based on the knowledge and experience of the authors,
In this context, a comparative growth analysis in terms of sales, investment and employment for innovative and non-innovative SMES is appropriate. 5 Innovative and non-innovative SMES:
growth of sales, investment, and employment The growth performance of SMES has been analysed in terms of sales turnover, investment, and employment.
The growth performance has been analysed for all the SMES of each sector for innovative and non-innovative SMES separately and within the innovative group of SMES, for innovative SMES
We have gathered data on sales at current prices as well as on employment and the current value of investment (in plant and machinery) from the SMES of auto
But the values of investment in different years represent their current values for the respective years
Table 7 presents the figures for the growth of sales, investment, and employment for innovative and non-innovative SMES.
It is clear that innovative SMES have registered a higher rate of growth compared to non-innovative SMES in terms of sales, investment,
In the auto component sector, both innovative and non-innovative SMES registered a higher growth of investment followed by sales and then employment.
In the electronics and machine tool sectors, sales growth was higher than that of investment and investment growth was higher than that of employment for both innovative and noninnovative SMES.
In the electronics sector, non-innovative SMES registered negative growth in terms of investment and employment. Overall, the growth analyses for the three sectors clearly indicate that innovative SMES are better off relative to noninnovative SMES.
If innovative SMES are compared better off to non-innovative SMES how do engaged innovative SMES in new products/processes compare with innovative SMES engaged in improvement of existing products/processes?
and grow in size of investment and labour would depend more on how far they have been able to satisfy their customers'needs and requirements rather than on the nature of innovations in terms of new products/processes or improved products/processes.
which had investment in plant and machinery up to Rs. 1 million and 1 for the rest (since the investment limit for an enterprise to be considered small was Rs. 1 million,
as per the law of the Government of India, then). Since we have clubbed all the three sectors together for the analysis,
Innovative SMES registered higher growth relative to non-innovative SMES in terms of not only sales turnover but also employment and investment in all the three sectors.
along with investment growth and employment growth, had a positive influence on GVA growth, in all the three sectors.
)* Noninnovative SMES (3)* Innovative SMES (51)* Noninnovative SMES (17)* Sales 18.86 7. 89 20.16 10.64 26.93 17.01 Investment 25.66 12.91
)**IP&P (25)**Sales 15.91 32.24 14.48 23.09 22.44 17.71 Investment 28.60 19.98 16.07 9. 49 20.17 24.39 Employment 13.95 16.79
, Employment and Investment Drivers Dimensions Achievements Outcomes
OECD Health Policy Studies Improving Health Sector Efficiency The Role of Infor mation and Communication Tech nologies OECD Health Policy Studies Improving Health
35 Box 1. 3. Benefits of investments in picture archiving and communication systems...36 Box 1. 4. Report on the costs and benefits of health information technologies in the United states (US Congressional Budget Office...
109 Box 5. 1. Implementation efforts provide a picture of significant public investment...113 8 TABLE OF CONTENTS IMPROVING HEALTH SECTOR EFFICIENCY:
Office System Programme QMAS Quality Management and Analysis System QOF Quality Outcomes Framework programme ROI Return on investment USD US dollars VCUR
More than a decade of efforts provide a picture of significant public investments, notable successes and some highly publicised costly delays and failures.
or support them in making investments in ICT systems, limited resources can deter from pursuing these systems.
In particular since the costs and benefits associated with adopting new technologies are shared not equitably among stakeholders, investments
THE ROLE OF INFORMATION AND COMMUNICATION TECHNOLOGIES OECD 2010 Case studies indicate that subsidies are suited best to a situation where there is a clearly identifiable capital or fixed assets investment.
once the initial investment has been made, what steps need to be taken to ensure that the ongoing costs of maintaining the system will be met?
but central to shared reaping of benefits from the investments made. The financial incentive packages in these countries are designed to insulate physicians from potential productivity and upfront financial losses from adoption of ICTS.
The challenges described above place health ICT investments in a space that is quite different from other capital investments in the health sector, for example a hospital building or medical equipment.
Adoption has remained remarkably uneven despite more than a decade of promotion and significant public investment. There are large variations particularly in the adoption
Chapter 1 considers how investments in health ICTS can generate value for health systems. Drawing from case studies, Chapter 1 illustrates the types of benefits that can result from implementation of ICTS.
underpin the business case for further investment and identify outcome drivers. The term value in this report implies a broader view of how ICTS can produce results than the usual metrics commonly used in return on investment analyses (ROI.
In the health sector there is often no measure of performance analogous to profits for private sector firms.
While a non-healthcare business selecting its investments in ICTS might consider only financial return on investment,
In Canada, a relatively modest investment in IT has led to a major rapid change in diabetes care, yielding significant payoffs.
This leads to increased capacity, more effective healthcare and more satisfied consumers (Box 1. 3). Box 1. 3. Benefits of investments in picture archiving
British Columbia has employed both quantitative and qualitative approaches to measuring the benefits of investments in PACS.
It is also necessary to recognise that there may be lags between ICT investments and benefit realisation (Devaraj and Kohli
see Box 1. 4). There is a clear need for a more organised approach to systematic research in this area to assist OECD governments to determine which investment strategies are most likely to achieve savings.
Despite the difficulty of measuring the cost-benefits associated with investments in ICTS, increasing numbers of health care organisations are reaping nonfinancial, intangible gains from these technologies.
or support them in making investments in ICT systems, limited resources can deter from pursuing these systems.
In particular since the costs associated with adopting new technologies are shared not equitably among stakeholders, investments
) One significant barrier to investment in ICTS is recognised the widely fact that any resulting cost savings may not always accrue to the implementer,
and considerable investment is required both initially and on an ongoing basis. For many small to mid-size primary care practices this means that they cannot afford to implement an EMR system as the costs are often prohibitive.
the decision by physicians to adopt EHRS will depend both on the foreseeable financial returns on their investment,
Even with such an investment, differences in the underlying architecture of EHR systems, and the way that the systems are configured
technical and information needs requiring additional effort and/or investment in research, development, testing, and evaluation.
The former are designed to affect cost-benefit structures and directly influence physicians'returns on investment.
These types of financial interventions are needed to defray upfront investment costs and initial productivity losses.
First, subsidies are suited best to a situation where there is a clearly identifiable capital investment. Second, sometimes it can be difficult to judge the appropriate level of a subsidy.
Ideally, public and private incentive systems should be aligned to maximise benefits, fostering long-term use and continued investment in ICT and health information exchange.
Physicians and medical office assistants (MOAS) are compensated for their investment in making changes in their practices.
Health care organisations, public or private, need to project a positive return on investment (whether financial or otherwise),
It would seem that the return on investment from implementation of ICTS should be relatively straightforward to assess
Box 3. 3. Delayed benefit realisation Studies suggest that the financial benefits from ICT implementation are realised often only many years after the investment was made
and improved service efficiency followed on average two years behind initial health care ICT investment. The same study
however, concludes that the financial breakeven point will strictly depend on the levels of investment. Above a certain level of ICT investment or tipping point the cost impacts levels off
and is associated with cost reductions. The levelling off occurs despite the added costs of more ICT capital;
The European union's e-Health Impact Project, covering ten case studies in different countries and contexts, identified a 2: 1 return on e-health investment
organisational, competitive Payors/Health plans Accurate patient and treatment information Favourable but concerned about ROI and investment expectations No immediate ROI and high upfront costs Pharmacies
The result is that after more than a decade of large investments in health ICTS, OECD governments are still unable to provide reliable evaluations of the financial and social returns on their investments.
This chapter reports main findings of an analysis of the challenges associated with the measurement and evaluation of ICT use in health care in nine OECD countries and at EU level (OECD, 2008.
and realise the benefits intended from investment in these technologies? On the surface, the answer appears simple.
Nonetheless, more than a decade of implementation efforts provide a picture of significant public investment (Box 5. 1),
THE ROLE OF INFORMATION AND COMMUNICATION TECHNOLOGIES OECD 2010 Box 5. 1. Implementation efforts provide a picture of significant public investment Health ICT investments costs are difficult
ranging between 0. 1%to 0. 3%of total expenditure on health in the three countries investment per capita varying from USD 5 to 13.
In a strategic planning document, Canada Health Infoway in 2006 reported a rough assessment of total investment costs per capita to establish a fully functional EHR system that ranged from an estimated CAD 133
and the United kingdom. Striking in both the Infoway and Anderson estimates as well as those from this present study shown below (see Table 5. 2) is the relatively large per capita health ICT investment in the United kingdom
therefore, inevitably underestimate the true public investment. Other countries may well be investing comparable amounts per capita
) 76 8274 (8. 7%of GDP) Current budget for ICT initiatives (million USD at exchange rate) 2 0615 4556,7 1158,9 Current investment per capita (USD) 10
20 74812 Total investment per capita (USD) 54.34 340.27 Note: The budget allocation amounts shown for Canada in both Tables 5. 1 and 5. 2 do not include 25
What investments are necessary and what costs will be incurred by physicians? What are expected the benefits? The results were used to decide between specific implementation approaches or strategies,
technical and information needs requiring additional effort and/or investment in research, development, testing, and evaluation.
More than a decade of efforts provide a picture of significant public investments, resulting in both notable successes
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