Synopsis: Ict:

Website: www. sera. ie Submission on the Draft Consultation Paper for the Rural Development Programme 2014-2020

-A core objective of Government policy thinking is balanced †regional developmentâ€. The NSS represents the Government†s roadmap for achieving

Sectoral programming, by its nature, will not allow for a meaningful evaluation of the achievement of balanced regional development

of the NUTS III Regions as the practical level for spatial programming in the new RDP

data and reports are needed more promptly and must be produced more speedily. This should include progress updates on projects from

implementing bodies as well as quantitative data -The levels of bureaucracy and administrative burden on beneficiaries within

Big data is a goldmine for companies...p. 6 Boosting e-skills in European higher education requires political will at national level...

private ICT companies such as Google Hewlett packard, Microsoft, Accenture and Samsung The pledges also come from universities

academies and local governments as well as national coalitions which have been launched in Latvia, Lithuania, Romania and Poland.

Computer science Ambassador Scheme for 45 secondary school pupils, involving 60 hours guided experience of digital opportunities.

deliver short †hands on†courses in core computer science for pupils aged 14-15 will run until 2015 and so far half of the

target has been met Another pledge comes from Microsoft Europe which aims to increase the number of their high quality apprenticeships and

internships by half over three years, from the current 9, 000 to 13,500. So far the

Institutional Affairs at Microsoft, told Euractiv that in January the company committed to a further two pledges focused

computer science in a fun way Schaart said that the Commission has promoted rightly digitalisation and its adoption by society as one of the

digital economy, †Microsoft†s senior director for EU institutional Affairs said John Higgins, director general of

At the same time, digitisation created six million jobs globally in 2011, despite the economic downturn, as ICT is widely

believe a new wave of big data and smartphone applications has the highest potential in terms of job creation Filling the gaps

Moreover, the ICT sector will be in a desperate need for skilled workers according to experts. But how big the skills

Institutional Affairs at Microsoft, said that the growing integration of ICT across various sectors, the lack of skilled professionals is of

computer engineers. The ICT sector currently lacks people with the right skills to accomplish a number of functions

from developing software applications and security systems, to providing lower -end support services such as systems and network administration and user support, â€

Schaart told Euractiv No image problem Higgins said that employers face a big challenge in communicating what sort of

study computer science While the industry still has an image problem of only employing the stereotypical tech geek, Higgins added

a computer programme degree can lead to jobs making music videos, computer games or developing medical technology

However, many ICT-related educations are not providing the ICT sector workers that suit the industry needs, making

and only 20%of computing graduates each year are women According to Microsfot†s Schaart, the

rules on taxation and data protection ran the risk of stifling the growth these tech businesses can create,

â€oetake data protection, †he said, â€oethere is one EU data commissioner but the legislation in countries is still different

â€oewhen we go to Germany, the legislation is completely different. So why do you have the European one?

commission one-stop website for entrepreneurs. Other forums include the Web Investors Forum, a crowdfunding

network and Tech Allstars group run by DG Connect The conference was chosen to Continued on Page 5

data is a goldmine for companies Computer algorithms are better at diagnosing severe cancer than

humans, Kenneth Cukier told Euractiv, and big data can predict crimes before they are committed and earn businesses money

Kenneth Cukier is data editor at The Economist and co-author with Viktor Mayer -Schã nberger of Big data:

A Revolution That Will Transform How We Live Work and Think. Translated into 20 languages, the book

was a New york times Bestseller. He spoke to Euractiv†s James Crisp about what big data can teach us

What is big data Well there†s no single definition, which is probably a good thing,

because to define it is to constrain it. Broadly speaking though mankind has more information now than ever,

data can teach us things that are extremely interesting, in fact things we would never have been able to find out with smaller

algorithms onto these large amounts of data Let me give you an example. Google handles more than a billion searches in the

United states every day and stores them all. It took the 50 million most commonly searched terms between 2003 and 2008 and

data from the Centers for Disease Control and Prevention. The idea was to see whether

Google ran all the terms through an algorithm †a way of making a calculation -that ranked the terms by how well they

correlated with flu outbreaks. Then, the system tried combining the terms. With a billion searches a day it would have been

against their data, Google identified 45 terms that strongly coincided with CDC€ s data on flu outbreaks

The Google trends method has been criticised, because its been wrong in some instances. However that is not the whole

story. It†s only been wrong like a weather forecast is wrong, when it is sunny when it

collects data. Some of the data it collects has actually improved the accuracy of German

weather forecasting by 7%,which is a considerable improvement Lufthansa now sells that data to a meteorological company, which is a

great example of how big data can be commodified So big data can be sold Absolutely. In fact big data is a potential

gold mine. There are a few forward-thinking companies who have realised they can sell the data they collect as they go about their

everyday work. It will be a revenue generator In the future I expect to see companies employing data or chief information

officers, who will be responsible for this It†s not just companies. In the future each of us will be able to sell our data.

People will upload data to online data exchanges neutral platforms which can bring the data

to the marketplace for a fair price. And there will be a market for this data, as people

realise the enormous potential of big data Will there be an impact on how people work

There will be a significant impact. This will be a revolution in the workplace. Both white colour and blue collar jobs will be

replaced by big data, but that destruction will also create jobs It†s a demonstrable fact that a computer

algorithm is better at diagnosing severe cancer than a human. But in in a world

where data shape decisions more and more what purpose will remain for people, or for intuition, or for going against the facts

Personally, I believe there will always remain a need for the human touch. But it

is hard to predict the impact of the big data revolution What can policymakers do to ensure

that the power of big data can be exploited The issue of data privacy and protection has been deservedly getting a lot of attention

recently. What needs to happen is a change in law to reflect the reality of this type of

statistical collection and ensure it is aligned with our values Current laws are broadly based on the

idea of notice and consent. Essentially, this means that if you want to use someone†s

data, you have to tell them what you are collecting and why That isn†t really feasible with big data

Continued on Page 7 Euractiv ESKILLS FOR GROWTH SPECIAL REPORT 5-9 may 2014 7 Boosting e-skills in

European higher education requires political will at national level With 25%of adults in the European

five has no computer experience Age disparities were detected also with high school pupils having sometimes better

Digital divide A study by the Commission on ICT in education also showed dramatic results in EU countries:

exercise softwares while 70%of teachers are asking for training to improve their digital skills.

purpose the data will be used for Small data is like a waltz. There†s a clear

tempo with known steps. Big data is like a mosh pit or jazz-improv. No one knows

what†s coming next So regulators need to support this new reality, not least because of the huge

potential of big data We need to move from a notice and consent to a system of consent which allows

a person to give consent, for that data to be used and reused and reused without

What are the dangers of big data Of course there are risks, and there will be challenging questions for us to answer

Big data could be used to predict which people are most likely to commit murder That throws up interesting questions

in a way a crisis of big data. Decisions were made on economic models that turned out to be false

data will change the world for the better Continued from Page 6 Continued on Page 8

to the final user and the authors properly remunerated. †But open educational resources are not just a recommendation from the

the digital economy. Every year approximately 100,000 new vacancies are created in an attempt to fill the gap between the †e-skilled

Digital economy Greece is also signing the National Coalition for the Digital economy, which is part of the Grand Coalition for Digital

Jobs and Training, launched by the Commissioner for the Digital Agenda Neelie Kroes, in March 2013, Sirros stated

and ensuring high-speed internet in all schools, †he said Regarding higher education, he stressed, students will benefit from the

data mentioned is catalytic and shows us that this is the direction we need to move

and provides data, and other evidence that demonstrates how a business creates and delivers value to cus

The role of information technology and its relationship to the business has shifted over the last 20 years.

design of information systems, to the design of IT-enabled business processes, and more recently to the design of business models for services provided through

platforms initially started in the networked digital industry (telecom, media entertainment, gaming. software, etc. it is increasingly being propagated to all

industries whether healthcare, energy, retail, or financial services. As more cus -tomers consume products and services offered through digital platforms, the

Global core, governance, business units, services and linkages 5 No No Timmers (1998) Product/service/information flow

governance and intranet /extranet capabilities 4 No No Mahadevan (2000) Value stream, revenue stream logistical stream

process model, internet -enabled commerce relationship, organizational form and Value proposition 8 No Some Chesbrough and

core technology investments and bottom line 4 No Some Hamel (2001) Core strategy, strategic resources value network and customer

interface 4 No No Petrovic et al. 2001) Value model, resource model production model, customer relations model, revenue

success factors, channels, core competencies, customer segments, and IT infrastructure 8 No No Applegate (2001) Concept, capabilities and value 3 No No

into one fabric†it no longer makes sense to talk about information technology as a tool or environment that is kept at arm†s length from business activities (El Sawy

but today, riding on rails of application programming interfaces (APIS) and broadband fiber optics, we can ††mash up††digital services

on Understanding the Digital economy: Data, Tools and Research, held at the U s. Department of commerce, Washington, D c.,25-26 may 1999.

It draws upon joint work with Edward Steinmueller, and with Gavin Wright, and has had the benefit of detailed editorial comments from Erik Brynolfsson

Forthcoming in Understanding the Digital economy eds.,, E. Brynolfsson and B. Kahin (eds. MIT Press Please do not reproduce without author†s expressed permission

Fax: 44+(0) 1865+279299; E-mail:<<paul. david@economics. ox. ac. uk >Understanding the Digital economy's Evolution and the Path of

Measured Productivity Growth Present and Future in the Mirror of the Past 1 1. The Computer Revolution, the"Productivity Paradox"and the Economists

Over the past forty years, computers have evolved from a specialized and limited role in the information

processing and communication processes of modern organizations to become a general purpose tool that can be

computers"were surrounded large machines by peripheral equipment and tended by specialized technical staff working in specially constructed and air conditioned centers,

desktops and work areas of secretaries, factory workers and shipping clerks, often side by side with the telecommunication equipment linking organizations to their suppliers and customers.

In the process, computers and networks of computers have become an integral part of the research and design operations of most

enterprises and, increasingly, an essential tool supporting control and decision-making at both middle and top

In the latter half of this forty year revolution, microprocessors allowed computers to escape from their â€oeboxes, †embedding information processing in a growing array of artifacts as diverse as greeting cards

It was at that point, in the midst of the â€oepersonal computer revolution, †that mounting concerns about the

absence of an evident link between progress in digital information technologies and the productivity performance of the economy at large crystallized around the perception that the U s.,along with other advanced

formation of this"problematic"view of the digital information technology was an offhand (yet nonetheless pithy) remark made in the summer of 1987 by Robert Solow, Institute Professor at MIT and Economics Nobel

"You can see the computer age everywhere but in the productivity statistics.""1 Almost overnight this contrasting juxtaposition achieved the status of being treated as the leading

office and telecommunications equipment since the late 1980's as part of a far-reaching technological and

as a consequence, the emergence of modern computer, telecommunication and satellite technologies have changed fundamentally the structure of the American economy. â€

the rise of computer capital, and OCAM (office, computing and accounting machinery) capital more generally

arguing that the imputed gross earnings on hardware and software stocks amount to such a small fraction of GDP that the rapid growth of real computer assets per se can hardly be expected to be

making a very significant contribution to the real GDP growth rate. 6 But, however valid an observation that

Ch. 4, Table 4-2. The 1987-1993 growth rates of inputs of computer hardware and software

moreover, assume that investments embodying information technology earn only a normal private rate of return and do not yield significantly higher â€oesocial rates of return†due to externalities and other spill

was not a large positive gap between the social and the private rates of return on this the new information technology and

computers and related information equipment and software--due in part to misplaced technological enthusiasm and also to exaggeration of the relative scale of those capital expenditures, or

performance of the digital economy. Having persisted since 1989 in advancing the latter, â€oeregime transition†interpretation of the so-called productivity paradox,

regard to the computer revolution's potential economic impact, I should make it clear from the outset that

emerging digital economy continues to rest upon the idea that we are in the midst of a complex, contingent and

around digital information processing and its distribution via electronic and electro-optical networks has turned out to be an affair in which the disruptive potentialities of the novel technologies and new modes of business

total factor productivity residual that could be attributed reasonably to the exploitation of digital information technologies. Although intent to divine the early harbingers of a more widespread recovery in productivity

The development and exploitation of digital information, like previous profound historical transformations based upon new â€oegeneral purpose engines, †turns out to entail a complicated techno-economic

disappointments with the impact of computers upon the more readily measurable forms of task-productivity.

argument here is that the historical course of the development of the personal computer as a general-purpose

of insights into the dynamics of the digital economy and its productivity performance. Section 6 concludes by

and computer productivity paradox are first and foremost consequences of a mismeasurement problem must produce a consistent account of the timing and

questions we should briefly review their bearing on the puzzle of the slowdown and the computer productivity

and thereby help us to resolve the information technology paradox, would be some quantitative evidence that the suspected upward bias in the aggregate output deflators has been getting

Gordon (1998a) presents more finely disaggregated data on labor productivity, which reveals the pervasiveness of the slowdown

New information technologies, and improved access to marketing data are indeed enabling faster, less costly product innovation, manufacturing process redesign,

and shorter product life cycles. This has been a central theme in the business and economics literature on â€oemodern manufacturing†at least since the 1980's. 15

The increasing proliferation of new goods and its connection with the application of computers, electronic

computer models, which currently number over 400, or computer software titles, the count of which is in the

neighborhood of a quarter of a million), the multiplication of the number of models available for consumers to

By combining this with data from Bailey and Gordon (1988) on the rising number of

Of course, some progress has been made in resolving the computer productivity paradox by virtue of the introduction of so-called â€oehedonic†price indexes for the output of the computer and electronic business

equipment industries themselves. These indexes reflect the spectacularly rapid decline in the price-performance ratios of such forms of capital.

Thus, the â€oehedonic†correction of computer and related equipment prices has done wonders as a boost to the growth rate of output and multifactor productivity in the producing industry;

token, the hedonic deflation of investment expenditures on computer equipment contributes to raising the measured growth of the computer capital services,

which are used intensively as inputs in a number of sectors including banking, financial services and wholesale trade within the service sector.

computer-capital intensity, and therefore in overall tangible capital-intensity, supports the growth rate of labor

The first involves the surprising appearance of â€oeexcess rates of return on computer capital. †These

industry producing computer equipment. See, e g.,, Wykoff (1995) for an evaluation of other dimensions of the distortions

computer investments, and the weaker (time series) effects gauged in terms of task productivity, might indicate simply that very high gross private rates of return are associated with such capital expenditures.

the price-performance ratio of new computer equipment has been falling, these seemingly â€oeexcess†private returns would be called for to equalize net private rates of return on various assets held by the company

additional intangible investments that were correlatives of high information technology-intensity. Much of the evidence for this is reasonably direct,

value of company tangibles and the market valuation of computer-intensive firms for concluding that the

diffusion of information technologies among large business firms has entailed substantial levels of intangible asset formation. 23 The latter, of course, is reckoned neither on the output side (among the firms†revenue

increasingly widespread as digital information technologies diffuse throughout the economy, deserves further consideration 3. 2 Leaving out investments in organizational change:

23 Brynolfsson and Yang (1997, revised 1999) report that computer usage is associated with very high calculated values of

and the advent of digital information processing technologies in particular, having stimulated the creation of new software assets within the learning

organizations, has been marked by a relative rise in the production of intangible assets that have gone unrecorded in the national income and product accounts.

The problem of non-market production of intangibles in the form of computer software was relatively

4. Troubles with Computers: Effects of General Purpose Machines on Task-Productivity Laying the whole burden of explanation on the notion that existing concepts and methods are inadequate

in accounting for the effects of the computer revolution is, however, not satisfactory. Even if a large share of

development of technological artifacts and improvements in productivity for the users of those tools has indeed

that there are real problems in delivering on the productivity promises of the computer revolution 4. 1 Component performance and system performance

A common focus of attention in the computer revolution is the rapidity with which the performance of

The widespread acceptance of Moore's Law shapes user expectations and technological planning, not only in the integrated circuit industry,

For software designers, Moore's law promises that new computational resources will continue to grow

features so that the diverse needs of an ever-growing user community can be fulfilled. It need not follow that

any particular user will experience performance improvement as the result of component improvement. As has

even if the user adopts the new technology, the learning time in mastering new software, the

required for the more complex software to be executed will offset part or all of the gains from increasing

It is recognized now widely that the costs of personal computer ownership to the business organization may be tenfold the size of the acquisition costs of the computer itself. 24 Many of these costs are unrelated to the

24 Some of these costs are recorded directly while others are part of the learning investments being made by firms in formal

and informal â€oeon the job†knowledge acquisition about information technology 14 performance of microprocessor components and for many applications, the use of personal computers is

therefore relatively unaffected by microprocessor performance improvements. From a productivity measurement standpoint, the relatively constant unit costs imposed by personal computer ownership have been further

compounded by the costs of the continuing spread of the technology throughout the organization. To be sure

however, it is apparent to most sophisticated users of computers that the extension of these capabilities also creates a vast new array of problems that must be solved to achieve desired

modern organization will provide reasonably sophisticated information technology as part of the office equipment to which every employee is entitled

troubleshooting, file server support and standards for archiving and backup of electronic copies of documents all

now enter into the task of producing a business letter. The existence of new capabilities suggests the potential

computer-assisted task may fill the time previously allotted for its completion. Surely, this is not the average

information technology, and so destined to perpetuate itself as that technology become more and more elaborate Those seeking an answer to this question may find it helpful to begin by stepping back and explicitly

computer technology that has characterized the personal computer revolution, provided by David and Steinmueller (1999 Section 7 15

4. 2 The general purpose computing trajectory, from mainframes to the PC revolution The widespread diffusion of the stored program digital computer is intimately related to the

popularization of the personal computer as a"general purpose"technology for information processing, and the incremental transformation of this"information appliance"into the dominant technology of information

The historical process by which this was achieved in the case of the personal computer has had major implications,

not only for the success of personal computer technology and the hardware and software industries based upon it,

For the personal computer, as for its parent the mainframe, and its cousin the minicomputer, much

adaptation and specialization has been required to apply a general purpose information processing machine to particular purposes or tasks.

computer. It is something of an historical irony that the core elements of the adaptation problems attending this

GPT's diffusion into widespread business application may be seen to derive from the historical selection of a

trajectory of innovation that emphasized the"general purpose"character of the paradigmatic hardware and software components

The origins of the personal computer required the invention of the microprocessor which was a technical

solution to the problem of creating a more"general purpose"integrated circuit to serve a specific purpose, a

computers to allow their use for specialized control and computation applications supported the birth of the

minicomputer industry. These two developments provided the key trajectories for the birth of the personal

computer. As microprocessors became cheaper and more sophisticated and applications for dedicated information processing continued to expand,

a variety of task-specific computers came into existence One of the largest markets for such task specific computers created during the 1970's was that for

dedicated word-processing systems, which appeared as an incremental step in office automation, aimed at the task of producing documents repetitive in content

or format such as contracts, purchase orders, legal briefs, and insurance forms, that could be modified quickly and customized based upon stored formats and texts.

dedicated word processors were displaced rapidly by personal computers during the mid-1980's, as the latter were perceived to be more"flexible

"and more likely to be"upgrade-able"as new generations of software were offered by sources other than the computer vendors. 27 The dedicated word processor's demise was mirrored by

development in numerous markets where dedicated"task-specific"data processing systems had begun to develop. Digital Equipment Corporation, the leading minicomputer manufacturer retreated from its vertical

marketing strategy of offering computer systems specifically designed for newspapers, manufacturing enterprises, and service companies; it specialized instead in hardware production,

leaving the software market to independent software vendors. 28 This process, which had begun in the late 1970's as an effort to focus corporate

strategy, greatly accelerated during the 1980's with the advent of the large-scale personal computer platforms

27 Outside sourcing of applications software represented a significant departure from the proprietary software strategy that

the suppliers of dedicated word-processing systems had sought to implement during the 1970's, and which left them unable

to meet the rapidly rising demands for new, specialized applications software. Moreover, personal computers could use

many of the same peripherals, such as printers: because the widespread adoption of the new technology raised the demand

for compatible printers, the dedicated word processors found themselves unprotected by any persisting special advantages in

printing technology 28similar decisions were made by all of the U s. computer manufacturers. See the discussion in Steinmueller (1996

16 united under the IBM PC standard or utilizing that of Apple†s Macintosh. The"general purpose"software

produced for these two platforms not only discouraged task-specific software, it also created a new collection of

tasks and outputs specifically driven by the new capabilities such as"desk top publishing"(typeset quality

documents),"presentation graphics"(graphic artist quality illustrations for speeches and reports), and"advanced word processing"(the incorporation of graphics and tables into reports.

All of these changes improved the "look and feel"of information communication, its quality and style, the capability for an individual to express

ideas, and the quantity of such communications. But singly and severally they made very little progress in

changing the structure of work organization or the collective productivity of the work groups employing these

The disappearance of task-based computing in favor of general purpose personal computers and general purpose (or multipurpose) packaged software was completed

thus largely during the 1980's. 29 The early evolution of the personal computer can therefore be seen as cutting across the path of development of an entire

family of technically-feasible information processing systems focused on the improvement of"task-productivity "in applications ranging from word processing to manufacturing operations control.

operations of their less expensive (and less intelligent) cousins, the"intelligent"display terminals By 1990, then, the personal computer revolution while seizing control of the future of information

processing had left carnage in its wake, as many such movements tend to do. The revolutionaries had kept their

promise that the PC would match the computing performance of the mainframes of yesteryear. What was not

spread of partially networked personal computers supported the development of new database and data entry tasks, new analytical and reporting tasks,

and new demands for"user support"to make the general purpose technology deliver its potential

The local activities within the organization that were identified as candidates for personal computer applications often could

information system access, receive an array of service quality improvements. Arguably, many of these improvements are part of the productivity measurement problem,

The availability of 24-hour telephone reservation desks for airlines, or the construction of worldwide networks for securing hotel, rental automobile,

embedded in mainframe computers and the growing proliferation of personal computers. The primary bridge between these application environments was the widespread use of the IBM 3270, the DEC VT-100 and other standards for"intelligent

"data display terminals, the basis for interactive data display and entry to mainframe and minicomputer systems.

From their introduction, personal computers had software enabling the emulation of these terminals, providing further justification for

their adoption 30 For an historical account of a potential alternative path of user-driven technological development, one that entailed the

reorganization of businesses as an integral aspect of the computerization of their activities, see Caminer, Aris, Hermon and

which general purpose personal computers came to be furnished with"general purpose"personal computer software. It may be accepted that general purpose

hardware and software in combination did"empower"users to think of"insanely great"new applications--to

use the rhetoric of Steve jobs, one of Apple computer's cofounders. On the other hand, however, the disruptive effects of relentless innovation are inimical to the stabilization of routine and the improvement of

efficiency of routine performance which that brings. Moreover, at best only a very small number among the

innovative software programs turn out to address the sort of mundane tasks that are sufficiently common to permit them to make a difference to the performance of a large number of users.

But the ubiquity and complementary of these dual"general purpose enginesâ€--personal computer hardware and packaged software

--has the side-effect of foreclosing the apparent need for more specialized task-oriented software development. 31

Worse still, by the mid-1990's, the competition among packaged software vendors for extending the

generality of their offerings became a syndrome with its own name:""creeping featurism"or"featuritis."

light of these developments in 1995, Nathan Myrvhold of Microsoft suggested that software is a gas that

After all, if we hadn't brought your processor to its knees, why else would you get

community that continuous technological progress and upgrading of computers, with which they are centrally engaged, is ultimately for the benefit of the user.

From their perspective, the key to future success lies in establishing increasingly powerful platforms for new generations of software,

whereas among users, these developments may be welcomed by some while loathed by others. What can be predicted reliably, however, is

that the costs of adjustment, learning, and sheer"futzing around"with the new systems on the part of less skilled

users will continue to severely constrain their contributions to productivity 5. Dark Journey Towards the Brighter Future?

around a new general purpose technology, the microelectronic digital computing engine--or, for simplicity â€oethe computer. â€

Recent work in the spirit of the new growth theory has sought to generalize on the idea (formulated by

32 As quoted in W. Wayt Gibbs, â€oetaking Computers to Taskâ€, Scientific American, July, 1997

By drawing an explicit analogy between â€oethe dynamo and the computer, †David (1991 sought to use the U s. historical experience to give a measure of concreteness to the general observation that an

5. 1 Diffusion, dynamos and computers Although central generating stations for electric lighting systems were introduced first by Edison in

Recent estimates of the growth of computer stocks and the flow of services therefrom are consistent with

when computers had evolved not yet so far beyond their limited role in information processing machinery, computer equipment and the larger category of office, accounting

and computing machinery OCAM) were providing only 0. 56 percent and 1. 5 percent, respectively, of the total flow of real services from

ratio of computer equipment services to all producers†durable equipment services in the U s Does the parallel carry over also,

experienced during the 1979-1997 phase of"the computer revolution";"it took 25 years for the electrified percent

the same quantitative change has been accomplished for the computer within with a span of only 18 years.

quality of the computer stock; whereas the electrification diffusion index simply compares horsepower rating of

growth of the ratio of computer equipment services to all producers'durable equipment services in the U s. turns

computer capital formation to make a substantial contribution to raising output growth in the economy point to the rapid

comparison of alternative estimates of net and gross basis computer service"contributions to growth "35 If we extrapolate from the (slowed) rate at

electrification of industry as to render illegitimate any attempt to gain insights into the dynamics of the computer

computer equipment has been plummeting so far exceeds the rate of fall in the real unit costs of electric energy

computer services for 1987-1993 to have been-7. 9 percent per annum, and compares that to-7. 0 percent per

electricity and quality adjusted computer services hardly warrants dismissing the relevance of seeking some insights into the dynamics of the transition to new general purpose technology by looking back at the dynamo

computer services--and, by implication, the comparison just reported--may be misleading. He contends that the hedonic price indexes for computers that come bundled with software actually would have fallen faster than

the (unbundled) price-performance ratios that have been used as deflators for investment in computer hardware If so, Sichel†s (1997) price indexes of quality adjusted â€oecomputer services†(from hardware and software) would

seriously underestimate the relevant rate of decline. But, Triplett†s argument seems to suppose that operationally

relevant â€oecomputer speed†is indexed appropriately by CPU-speed, whereas many industry observers have pointed out that the bundled PC operating system has grown so large that more processing power does not

translate into more â€oeeffective operating powerâ€. In other words, one should be thinking about the movements in

Furthermore, in the same vein it may be noticed that the slower rate of fall in computer services prices as

estimated by Sichel (1997) are more in accord with the observation that applications software packages also have

that CPU speed may be too heavily weighted by the hedonic indexes for hardware, inasmuch as the utility of (net) computer power

37 Fortuitously, these dates bound the period in which the possibility of a universal electrical supply system emerged in the

U s as a practical reality, based upon polyphase AC generators, AC motors, rotary converters, electric (DC) trams, and the

optimally exploit the capacity available on the new and faster hardware Finally, a deeper, and equally deserved comment may be offered regarding the casual dismissals of the

regime transition hypothesis on the grounds that the analogy between computer and dynamo is flawed by the

putative) discrepancy between the rate at which prices associated with electricity and computer services. Such

computer and dynamo, once again While there still seems to be considerable heuristic value in the historical analogy that has been drawn

between"the computer and the dynamo,"a cautious, even skeptical attitude is warranted in regard to the predictions for the future that some commentators have tried to extract from the existence of the points of close

it perhaps was still too soon to be disappointed that the computer revolution had failed to unleash a sustained

whatsoever about the future temporal pace of the computer's diffusion Least of all does it tell us that the detailed shape of the diffusion path that lies ahead will mirror the

detailed future shape of the diffusion path in the case of the digital information revolution from the experience of

6. Historical Perspectives on the Growth of Measured Productivity in the Digital economy 38 See David (1991a), Technical Appendix for this demonstration

likely to displace the use of personal computers in the production and distribution of information that must be

purpose computer was invented originally. What they do promise are greater and more systematic efforts to

information system design Firstly, a growing range of information technologies has become available that are purpose-built and

task-specific. Devices such as supermarket scanners were applied to a wide range of inventory and item tracking

mass-produced personal computer was neither appropriate nor robust. These more"task specialized"devices have become sufficiently ubiquitous to provide the infrastructure for task-oriented data acquisition and display

systems, in which up to date and precise overviews of the material flows through manufacturing and service

Secondly, the capabilities of advanced personal computers as â€oenetwork servers†have become sufficiently well developed that it is possible for companies to eliminate the chasm between the personal

computer and mainframe environment by developing the intermediate solution of client-server data processing systems. This development is still very much in progress

and resource sharing during the personal computer era. In this new networked environment, the re-configuration of work organization becomes a central issue;

and maintenance of critical company data resources must be resolved and these often are compelling enough to force redesign of the organizational structure

Thirdly, and related to the foregoing, the development of Internet technology has opened the door to an

entirely new class of organization-wide data processing applications as well as enormously enhanced the potential for collective and cooperative forms of work organization.

centralized data resources. The common standards defining Internet technology have the fortuitous feature that virtually all personal computers can be configured similarly,

facilitating not only intra-company network but also inter-company networking The"general purpose"trajectory followed by the spectacular development of personal computer

technology has reduced greatly the price-performance ratio of the hardware, without effecting commensurate savings in the resource costs of carrying out many specific, computerized tasks.

Some part of the limited resource savings clearly has been transitional, as personal computers were added to existing mainframe capacity

rather than substituted for it, and, indeed, were utilized under by being allocated the role of intelligent terminals

This aspect of the story bears some striking similarities with the early progress of factory electrification

and telecommunications components that allow them to be linked through sophisticated networks to other such appliances, mainframe computers and distributed

databases, thereby creating complex and interactive intelligent systems. This may well be an emerging trajectory of ICT development that will impinge directly upon the specific task performance of workers equipped

with such devices, and hence upon conventional measures of productivity improvement. 40 Other portents for the future, involving

transformations, may be seen in the expansion of inter-organizational computing for the mass of transactions involving purchase ordering,

with only about a fifth of the workforce time in large service sector firms providing data

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Wykoff, Andrew W.,â€oethe Impact of Computer Prices on International Comparisons of Labour Productivity, â€

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