The Relationship between ICT Investment and Productivity in the Canadian Economy: A Review of the Evidence

Andrew Sharpe

No 2006-05, CSLS Research Reports from Centre for the Study of Living Standards

Abstract: The objective of this report is to shed light on the relationship between information and communications technologies (ICT) and productivity in the Canadian economy. The first part provides a detailed overview of ICT investment and capital by ICT component (computers, communications equipment, and software), and ICT investment and capital stock per worker by ICT component in Canada for the total economy and for 20 NAICS industries, focusing on trends over the 1980-2005 period. The second part contains a general discussion of ICT and productivity issues, with particular emphasis on the relationship between investment in ICT and productivity. The third part provides a review of the literature on the relationship between ICT and productivity, again with a particular emphasis on Canadian studies. The key conclusion of the report is that ICT has been the driving force behind the acceleration of productivity growth in Canada and the United States since 1996. However, the potential of ICT has not been fully exploited and we will continue to see significant ICT contributions to productivity growth in coming years. The role for government is to develop appropriate policy frameworks so that the productivity-enhancing effects of ICT can be fully realized.

Keywords: ICT investment; productivity; information and communication technology; capital stock; NAICS industries; Canada; United States; OECD (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-cse and nep-eff
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