Productivity and Digitilization in Europe: Paving the Road to Faster Growth

Bart van Ark ()

Communications & Strategies, 2015, vol. 1, issue 100, 107-124

Abstract: This paper reviews the latest evidence on the contribution of Information and Communication Technology (ICT) – and the digital economy more broadly – on economic growth for Europe and the United States since the late 1990s until most recently. The paper provides estimates on the contributions from ICT to growth from three channels affecting the long-term growth performance of entire economies: 1) a productivity effect through the ICT-producing sector, 2) an investment effect from ICT-using industries through capital deepening, and 3) a productivity effect from an efficiency rise through the use of ICT which goes beyond the direct capital deepening effect. The study finds that the slowing of the total factor productivity growth rate in Europe reflects a failure to effectively adopt new technologies and innovation. It is also argued that the lack of rapid accumulation of intangible capital (such as information assets, innovative property, and economic competencies) constrains Europe's ability to accelerate and facilitate the innovation effects from digital technology. Finally, we discuss some policy implication emerging from our work, in particular the need to complete the Single Market in Europe to improve the productivity effects from the digital economy.

Keywords: information and communication technology; productivity; economic growth; economic policy; Europe. (search for similar items in EconPapers)
JEL-codes: D24 L63 O33 O47 O52 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://repec.idate.org/RePEc/idt/journl/CS10005/CS100_vanARK.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idt:journl:cs10005

Access Statistics for this article

More articles in Communications & Strategies from IDATE, Com&Strat dept. Contact information at EDIRC.
Bibliographic data for series maintained by BLAVIER Thomas ( this e-mail address is bad, please contact ).