Some Conjectures on the Tie Between Digital Divide and Regional Disparities

Marco Alderighi ()
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Marco Alderighi: Università della Valle d’Aosta

A chapter in Growth and Innovation of Competitive Regions, 2009, pp 193-214 from Springer

Abstract: In the mid-1980s there was much debate on the impact of information and communication technologies (ICTs) on productivity. The famous words of Robert Solow (1987) summarized the view of most skeptics: “You can see the computer age everywhere but in the productivity statistics.” In other words, according to Solow, there was no empirical evidence from the existing data that ICTs were generating productivity gains, but many firms were devoting considerable resources to ICT investment at the same time. This was known in the literature as the Solow paradox or productivity paradox. Many studies showed that ICTs contributed very little to productivity growth in the 1980s and in the early 1990s. Roach (1991) analyzed the productivity of white- and blue-collar workers between the mid-1970s and the mid-1980s. He showed that output per blue-collar worker grew by 16.9% between the mid-1970s and the mid-1980s, while output per white-collar worker, who mainly benefited from strong investment in ICTs, decreased by 6.6%. Loveman (1990) studied the impact of ICTs on the productivity of 60 business units estimating a production function by ordinary least squares. He showed that the contribution of ICT capital to output was approximately zero over the 5 year period studied in almost every subsample he examined. Barua, Kriebel and Mukhopadhyay (1991) found that there is a link between ICTs and intermediate indicators of productivity performance but not between ICTs and productivity. Morrison and Berndt (1990) using data from the US Bureau of Economic Analysis found evidence that every dollar spent on ICT in the manufacturing sector, delivered only about $0.80 of value on the margin, indicating general over-investment in ICT. Cron and Sobol (1983) studied the wholesale sector. They found no ICT impact on productivity even though they show that ICT use increases the variance of the performance, seeming to suggest that ICT adoption favors well-organized firms and damages the others.

Keywords: Regional Disparity; Digital Divide; Incentive Contract; Productivity Paradox; Contractible Investment (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/978-3-540-70924-4_9

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