Estimating the impact of the Internet of Things on productivity in Europe

Héctor Espinoza, Gerhard Kling, Frank McGroarty, Mary O'Mahony and Xenia Ziouvelou

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The Internet of Things (IoT) refers to interconnected devices and objects that collect and transmit data via the Internet. The IoT is an evolving technology, promising to revolutionise industries, but also demanding far-reaching policy changes (e.g. in terms of data security and privacy), which involve significant resources. This paper reviews the evidence on uptake and the economic impact of the IoT during its early years of inception. It uses a growth accounting framework to evaluate the likely impact of the IoT on productivity. Estimating the effect of new technologies on productivity is an essential step in evaluating the ‘economic value-added’, justifying resources dedicated to facilitating the adoption of innovations. We find a positive impact of the IoT on productivity, however relatively small, given that the IoT is still at an early stage of development. We present projections on the impact of the IoT under a number of scenarios.

Keywords: business; economics; evaluation of new technology; growth accounting; impact; industry; information science; Internet of Things; productivity (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Date: 2020-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Heliyon, May, 2020, 6(5). ISSN: 2405-8440

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