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ICT, Output and Productivity Growth in the United Kingdom: A Sectoral Analysis

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  • Giovanni Notaro

Abstract

Much has been written, including in previous issues of the Monitor, on the importance of Information and Communication Technologies (ICTs) in productivity growth, but this research has focused primarily on North America. In the fourth article, Giovanni Notaro of London Economics investigates this issue for the United Kingdom using a bottom-up analysis, in which aggregate trends are derived from trends in the 11 sectors of the economy. Using a standard growth accounting framework, Notaro finds ICTs made a substantial contribution to output growth in the largest sectors of the UK economy in the 1990s, and that ICT capital is a primary driver of labour productivity growth in all UK sectors except mining and quarrying. He concludes that the weaker productivity performance of the United Kingdom relative to the United States can be attributed mainly to slower accumulation of capital, both ICTs and non-ICTs.

Suggested Citation

  • Giovanni Notaro, 2004. "ICT, Output and Productivity Growth in the United Kingdom: A Sectoral Analysis," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 37-46, Spring.
    • Handle: RePEc:sls:ipmsls:v:8:y:2004:4
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    References listed on IDEAS

    as
    1. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The Case of the Missing Productivity Growth: Or, Does Information Technology Explain why Productivity Accelerated in the US but not the UK?," NBER Working Papers 10010, National Bureau of Economic Research, Inc.
    2. repec:dgr:rugggd:200368 is not listed on IDEAS
    3. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2004. "The Case of the Missing Productivity Growth, or Does Information Technology Explain Why Productivity Accelerated in the United States but Not in the United Kingdom?," NBER Chapters, in: NBER Macroeconomics Annual 2003, Volume 18, pages 9-82, National Bureau of Economic Research, Inc.
    4. Robert Inklaar & Mary O'Mahony & Marcel Timmer, 2005. "ICT AND EUROPE's PRODUCTIVITY PERFORMANCE: INDUSTRY‐LEVEL GROWTH ACCOUNT COMPARISONS WITH THE UNITED STATES," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 505-536, December.
    5. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
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    Cited by:

    1. Andrew Sharpe, 2007. "Lessons for Canada from International Productivity Experience," International Productivity Monitor, Centre for the Study of Living Standards, vol. 14, pages 20-37, Spring.

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    More about this item

    Keywords

    Productivity Growth; Productivity; Information and Communication Technologies; Information Technology; Growth Accounting; United Kingdom; Sector; Industry; Europe;
    All these keywords.

    JEL classification:

    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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