The Renewal of the Old Economy

This paper presents international comparisons of the contribution of information and communication technology (ICT) to output and productivity growth during the 1990s. It makes a distinction between ICT-producing manufacturing and service industries, intensive ICT-using manufacturing and service industries and the rest of the economy (the “non-ICT” sector). The paper presents measures of the contributions of each sector to growth and acceleration of growth in output, employment and labour productivity for ten major OECD countries during the 1990s. The main findings are that the productivity growth differentials between the United States and most European countries are partly explained by a larger and more productive ICT-producing sector in the United States, but also by bigger productivity contributions from ICT-using industries and services in the United States. The main reason for the productivity deceleration in most European countries is due to the under performance of the ...