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Information technology’s impacts on productivity and welfare: a review

Clem Tisdell (School of Economics, The University of Queensland, St Lucia, Australia)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 6 March 2017

Abstract

Purpose

The purpose of this paper is to outline and examine existing economic findings about the effects of information and communication technology on economic productivity, welfare and social change.

Design/methodology/approach

Initially, existing findings about consequences of ICT for macro-level economic activity and productivity are outlined, and then this is correspondingly done for firms and for industries before a variety of welfare and social consequences of ICT are discussed. The industry-level discussion includes empirical data as well as analytical material.

Findings

Most studies indicate that ICT has significantly added to GDP and has been growth enhancing but these effects vary considerably between economies. The elasticity of aggregate production in relation to investment in ICT has risen with the passage of time. Reasons for this are suggested. The contribution of value added to the output of different industries varies substantially. At the micro-economic level, it is shown how ICT can increase technical and allocative efficiency, and how it can increase consumers’ surplus and producers’ surplus by lowering market transaction costs. Socioeconomic inequalities and concerns arising from the supply of e-commodities are discussed.

Originality/value

Provides a comprehensive but short overview of economic findings about the impact of ICT and brings attention to socioeconomic issues that have been overlooked or downplayed in that discussion. Includes new micro-economic analysis of the distributional impact of ICT and indicates areas requiring social policy intervention.

Keywords

Acknowledgements

This is a revised copy of a paper presented at the “Symposium on Broadband Enabled Communities and Regional Economic Development” held at the University of Southern Queensland, Toowoomba in November, 2014. The author would like to thank Khorshed Alam for his useful feedback on an earlier version of this paper. The author also wishes to thank the two referees for this journal for their useful comments which have contributed to the revision of this paper. The usual caveat applies.

Citation

Tisdell, C. (2017), "Information technology’s impacts on productivity and welfare: a review", International Journal of Social Economics, Vol. 44 No. 3, pp. 400-413. https://doi.org/10.1108/IJSE-06-2015-0151

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited