ICT and Europe's productivity performance industry-level growth account comparisons with the United States

In this paper we present a new industry-level database to analyse sources of growth in four major European countries: France, Germany, Netherlands and United Kingdom (EU-4), in comparison with the United States for the period 1979-2000. Aggregate labour productivity growth is decomposed into industry-level contributions of labour quality, ICT and non-ICT capital deepening and TFP. A small set of service industries is mainly responsible for the acceleration in ICT capital deepening in both regions, but their contribution to growth is lower in the EU-4 than in the U.S. TFP in these industries accelerated in the U.S in the 1990s, but not in Europe. In addition, widespread deceleration in non-ICT capital deepening in the EU-4 has led to a European productivity slowdown. This is linked to wage moderation in the 1990s.