The Productivity Paradox of the New Digital Economy

Bart van Ark*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

Despite a rapid increase in business spending on capital and services in Information and Communication Technology (ICT), the New Digital Economy (mobile technology, the internet, and cloud) has not yet generated any visible improvement in productivity growth. This article reviews the latest evidence for the United States, the United Kingdom and Germany. We find rapidly declining ICT prices, a shift from ICT investment to ICT services, and a continued increase in knowledge based-assets supporting ICT. However, the New Digital Economy is still in its "installation phase" and productivity effects may occur only once the technology enters the "deployment phase".

Original languageEnglish
Pages (from-to)3-18
Number of pages16
JournalInternational Productivity Monitor
Volume31
Publication statusPublished - 2016

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