Centre for Vocational Education Research LSE RSS Email Facebook Twitter


CEP discussion paper
Productivity and ICT: A Review of the Evidence
Mirko Draca, Raffaella Sadun and John Van Reenen
August 2006
Paper No' CEPDP0749:
Full Paper (pdf)

JEL Classification: E22; E23; F1; O11

Tags: ict; productivity; organisation

We survey the micro and macro literature on the impact of Information and Communication Technologies (ICTs) on productivity. The “Solow Paradox” of the absence of an impact of ICT on productivity no longer holds, if it ever did. Both growth accounting and econometric evidence suggest an important role for ICTs in accounting for productivity. In fact, the empirical estimates suggest a much larger impact of ICT on productivity than would be expected from the standard neoclassical model that we focus on. We discuss the various explanations for these results, including the popular notion of complementary organizational capital. Finally, we offer suggestions for where the literature needs to go.