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Productivity growth in UK industries, 1970-2000: structural change and the role of ICT

Oulton, Nicholas and Srinivasan, Sylaja (2005) Productivity growth in UK industries, 1970-2000: structural change and the role of ICT. Bank of England working papers, 259. Bank of England, London, UK.

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Abstract

This paper uses a new industry-level dataset to quantify the roles of structural change and information and communication technology (ICT) in explaining productivity growth in the United Kingdom, 1970-2000. The dataset is for 34 industries covering the whole economy, of which 31 industries are in the market sector. Using growth accounting, we find that ICT capital accounted for 13% of productivity growth in the market sector in 1970-79 (ie 0.47 percentage points out of 3.62% per annum growth of GDP per hour), 26% in 1979-90, and 28% in 1990-2000. In 1995-2000 the proportion rises to 47%. ICT capital, despite only being a small fraction of the total capital stock, contributed as much to growth as non-ICT capital in 1990-2000 and getting on for twice as much in 1995-2000. Econometric evidence also supports an important role for ICT. Total factor productivity (TFP) growth slowed down in 1995-2000, but we find econometric evidence that a boom in ‘complementary investment’, ie expenditure on reorganisation that accompanies ICT investment but is not officially measured as investment, could have led to a decline in the conventional measure of TFP growth.

Item Type: Monograph (Working Paper)
Official URL: http://www.bankofengland.co.uk/publications/Pages/...
Additional Information: © 2005 Bank of England
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 259
Date Deposited: 21 Mar 2013 16:22
URL: http://eprints.lse.ac.uk/49354/

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