Is the Information Technology Revolution Over?
50 Pages Posted: 1 Aug 2013
There are 2 versions of this paper
Is the Information Technology Revolution Over?
Date Written: March 15, 2013
Abstract
Given the slowdown in labor productivity growth in the mid-2000s, some have argued that the boost to labor productivity from IT may have run its course. This paper contributes three types of evidence to this debate. First, we show that since 2004, IT has continued to make a significant contribution to labor productivity growth in the United States, though it is no longer providing the boost it did during the productivity resurgence from 1995 to 2004. Second, we present evidence that semiconductor technology, a key ingredient of the IT revolution, has continued to advance at a rapid pace and that the BLS price index for microprocesssors may have substantially understated the rate of decline in prices in recent years. Finally, we develop projections of growth in trend labor productivity in the nonfarm business sector. The baseline projection of about 1¾ percent a year is better than recent history but is still below the long-run average of 2¼ percent. However, we see a reasonable prospect – particularly given the ongoing advance in semiconductors – that the pace of labor productivity growth could rise back up to or exceed the long-run average. While the evidence is far from conclusive, we judge that "No, the IT revolution is not over."
Keywords: Labor productivity, innovation, information technology
JEL Classification: O4, O3
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?
-
Does the "New Economy" Measure Up to the Great Inventions of the Past?
-
Energy Efficiency, User Cost Changes, and the Measurement of Durable Goods Prices
-
Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?
-
Computing Productivity: Firm-Level Evidence
By Erik Brynjolfsson and Lorin M. Hitt
-
Economic Growth in the OECD Area: Recent Trends at the Aggregate and Sectoral Level
By Stefano Scarpetta, Andrea Bassanini, ...