Digital Dark Matter and the Economic Contribution of Apache

36 Pages Posted: 5 Oct 2013 Last revised: 8 Oct 2014

Shane M. Greenstein

Harvard University - Technology & Operations Management Unit; National Bureau of Economic Research (NBER)

Frank Nagle

Harvard Business School

Date Written: October 2013

Abstract

Researchers have long hypothesized that spillovers from government, university, and private company R&D contribute to economic growth, but these contributions may be difficult to measure when they take a non-pecuniary form. The growth of networking devices and the Internet in the 1990s and 2000s magnified these challenges, as illustrated by the deployment of the descendent of the NCSA HTTPd server, otherwise known as Apache. This study asks whether this experience could produce measurement issues in standard productivity analysis, specifically, omission and attribution issues, and, if so, whether the magnitude is large enough to matter. The study develops and analyzes a novel data set consisting of a 1% sample of all outward-facing web servers used in the United States. We find that use of Apache potentially accounts for a mismeasurement of somewhere between $2 billion and $12 billion, which equates to between1.3 percent and 8.7 percent of the stock of prepackaged software in private fixed investment in the United States. We argue that these findings point to a large potential undercounting of the rate or return from IT spillovers from the invention of the Internet, and to a large potential undercounting of "digital dark matter" in general.

Suggested Citation

Greenstein, Shane M. and Nagle, Frank, Digital Dark Matter and the Economic Contribution of Apache (October 2013). NBER Working Paper No. w19507. Available at SSRN: https://ssrn.com/abstract=2336372

Shane M. Greenstein (Contact Author)

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Frank Nagle

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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