Structural Sources of a Productivity Decline in the Digital Economy

STRUCTURAL SOURCES OF A PRODUCTIVITY DECLINE IN THE DIGITAL ECONOMY

Chihiro Watanabe1 ,2, Kuniko Moriya3 , Yuji Tou4 , Pekka Neittaanmäki5 1,5Faculty of Information Technology,University of Jyväskylä, Finland 2 International Institute for Applied Systems Analysis (IIASA), Austria 3 Research and Statistics Department, Bank of Japan, Tokyo, Japan 4 Dept. of Ind. Engineering &Magm., Tokyo Institute of Technology, Tokyo, Japan 

ABSTRACT

While the Internet-driven digitized innovation has provided us with extraordinary services and welfare, productivity in industrialized countries has been confronted with an apparent decline, and it has raised the question of a productivity paradox. The limitations of the GDP statistics in measuring the digital economy have become an important subject. Based on national accounting framework and utilizing the development trajectories of 500 global information and communication technology (ICT) firms,structural sources of such decline were investigated. It was identified the two-faced nature of ICT that resulting in R&D-intensive firms falling into a vicious cycle between R&D increase and marginal productivity of ICT decline. Confronting such circumstances, R&D-intensive firms have been endeavoring to transform into disruptive business model by harnessing the vigor of soft innovation resources. This transformation leads to spontaneous creation of uncaptured GDP and provides insightful suggestion to overcome the limitation of the GDP statistics in the digital economy. 

KEYWORDS

Digital economy, productivity decline, limitation of GDP, two-faced nature of ICT, bipolarization 

More Details:

http://aircconline.com/ijmit/V10N1/10118ijmit01.pdf