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Investment in Information Technologies Grows Dramatically Since 1980
Nov 16, 2002

A recent publication of the OECD, “Measuring the Information Economy” shows that investment in ICT rose from less than 10% of total non-residential investment in the business sector in the early 1980s to significantly high levels in 2000. Investment in ITC was particularly high in countries such as the United States and Finland which devote close to 30% of the fix capital investment to this goods and services. Australia, the UK and Canada follow behind, while Spain registers the lowest level among OECD countries.

Investment in software was one of the most dynamic areas. In the United States, it rose from only 3.0% of non-residential investment in 1980 to 14.2% in 2000. Australia and Denmark also experienced a rapid increase, but the United Kingdom and Japan showed little change from the level of the early 1990s.

By 2000, investment in software accounted for over 50% of the major ICT investment categories in Denmark and Sweden. Communications equipment was the most important area for investment in Austria, Finland, Italy, Japan and Portugal, while IT equipment was first in Ireland. Real growth in ICT investment was particularly rapid over the second half of the 1990s. Investment in ICT equipment grew fastest, but the growth of investment in software accelerated sharply in the 1990s. Real growth in ICT investment has been fuelled by a steady decline in the relative prices of computer components. On the basis of harmonised price indices, constructed using the United States as a benchmark, the rate of decline in the price of computers and office equipment increased from the 1980s to the 1990s, even doubling in some cases.

Employment in the ITC sector also registered fast growth and demand of highly skilled workers was particularly high. Almost all OECD countries registered fast employment growth in the ITC sector. Finland, where employment in ITC activities increased by 48% from 1995 to 1999, leads the structural trend, but also other countries such as Spain and the UK registered double digit growth rates. The U.S. where investment was highest registered a 4.9 growth rate. The book is available for download for free from the OECD website at www.oecd.org.

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