The strong productivity growth of the US and Scandinavian countries in
Europe in the 1990s has raised the question whether the ICT sector -
information and com- munication technology (that is computers plus
telecommunications plus digital services)-is the new driving engine of
high growth in leading OECD countries. Judging by the empirical evidence
for the US, including a new study by McKinsey which gives mixed
evidence, it is still too early to clearly dismiss Robert G. Gordon's
hypothesis that the acceleration of US output growth is (dis- regarding
quality problems of price measurement) exclusively due to cyclical
factors and increased productivity growth in the computer sector. The
counter- hypothesis is associated with research by Stiroh and others who
argue that there are positive productivity spillover effects from ICT to
other sectors. Indeed, it is not clear ex ante whether mainly the Old
Economy or the so-called New Economy stands to benefit most from high
innovation rates and strong productivity shifts associated with the
spreading of digital services. Interestingly, the increased eco- nomic
role of the internet also contributes to the internationalization of the
econ- omy since more services have become tradable, and growing import
competition itself could stimulate productivity growth and thus
contribute to higher growth. If ICT plays a key role in the new economy,
there are important implications in the differential degree to which
Germany and the US have implemented ICT.
