1. 1 Better Understanding the Role of Software in the Information Economy: A Preliminary Overview of Research, Policy and Measurement Challenges “Transforming Enterprise and Beyond: Connecting Research and Policy in the Digital Economy” Post Conference Workshop National Science Foundation, 29 January 2003 Andrew W. Wyckoff and Nadim Ahmad OECD, Paris France

2. 2 ICT an important factor of Growth during the 1990s Jorgenson, Oliner & Sichel, vanArk, Stiroh, Gordon...OECD growing part of investment growing contribution to output growth / productivity

3. 3 Recent ICT Investment: US Contributions to % change in US private fixed investment Source:US Bureau of Economic Analysis (BEA), NIPA tables.

4. 4 Recent Investment in Software As a % of total private fixed investment Source:US Bureau of Economic Analysis (BEA), NIPA tables.

5. 5 Recent ICT Investment: NLD As a % of total private fixed investment Source:OECD Quarterly National Accounts (QNA) database.

6. 6 Why the jump after 1995? Myriad of explanations software / protocol innovations tend to be overlooked need better resolution in general, software as a case study

7. 7 Policy Importance of Software Use Policies Services ICT literacy Supply Policies Competition Human capital Integrity S&T

8. 8 Software as Investment in the National Accounts “Computer software that an enterprise expects to use in production for more than one year is treated as an intangible fixed asset.” ¶ 10.92 and 10.93 of the 1993 edition of SNA

9. 9 Measuring Software in the SNA Pre-packaged / reproduced own account (in-house) customised (made-to-order)

10. 10 Software investment % of GDP

11. 11 Practical and Conceptual Problems =/ Supply Demand

12. 12 Practical and Conceptual Problems Differentiating between: –intermediate expenditures (- 1 year) and –capital expenditures (+ 1 year).

13. 13 Investment to Expenditure Ratios

14. 14 Practical and Conceptual Problems Measuring Imports of an Intangible

15. 15 Royalties Paid on Imports as a % of Imports of Software

16. 16 Practical and Conceptual Problems Measuring Own-Account (in-house)

17. 17 Practical and Conceptual Problems Accounting for changes (quality & price) over time

18. 18 Software Price Indices

19. 19 Practical 1st Steps Disaggregate ICT Need to better differentiate software via improved investment surveys Need to get to business accounting systems & standards

20. 20 Longer-term Conceptual Issues improved typology how to value investments that you paid for but don’t own how to value capital services from an investment you did not pay for how to capture changes in the quality of a product over time where the objective measure of utility is difficult to ascertain