1. 1 Information and Communication Technologies (ICT) and the Transformation of the Economy Andrew Wyckoff and Dirk Pilat Organisation for Economic Co-operation and Development Paris, France US Department of Commerce Transforming Enterprise Conference Washington, DC 27 January 2003

2. 2 Diffusion of ICT Drawn from “Measuring the Information Economy” 2002 www.oecd.org/sti/measuring-infoeconomy

3. 3 ICT investment has been uneven

4. 4 Recent ICT Investment: US Source:US BEA, NIPA Tables. Contributions to % change in quarterly real private fixed investment by type

5. 5 Business Access to and Use of the Internet

6. 6 Explaining differences in ICT diffusion and use across the OECD

7. 7 Skills: The availability of high-skilled workers is associated with higher investment in ICT

8. 8 Regulations: Employment protection legislation may limit required organisational change

9. 9 Co-invention: ICT investment is accompanied by further innovation in applications and software

10. 10 3 Perspectives on the impacts of ICT on performance – Macroeconomic contribution of ICT investment to Output Growth; – Industry Improvement of Labour Productivity; – Competitive gains by individual firms.

11. 11 Contribution of ICT investment to business GDP

12. 12 24 Contribution to Productivity by ICT- Producing Manuf.

13. 13 Contribution to Productivity by ICT- using services

14. 14 Micro-data Analysis

15. 15 Firm-level Canada Source: Baldwin & Sabourin, 2002

16. 16 The sophistication of e-activity increases with experience in ICT use: UK Source: Clayton & Waldron, 2002

17. 17 The impacts of ICT differ across OECD countries Source: Haltiwanger, Jarimin & Schank, 2002.

18. 18 Stylised Facts Emerging from OECD Microdata Consortia Human Capital Industrial Structure Organisational Change Ownership Change Innovation

19. 19 Policy implications The business environment matters… …in particular, the level and nature of competition. Investing in ICT is much more than hardware. It involves a constellation of complimentary investments. ICT is both a tool for innovation.