information technology and the productivity expansion
TRANSCRIPT
Information Technology and the Productivity Expansion
http://post.economics.harvard.edu/faculty/jorgenson/
By
Dale W. Jorgenson, Mun S. Ho, and Jon D. Samuels
Harvard University, Resources for the Future, Johns Hopkins University
Information Technology and the Productivity Expansion
What’s New?70 NAICS Industries Covering 1960-2007
After the CrashThe IT Boom, the Dot-Com Crash, and the Recovery
WORLD KLEMS ProjectEstablished at Harvard on
August 19-20, 2010
Established: August 19-20, 2010
41 Economies:U.S., Australia. Canada, Japan, and Korea
27 Economies of the EU
Argentina, Brazil, Chile, and Mexico
China, India, Indonesia, Turkey, and Taiwan
WORLD KLEMS PROJECT
Country Data Bases:Labor, Capital, Energy, Materials and Services
IT-Producing Industries
IT-Using Industries
Computer and peripheral equipment manufacturing Communications equipment manufacturing Semiconductor and other electronic component manufacturing Software publishing Information and data processing services Computer systems design and related services
Construction MachineryMotor vehicles bodies and trailers and parts Other transportation equipment Miscellaneous manufacturing Printing and related support activities Wholesale Trade Retail Trade Air transportation Water transportation Truck transportation Transit and ground passenger transportation Pipeline transportation Other transportation and support activities Broadcasting and telecommunications
Federal Reserve banks credit intermediation and related activitiesSecurities commodity contracts and investments Insurance carriers and related activities Rental and leasing services and lessors of intangible assetsLegal servicesMiscellaneous professional scientific and technical services Management of companies and enterprises Administrative and support services Waste management and remediation services Educational services Hospitals Nursing and residential care facilitiesSocial assistance Performing arts spectator sports museums and related activities Other electronic productsNewspaper; periodical; book publishers
IT-RELATED INDUSTRIES
FarmsForestry fishing and related activities Oil and gas extraction Mining except oil and gas Support activities for mining Utilities Wood products Nonmetallic mineral products Primary metalsFabricated metal products Electrical equipment appliances and components Furniture and related products Food and beverage and tobacco products Textile mills and textile product mills Apparel and leather and allied products Paper products Petroleum and coal products
Chemical productsPlastics and rubber products Rail transportation Warehousing and storage Motion picture and sound recording industries Funds trusts and other financial vehicles Ambulatory health care servicesAmusements gambling and recreation industries Accommodation Food services and drinking places Other services except government Federal General governmentFederal Government enterprises S&L General GovernmentS&L Government enterprises Real estateHousehold
NON-IT INDUSTRIES
ROLE OF INFORMATION TECHNOLOGY:Growth of Output
OUTPUT CONTRIBUTION BY TYPE:Computers, Communications Equipment, Semiconductors, Software, Information and data processing services, Computer systems design and related services
OUTPUT SHARES OF IT:Computers, Communications Equipment, Semiconductors, Software, Information and data processing services, Computer systems design and related services
OUTPUT CONTRIBUTION OF IT:IT-Producing, IT-Using, and Non-IT Value Added
0.1
1
10
100
1000
Log
Scal
e (2
000=
1)
Information and data processing services Computer systems design and related services
Computer and peripheral equipment manufacturing Communications equipment manufacturing
Semiconductor and other electronic component manufacturing Software publishing
Relative Prices of IT Industry Output, 1960-2007
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Information and data processing services Computer systems design and related servicesComputer and peripheral equipment manufacturing Communications equipment manufacturingSemiconductor and other electronic component manufacturing Software publishingTotal IT
Value Added Shares of Information Technology by Type, 1960-2007 Share of Current Dollar Value Added.
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1960-1995 1995-2000 2000-2007
Ann
ual C
ontr
ibut
ion
(%)
Information and data processing services Computer systems design and related services
Computer and peripheral equipment manufacturing Communications equipment manufacturing
Semiconductor and other electronic component manufacturing Software publishing
Industry Contributions to Value Added GrowthValue added weighted contributions of industry value added.
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
1960-1995 1995-2000 2000-2007
Ann
ual C
ontr
ibut
ion
(%)
Non-IT Industries IT-Using Industries IT-Producing Industries
Industry Contributions to Value Added GrowthValue added weighted contributions of industry value added.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1960-1995 1995-2000 2000-2007
Ann
ual G
row
th (%
)Comparison of Production Possibility Frontier and Aggregate Production Function
Aggregate Production Function Value-Added Aggregate Production Possibility Frontier Value-Added
GROWTH IN THE NEW MILLENNIUM: IT Investment and Productivity Growth
AVERAGE LABOR PRODUCTIVITY GROWTH:
Capital Deepening, Labor Quality, TFP
TOTAL FACTOR PRODUCTIVITY:
IT-Producing, IT-Using, and Non-IT Production
SOURCES OF U.S. ECONOMIC GROWTH:
Capital Input, Labor Input, and TFP
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
1960-1995 1995-2000 2000-2007
Non-IT Industries IT-Using Industries IT-Producing Industries
Industry Contributions to Productivity GrowthDomar weighted productivity.
-0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2
ConstructionWholesale Trade
Management of companies and enterprisesRental and leasing services and lessors of intangible assets
Educational servicesWaste management and remediation services
Performing arts spectator sports museums and related…Other electronic products
Water transportationTruck transportation
Pipeline transportationMachinery
Other transportation and support activitiesTransit and ground passenger transportation
Printing and related support activitiesLegal services
Miscellaneous manufacturingHospitals Nursing and residential care facilities
Social assistanceAir transportation
Other transportation equipmentNewspaper; periodical; book publishersInsurance carriers and related activities
Motor vehicles bodies and trailers and partsAdministrative and support services
Broadcasting and telecommunicationsSecurities commodity contracts and investments
Federal Reserve banks credit intermediation and related…Miscellaneous professional scientific and technical services
Retail Trade
Change in Contribution to Productivity: 2000-2007 less 1960-1995: IT Users
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
1960-1995 1995-2000 2000-2007
Ann
ual C
ontr
ibut
ion
(%)
IT-Producing Industries IT-Using Industries Non-IT Industries Reallocation of Capital Input Reallocation of Labor Input
Sources of Aggregate TFP Growth
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
1960-1995 1995-2000 2000-2007
Ann
ual C
ontr
ibut
ion
(%)
Non-college Labor College Labor Non-IT Capital IT Capital Aggregate TFP
Sources of U.S. Economic Growth
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
1960-1995 1995-2000 2000-2007
Ann
ual C
ontr
ibut
ion
(%)
Reallocation of Hours Non-college Labor Quality College Labor Quality
Non-IT Capital Deepening IT Capital Deepening Aggregate TFP
Sources of U.S. Labor Productivity Growth
GROWTH AT THE INDUSTRY LEVEL: Value Added and Productivity Growth
CHANGE IN PRODUCTIVITY GROWTH:
IT-Using Industries
VALUE ADDED GROWTH:
IT-Producing Industries
PRODUCTIVITY GROWTH:
IT-Producing Industries
Industry Contributions to Value Added Growth, 1960-2007
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
Other transportation and support…Federal General governmentPlastics and rubber products
AccommodationFood and beverage and tobacco products
Fabricated metal productsUtilities
Food services and drinking placesConstruction
Air transportationRental and leasing services and lessors…Hospitals Nursing and residential care…
Truck transportationFarms
Other services except governmentMotor vehicles bodies and trailers and…Computer systems design and related…
Management of companies and…Software publishing
Chemical productsInsurance carriers and related activities
MachineryAdministrative and support services
Ambulatory health care servicesFederal Reserve banks credit…
Computer and peripheral equipment…Securities commodity contracts and…
Semiconductor and other electronic…Broadcasting and telecommunicationsMiscellaneous professional scientific…
S&L General GovernmentReal estate
Retail TradeWholesale Trade
Household
-0.2 0 0.2 0.4 0.6 0.8
Oil and gas extractionPrimary metals
Funds trusts and other financial…Transit and ground passenger…Newspaper; periodical; book…
Rail transportationPipeline transportation
Support activities for miningWater transportation
Wood productsApparel and leather and allied…
Forestry fishing and related…Waste management and…
Federal Government enterprisesMotion picture and sound…
Petroleum and coal productsMining except oil and gas
Furniture and related productsNonmetallic mineral products
Performing arts spectator sports…Communications equipment…
Warehousing and storagePrinting and related support activities
S&L Government enterprisesPaper products
Amusements gambling and…Other transportation equipment
Social assistanceEducational services
Textile mills and textile product millsInformation and data processing…Electrical equipment appliances…
Miscellaneous manufacturingOther electronic products
Legal services
Industry Contributions to Productivity Growth, 1960-2007Domar weighted contribution
0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16
Chemical productsPipeline transportation
Food services and drinking placesWaste management and remediation services
Water transportationSocial assistance
Furniture and related productsPetroleum and coal products
Other transportation equipmentCommunications equipment manufacturing
Warehousing and storageFood and beverage and tobacco productsInformation and data processing services
AccommodationPlastics and rubber products
Other transportation and support activitiesFabricated metal products
Miscellaneous professional scientific and…Other electronic products
Miscellaneous manufacturingMachinery
Federal General governmentTruck transportation
Motor vehicles bodies and trailers and partsRail transportationAir transportation
Textile mills and textile product millsSoftware publishing
Broadcasting and telecommunicationsFarms
Securities commodity contracts and investmentsComputer and peripheral equipment…Semiconductor and other electronic…
Retail TradeWholesale Trade
-0.09 -0.04 0.01 0.06 0.11 0.16
ConstructionFederal Reserve banks…
Real estateOil and gas extractionHospitals Nursing and…
Rental and leasing services…Ambulatory health care…
UtilitiesLegal services
Newspaper; periodical;…S&L General Government
Other services except…Insurance carriers and…
Funds trusts and other…S&L Government enterprises
Management of companies…Primary metals
Educational servicesForestry fishing and…
Transit and ground…Computer systems design…
Support activities for miningFederal Government…
Wood productsHousehold
Amusements gambling and…Motion picture and sound…
Printing and related support…Administrative and support…
Performing arts spectator…Paper products
Nonmetallic mineral productsApparel and leather and…
Mining except oil and gasElectrical equipment…
IT PRODUCTION:Permanent vs. Transitory Changes
IT UTILIZATION:Trade and Services to the Forefront
TANGIBLE AND INTANGIBLE ASSETS: Beyond Software and R&D
IMPLICATIONS FOR MACROECONOMICS: Retire the Aggregate Production Function?
THE NEW RESEARCH AGENDA: Economics on Internet Time