Coevolving Innovations

… in Business Organizations and Information Technologies

ICT capital and the services sector in OECD reports

I happened to be looking at the 2007 OECD Science, Technology and Industry Scorecard, and noticed a chart on “Growth Accounts for OECD Countries”. I’ve never thought of a breakdown this way, so I was intrigued by the legend.

2007_OECD_ScienceTechnologyIndustryScoreboard_legend.jpg

We naturally think of labour inputs, and capital inputs, but I didn’t realize that there were statistics that break out ICT capital (in blue) from non-ICT capital (in orange). Information and Communications Technologies (ICT) isn’t something that Karl Marx specifically thought about. The OECD reports acknowledges that breaking economic growth down into factors of production is tricky thing.

Economic growth can be increased by increasing the amount and types of labour and capital used in production, and by attaining greater overall efficiency in how these factors of production are used together, i.e. higher multifactor productivity. Growth accounting involves breaking down growth of GDP into the contribution of labour input, capital input and MFP. The growth accounting model is based on the microeconomic theory of production and rests on a number of assumptions ….1

Assuming that we really can break down factors contributing to growth by labour, ICT capital, and non-ICT capital — as well as some multi-factor productivity that can’t be broken down — what does it look like? Look at the blue bar in the view of the G7 countries …

Contributions to GDP growth, G7 countries, 1995-2000 and 2000-05
(percentage points)

2007_OECD_ScienceTechnologyIndustryScoreboard_G7.jpg

… and a view of all OECD countries …

Contributions to GDP growth, OECD countries, 1995-2005
(percentage points)

2007_OECD_ScienceTechnologyIndustryScoreboard_OECD.jpg

Without squinting to make out all of the details, ICT capital (in blue) represents a non-insignificant contribution to growth.

In trying to understand what ICT capital was about, I referred back to a 2000 OECD report on A New Economy? that seems to be a foundation for the focus on ICT.

Investment in ICT is making an important contribution to growth and labour productivity growth across the OECD. The 1990s witnessed rapid accumulation of ICT equipment. In the G7 countries (and most likely in other OECD countries as well) ICT investment progressed at two-digit figures over the past two decades and accounted for 10-20% of total non-residential investment in the business sector. However, while computers seem to be everywhere, use of ICT is actually concentrated in the services sector and a few manufacturing sectors.2

The relationship between ICT, the services sector, and innovation is underscored a little further down.

The services sector is by far the main purchaser of ICT equipment and its performance has been particularly affected by the take-up of ICT. Services sectors such as finance and business services lead in investment in ICT and many services are now highly innovative. Moreover, services have become more tradable, with the result that they are more exposed to competition and are led to innovate to improve the quality of service offered and therefore remain or become competitive.3

In the context of Services Science, Management and Engineering, ICT isn’t the only factor in services, but it is a significant factor that wasn’t on anyone’s chart 25 years ago.


1OECD Science, Technology and Industry Scoreboard 2007: Innovation and performance in the Global Economy, p. 206, available from oecd.org.

2A New Economy? The Changing Role of Innovation and Information Technology in Growth, OECD, 2000, p. 10, available from oecd.org.

3A New Economy, p. 11.

  • RSS qoto.org/@daviding (Mastodon)

  • RSS on IngBrief

    • 1969, 1981 Emery, System Thinking: Selected Readings
      Social Systems Science graduate students in 1970s-1980s with #RussellAckoff, #EricTrist + #HasanOzbehkhan at U. Pennsylvania Wharton School were assigned the Penguin paperback #SystemsThinking reader edited by #FredEEmery, with updated editions evolving contents.
    • 1968 Buckley, “Modern Systems Research for the Behavioral Scientist: A Sourcebook”
      Resurfacing 1968 Buckley, “Modern Systems Research for the Behavioral Scientist: A Sourcebook” for interests in #SystemsThinking #SocioCybernetics #GeneralSystemsTheory #OrganizationScience . Republication in 2017 hardcopy may be more complete.
    • Wholism, reductionism (Francois, 2004)
      Proponents of #SystemsThinking often espouse holism to counter over-emphasis on reductionism. Reading some definitions from an encyclopedia positions one in the context of the other (François 2004).
    • It matters (word use)
      Saying “it doesn’t matter” or “it matters” is a common expression in everyday English. For scholarly work, I want to “keep using that word“, while ensuring it means what I want it to mean. The Oxford English Dictionary (third edition, March 2001) has three entries for “matter”. The first two entries for a noun. The […]
    • Systemic Change, Systematic Change, Systems Change (Reynolds, 2011)
      It's been challenging to find sources that specifically define two-word phrases -- i.e. "systemic change", "systematic change", "systems change" -- as opposed to loosely inferring reductively from one-word definitions in recombination. MartinReynolds @OpenUniversity clarifies uses of the phrases, with a critical eye into motives for choosing a specific label, as well as associated risks and […]
    • Environmental c.f. ecological (Francois, 2004; Allen, Giampietro Little 2003)
      The term "environmental" can be mixed up with "ecological", when the meanings are different. We can look at the encyclopedia definitions (François 2004), and then compare the two in terms of applied science (i.e. engineering with (#TimothyFHAllen @MarioGiampietro and #AmandaMLittle, 2003).
  • Recent Posts

  • Archives

  • RSS on daviding.com

    • 2020/11 Moments November 2020
      Day shortening and temperatures dropping meant bundling up for bicycling.
    • 2020/10 Moments October 2020
      Clear autumn near home in Toronto, extended with a family vacation within Canada to Vancouver, where the Covid rates are more favourable
    • 2020/09 Moments September 2020
      Discovering more of the neighbourhood, bicycling mostly in the mornings.
    • 2020/08 Moments August 2020
      Moderate summer temperatures in a city normally overheated with activity, residents gradually emerging as public venues opened cautiously.
    • 2020/07 Moments July 2020
      Daytimes full of new work assignment and training, evenings and weekends bicycling around downtown Toronto as it slowly reopens from pandemic.
    • 2020/06 Moments June 2020
      Most of month in Covid-19 shutdown Phase 1, so every photograph is an exterior shot. Bicycling around downtown Toronto, often exercising after sunset.
  • RSS on Media Queue

  • Meta

  • Creative Commons License
    This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License
    Theme modified from DevDmBootstrap4 by Danny Machal