According to a report by the Information Technology & Innovation Foundation, IT adds $2 trillion dollars annually to the US economy, and "is responsible for nearly all of the pickup in economic growth over the last decade." The ITIF's report, entitled Digital Prosperity: Understanding the Economic Benefits of the Information Technology Revolution, marks the integration of IT tools into widespread aspects of the economy.
Produced by the Information Technology & Innovation Foundation (ITIF), the report says the growth is not only attributable to booming Silicon Valley industries but also the integration of IT into widespread sectors of the economy.
The economic effects of IT are a combination of the productivity growth of IT companies with the productivity attributable to IT in other sectors from agriculture to manufacturing, demonstrating that technological progress is in a large part responsible for reversing a 20-year slowdown in productivity from the mid-1970s to the mid-1990s, as well as two-thirds of total productivity growth in the U.S. between 1995 and 2002.
"We need to recognize this phenomenon and adjust our thinking to make IT a centerpiece of our economic policy -- from planning and forecasting to tax policies that incent future growth," said ITIF president Robert Atkinson. "Policies to support digital transformation need to become the fourth leg of economic policy alongside fiscal, monetary and investment policy."
The report also recommends that policymakers encourage digital innovation and support research in emerging IT areas through enlightened tax policies and digital literacy initiatives.
While IT's productivity impact is the highest in the US, most other nations have benefited from the IT revolution as well. For example, China's IT usage was responsible for 38% of total productivity growth and 21% of GDP growth.
To download a copy of the report (4MB .pdf), go to: http://www.itif.org/files/digital_prosperity.pdf
Source: Information Technology & Innovation Foundation
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