The Creation of Economic and Corporate Wealth in a Dynamic Economy Is the Productivity Slowdown in the US and the Acceleration in the Euro Area Structural or Cyclical? By Dale W. Jorgenson Harvard University January 16, 2008 http://www.economics.harvard.edu/faculty/jorgenson
EU KLEMS PROJECT INTERMEDIATE RELEASE: November 6, 2007 25 EU ECONOMIES: U.S., Australia, Canada, Japan, and Korea U.S. DATA SOURCES: Labor, Capital, and Intermediate Inputs COMPLETION DATE: June 30, 2008
INFORMATION TECHNOLOGY AND THE AMERICAN GROWTH RESURGENCE AFTER THE CRASH: The IT Boom, the Dot-Com Crash, and the Jobless Recovery WHAT S NEW? 85 Industries Covering 1960-2005 DATA SOURCES: Labor, Capital, and Intermediate Input THE NEW AGENDA: Trade and Services to the Fore
IT-RELATED INDUSTRIES IT-PRODUCING INDUSTRIES Communications Equipment Computer services Computers & Office Equipment Electronic Components IT-USING INDUSTRIES Audio and video equip Insulated wire Other Electrical machinery Aerospace Air transport. Business svc exc computer Educational services (private) Gas utilities Insurance carriers, ins agents, services Legal services Machinery excl computers Measuring instruments Medical equipment and opthalmic goods Misc professional services Misc repair Motion pictures Nondeposit; Sec-com brokers;inves Other Instruments Other Transportation equipment Printing and reproduction Publishing Radio and TV Research Ships and boats Social svc and membership org Telephone and telegraph Transportation svcs & Pipelines Wholesale trade
NON-IT INDUSTRIES Agri services, forestry Apparel Auto services Chemicals excl drugs Coal mining Construction Depository Inst Drugs Eating and drinking Electric utilities (pvt) Fabricated metal prd Farms Fishing Food Furniture and fixtures Government Health services, nec Hospitals, private Hotels Leather Local passenger transit Lumber and wood Metal mining Misc manufacturing Motor vehicles Nonmetal mining Nonmetallic mineral products Nursing and personal care facilities Offices of health practitioners Oil and gas extraction Paper and allied Personal services Petroleum and coal products Primary metals Railroad transportation Real Estate- other Recreation services Retail trade exc motor veh Retail trade; motor vehicles Rubber and misc plastics Textile Tobacco Trucking and warehousing Water and sanitation Water transport.
ROLE OF INFORMATION TECHNOLOGY: Growth of Output OUTPUT SHARES OF IT: Computers, Communications Equipment, Semiconductors, and Software OUTPUT CONTRIBUTION BY TYPE: Computers, Communications Equipment, Semiconductors, and Software OUTPUT CONTRIBUTION OF IT: IT-Producing, IT-Using, and Non-IT Value Added
Relative Prices of Computers, Communications, Semiconductors, and Software and Computer Services Industry Output, 1960-2005 1000 100 Log Scale (2000=1) 10 1 0.1 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Computers Communications Equipment Electronic Components Software and Computer Services
4.0 Value Added Shares of Information Technology by Type, 1960-2005 Share of Current Dollar GDP. 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Computers Communications Equipment Electronic Components Software and Computer Services Total IT
0.8 Industry Contributions to Value Added Value added weighted contributions of industry value added. 0.7 0.6 Annual Contribution (%) 0.5 0.4 0.3 0.2 0.1 0-0.1 1960-1995 Computers Communications Equipment Electronic Components Software and Computer Services
4.50 Industry Contributions to Value Added Growth Value added weighted contributions of industry value added. 4.00 3.50 Annual Contribution (%) 3.00 2.50 2.00 1.50 1.00 0.50 0.00 1960-1995 Non-IT Industries IT-Using Industries IT-Producing Industries
GROWTH IN THE NEW MILLENNIUM: IT Investment and Productivity Growth TOTAL FACTOR PRODUCTIVITY: IT-Producing, IT-Using, and Non-IT Production SOURCES OF U.S. ECONOMIC GROWTH: Capital Input, Labor Input, and TFP AVERAGE LABOR PRODUCTIVITY GROWTH: Capital Deepening, Labor Quality, TFP
1.60 Industry Contributions to Productivity Growth Domar weighted productivity. 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00-0.20 1960-1995 Non-IT Industries IT-Using Industries IT-Producing Industries
Change in Contribution to Productivity: less 1960-1995 IT-Users Telephone and telegraph Business svc exc computer Insurance carriers, ins agents, services Air transport. Social svc and membership org Misc professional services Wholesale trade Radio and TV Machinery excl computers Medical equipment and opthalmic goods Measuring instruments Aerospace Publishing Gas utilities Audio and video equip Legal services Ships and boats Educational services (private) Other Electrical machinery Transportation svcs & Pipelines Other Transportation equipment Printing and reproduction Other Instruments Misc repair Insulated wire Research Motion pictures Nondeposit; Sec-com brokers;inves -0.15-0.1-0.05 0 0.05 0.1 0.15 0.2
4.50 Sources of U.S. Economic Growth 4.00 3.50 3.00 Annual Contribution (%) 2.50 2.00 1.50 1.00 0.50 0.00-0.50 1960-1995 Non-college Labor College Labor Non-IT Capital IT Capital Aggregate TFP
3.50 Sources of U.S. Labor Productivity Growth 3.00 2.50 Annual Contribution (%) 2.00 1.50 1.00 0.50 0.00-0.50 1960-1995 Reallocation of Hours Non-college Labor Quality College Labor Quality Non-IT Capital Deepening IT Capital Deepening Aggregate TFP
8.00 6.00 4.00 2.00 0.00-2.00-4.00-6.00-8.00 Sources of Growth by Country: World and Regions Annual Contribution (%) World G7 Developing Asia Non-G7 Latin America Eastern Europe Sub-Saharan Africa Hours Quality Non-IT Capital IT Capital TFP N. Af rica & M. East
5.00 4.00 3.00 2.00 1.00 0.00-1.00-2.00 Sources of Growth by Country: G7 Annual Contribution (%) US Canada UK France Germany Italy Japan Hours Quality Non-IT Capital IT Capital TFP
10.00 5.00 0.00-5.00-10.00 Sources of Growth by Country: Developing and Transition Economies Annual Contribution (%) South Korea Brazil China India Indonesia Mexico Russian Federation Hours Quality Non-IT Capital IT Capital TFP
THE NEW AGENDA: IT PRODUCTION: Permanent vs. Transitory Changes IT UTILIZATION: Trade and Services to the Fore THE OUTLOOK: Potential for Growth Unchanged THE U.S. AND THE WORLD ECONOMY: Where Do We Stand?