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Impact of ICT Utilization on Innovations and on Labor Productivity: Micro-level Analysis for Poland

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Modeling Innovation Sustainability and Technologies

Part of the book series: Springer Proceedings in Business and Economics ((SPBE))

Abstract

This chapter studies the relationship between innovations, use of Information and Communication Technologies and labor productivity in the Polish enterprises. The research framework takes advantage of the Crepon–Duguet–Mairesse (CDM) model and the new firm paradigm, which focuses on the co-innovative productivity sources. Within this study, factors determining implementation of innovations (product, process-organizational and marketing) are identified and joint impact of innovations, ICT use and complementary factors on labor productivity, are evaluated.

Estimation of the simultaneous discrete choice model revealed that there is complementary relationship between ICT and all types of innovations. We also showed that human capital positively influences product and marketing innovations, while organizational readiness enhances product and process-organizational innovations. These two types of innovations have positive impact on labor productivity in the Polish firms. The results confirm the mediating role of co-innovative productivity sources - ICT alone do not enhance labor productivity, but we recorded productivity gains if ICT were complemented by other mediating factors.

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Notes

  1. 1.

    To illustrate the unprecedented pace of ICT development we may quote the so-called Moore’s Law, according to which the number of transistors that could be placed on a microprocessor is doubling every 2 years (this prediction, which appeared to be true, was formulated by Gordon Moore in 1965). To better understand how fast this development is taking place, Brynjolfsson and Saunders (2010) presented the Moore’s Law in perspective of the aviation industry—it is a story of a commercial flight from New York to Paris, which cost about 900 USD and lasted 7 h in 1978. If the aviation industry has been developing according to Moore’s Law, the same flight in 2010 should cost about 1 penny and take not more than 1 s!

  2. 2.

    In some research approaches innovations are treated as ICT complementarities.

  3. 3.

    The other explanations emphasize the measurement issues, problems of lags, redistribution and dissipation of profits, and mismanagement of ICT (Brynjolfsson and Saunders 2010; Yang and Brynjolfsson 2001; David 2002).

  4. 4.

    For the comprehensive literature review on productivity paradox see (Pilat 2006; Cardona et al. 2013).

  5. 5.

    Szczygielski and Grabowski (2014) analyzed interactions between innovation strategies and productivity in Polish companies. They found negative relation between innovation performance and productivity in the cluster of firms introducing marketing innovations, while in the case of firms adopting innovations, introducing process innovations and market-oriented innovations, positive relationship was reported.

  6. 6.

    However, in most cases the relationship between product and process innovations, and labor productivity was analyzed. This shows, that the choice of productivity measure may influence the results.

  7. 7.

    Their analysis covered service companies in the Madrid area. They emphasized, that impact of ICT (as a GPT) is much greater than just the pure effect of capital input related to ICT investment, because ICT facilitate complementary innovations.

  8. 8.

    CEE region and EU-15 countries are used as a point of reference. CEE region does not include Estonia, Latvia, Lithuania and Croatia as for discussion on the sources of GDP growth due to a lack of data on ICT capital in the Conference Board 2015 database.

  9. 9.

    Even though Revealed Technological Advantage (RTA) in ICT increased in 2009–2011, it was still below OECD median and reference RTA value.

  10. 10.

    According to Summary Innovation Index (SII) methodology, which is based, since 2017, on 27 indicators grouped within 10 dimensions.

  11. 11.

    Polish performance relative to EU average varied between 55% in 2016 and 59% in 2012 and 2014, which supports Weresa’s argument, that no convergence process has been in motion.

  12. 12.

    As a result, total share of companies by type of business is higher than 100.

  13. 13.

    The variable takes on value 0 if two business processes are supported by ICT, 1/7 if three processes are support, 2/7 in the case of supporting four business processes, etc.

  14. 14.

    However, Kijek (2013) showed that product and marketing innovations are complementary, in the sense that product innovations induce marketing innovations. This relationship did not hold for process and marketing innovations, while technological innovations had only limited impact on introduction of marketing innovations in the Polish manufacturing firms.

  15. 15.

    These results are in line with Spiezia’s (2011) findings, arguing ICT is enabling factor especially of product and marketing innovations.

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Acknowledgments

This chapter was prepared within the framework of research project “Impact of Information and Communication Technologies on productivity—macro and micro analysis” at the Department of Economic Policy, University of Lodz, financed by the National Science Centre (contract number DEC-2013/11/B/HS4/00661).

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Authors and Affiliations

  1. Faculty of Economics and Sociology, Department of Economic Policy, University of Lodz, Lodz, Poland

    Lukasz Arendt

  2. Faculty of Economics and Sociology, Department of Econometric Models and Forecasts, University of Lodz, Lodz, Poland

    Wojciech Grabowski

Authors
  1. Lukasz Arendt
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  2. Wojciech Grabowski
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Correspondence to Lukasz Arendt .

Editor information

Editors and Affiliations

  1. Business and Economics, New Atlantic University, Porto Salvo, Portugal

    Albertina Dias

  2. DG Communications Networks, Contents and Technology, European Commission, Brussels, Belgium

    Bror Salmelin

  3. Faculdade de CiĂŞncias e Tecnologia, Universidade Nova de Lisboa, Lisboa, Portugal

    David Pereira

  4. ISCTE-Instituto, Universitario de Lisboa, Lisboa, Portugal

    Miguel Sales Dias

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Arendt, L., Grabowski, W. (2018). Impact of ICT Utilization on Innovations and on Labor Productivity: Micro-level Analysis for Poland. In: Dias, A., Salmelin, B., Pereira, D., Dias, M. (eds) Modeling Innovation Sustainability and Technologies. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-67101-7_17

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