New Economy, Productivity and Growth

Abstract

The widespread use of computers and the Internet since the early 1990s has affected the world economies on all fronts by improving production methods and changing consumer behaviour. To reflect these changes, the term ‘new economy’ has emerged and it often refers to an economy that is characterized by increased investment in, and use of, information and communications technology (ICT).¹ While various studies have shown ICT to be instrumental in propelling productivity and economic growth in the developed countries, there has been little research on China, despite the giant developing economy having one of the world’s largest ICT markets and a rapidly growing ICT infrastructure (Wong, 2007). Chapters 4 and 5 will add to the literature by focusing on China. This chapter examines the relationship between ICT, productivity and economic growth. Given China’s current stage of economic development, it will be interesting to find out how this country is similar to or different from the advanced economies with regard to the contribution of ICT to productivity and economic growth.