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Intellectual property, technology and productivity

Information and communication technologies (ICT) and productivity

(John Van Reenen|, Nick Bloom)

The project will examine the direct impact of ICT on productivity and whether this relationship varies by firm size, ownership, industry, region and time. It will also examine 'complementarities' between IT, skills and innovation. For example, does IT have a larger impact on productivity in environments where workers are more skilled?

We are building a panel of ICT information on many thousands of UK firms between 1994 and 2004, covering all sectors of the economy and all sizes of company. This will give us information on the productivity, profitability and market value of our firms. We will combine this with the management survey to examine whether the returns to ICT are zero or even negative in badly-managed firms.

Finally we examine the determinants of the pattern of ICT diffusion. For example, what role, if any, has the tax system played in the introduction of new technologies? What other policies (such as broadband roll-out) are important?

ICT in the public sector: schools

(Stephen Machin, Sandra McNally)

This project will examine whether and how the use of ICT in schools leads to an increase in educational attainment. The technology skills gap among adults is wider than that of basic literacy and numeracy, with about 24 million people unable to use the internet compared to seven million people who have poor reading and writing skills. Yet about 75% of the workforce use computers as part of their job. Faced with this potential skills shortage, the government doubled ICT school expenditure between 1998 and 2002; all schools now have internet access and ICT teaching has been integrated into all aspects of the curriculum.

It is important to consider the cost-effectiveness of this investment by considering the educational benefits of ICT inputs. Do these operate through students acquiring ICT skills or by teachers using the technology to enhance learning across the curriculum? The research will examine the relationship between ICT investment and pupils' educational attainment after taking account of the fact that both investment and attainment may be driven by attributes of schools that are difficult to measure or not fully observable. For example maybe better-performing schools invested more in ICT in the first place, or had better qualified teachers. We will address the causality problem by using a change in the way ICT expenditure was allocated to local education authorities (LEAs) in April 2000 (from a discretionary-based system to a rule-based system). Variation in the extent to which LEAs (and therefore schools) gained from this change provides exogenous variation in ICT expenditure within schools.

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