New technologies and productivity
We look at the impact of technology on productivity by focusing on the role of ICT and at Solow's paradox that computers appeared everywhere except the productivity statistics.
The US "productivity miracle" after 1995 was led by the contribution of ICT to capital deepening and total factor productivity growth but this acceleration was not experienced by the economies of the EU despite similar investment. Why? We found the answer lay in the intensity with which ICT is applied to those company operations which would benefit, such as wholesale retail and financial service sectors.
Management practices and non-hierarchical organisational form were found to be crucial enablers of the way technology was put to most productive use: decentralisation of decision making overcomes the uncertainty associated with the implementation of new technology by allowing local level experiment with the best methods for applying it. Our case study of the introduction of a banking technology also illustrates the long time-lag before innovations feed through into productivity. The role of competition from trade also encourages increased investment in ICT and reallocation of employment towards more innovative and technologically advanced firms.
We also explore the human effects of technology introduction. The rapid diffusion of ICT in the 1990s involved a polarisation of employment with the middle of the skill distribution falling relative to the top and bottom. Industries with faster growth of ICT had greater increases in relative demand for highly-educated workers and bigger falls in relative demand for middle-educated workers. The changes in inequality and employment brought about by increasing use of robotics and artificial and machine learning technologies will become a focus of the centre's work.
Featured Work
New technologies and productivity publications
Juliana Oliveira-Cunha, Bruno Serra-Lorenzo and Anna Valero
2 April 2025
Friedrich Geiecke and Xavier Jaravel
20 February 2025
Nuriye Melisa Bilgin, Ester Faia and Gianmarco Ottaviano
31 January 2025
Pia Andres, Carl Benedikt Frey and Giorgio Presidente
5 January 2025
Juliana Oliveira-Cunha, Bruno Serra-Lorenzo and Anna Valero
18 October 2024
James Bessen, Iain Cockburn and Jennifer Hunt
1 October 2024
Robert J.R. Elliott and Viet Nguyen-Tien
2 February 2024
John Van Reenen
13 November 2023
Anna Valero, Sacha Wunsch-Vincent and Bart van Ark
9 November 2023
Robert J.R. Elliott, Gavin Harper, Benjamin Jones and Viet Nguyen-Tien
20 October 2023
Martin Beraja, Andrew Kao, David Y. Yang and Noam Yuchtman
9 October 2023
John Van Reenen
25 September 2023
Leila Doumi, Sagar Goel, Orsolya Kovacs-Ondrejkovic, Raffaella Sadun and Jorge Tamayo
18 August 2023
Robert J.R. Elliott, Gavin Harper, Benjamin Jones and Viet Nguyen-Tien
27 June 2023
Pia Andres, Ralf Martin, Esin Serin, Arjun Shah and Anna Valero
22 June 2023
Antonin Bergeaud and Cyril Verluise
21 February 2023
Chiara Criscuolo and Guy Lalanne
17 January 2023
Antonin Bergeaud and Cyril Verluise
23 November 2022
Philippe Aghion, Lena Boneva, Johannes Breckenfelder, Luc Laeven, Conny Olovsson, Alexander Popov and Elena Rancoita
15 November 2022
Ralph De Haas, Ralf Martin, Mirabelle Muûls and Helena Schweiger
1 November 2022
Philippe Aghion, Celine Antonin, Simon Bunel and Xavier Jaravel
13 June 2022
Brendan Curran, Ralf Martin, Sabrina Muller, Viet Nguyen-Tien, Juliana Oliveira-Cunha, Esin Serin, Arjun Shah, Anna Valero and Dennis Verhoeven
23 May 2022