Traditional and New ICT Spending and Its Impact on Economy

ABSTRACT

This paper presents the research of the new technologies’ impact on information and communication technology (ICT) spending and economy. We found that new technologies drive demand for ICT on general, while individual ICT segments’ shares changed significantly due to development of the field and due to different stages of maturity process (diffusion) of individual ICT segments. New technologies also have impact on the longer-lasting growth of spending for traditional ICTs, as new technologies cannot be used and exploited without being connected to (and supported by) traditional ICTs. Moreover, considering traditional and total ICT spending, productivity of workers follows the same trend and consequently ICT spending has immediate impact on labor productivity, but this is not detected in relation to new ICTs’ spending. Gross domestic product growth also stimulates only traditional and total ICT spending, having strong positive impact on increased ICT spending in the same year.

KEYWORDS:

• ICT spending
• traditional ICTs
• new technologies
• diffusion of innovations
• economic growth

Notes

¹ Life span or lifetime of ICT equipment is defined by the length of time in which the equipment functions. But there is distinction among functioning in the recommended period of up to 2–5 years, depending on the type of ICT equipment, and functioning in the period after, when the equipment is considered as obsolete.

² IDC (International Data Corporation), an international company, founded in 1964, analyses global, regional and national ICT spending.

³ Data provided by IDC on ICT spending actually provides the value that was paid by purchasers/consumers of IT equipment (hardware and software), IT services or Telecom services. IDC data provide very detailed overview on annual (partially also quarterly) ICT spending (e.g., for PCs detailed to each individual model sold).

⁴ In general, investment refers to any action (putting money, effort, time, etc.) that is taken to raise future revenue or get an advantage. In this sense ICT investment includes ICT spending, but it includes also other associated costs (of repairs, maintenance, education, work, etc.), so that ICT can provide better financial or competitive outcome.

⁵ An international dollar would buy in the cited country a comparable amount of goods and services a U.S. dollar would buy in the United States. This term is often used in conjunction with Purchasing Power Parity (PPP) data.