Productivity is the cornerstone of


economic growth


In Europe today, low economic growth and the international financial crisis are clouding the outlook for all companies. Now, more than ever, improving productivity and competitiveness is the only possible growth strategy.


ICT is a fundamental driver of productivity improvements – it helps every business improve efficiency, cut costs, increase output, and compete more effectively in global markets. That is the strategy AT&T supports.


This independent research study from one of the world’s leading economic analysts, Oxford Economics, illustrates the link between ICT and productivity and highlights a number of other factors that contribute to the effective use of ICT.


The aim of the report is to help companies and governments make decisions that will drive business and economic growth. The impact of ICT on productivity has not always been clear.


We know it has an impact, but that impact is uneven, varying widely across industries and countries.


This study provides detailed insight into the relationship between ICT and productivity and demonstrates how technology drives productivity and quantifies gains that can be made from technology in the future. The research shows that productivity improvements account for up to one third of returns on ICT investments.


The report highlights the other investments that businesses need to make alongside ICT to make it effective. It also examines the role of governments and explores the optimal regulatory framework to allow ICT investments to pay off.


The report shows that, by raising its ICT investment, Europe could reap an “ICT Dividend” of productivity growth.


If, by 2020, Europe could build its ICT capital stock to the same level (relative to the size of the economy) as the US, the level of GDP would increase by 5 percent for the EU as a whole. This is equivalent to about €760 billion at today’s prices, or around €1,500 per person. For some countries currently experiencing sluggish growth, such as Spain and Italy, the impact on national GDP could be closer to 7 percent, or €50 billion per country at today’s prices.


Productivity improvements directly related to these investments account for one third of the gains – 1.5 percentage points of the 5 percent improvement.


These productivity gains are worth about €220 billion in this scenario. This is what we call the “ICT Dividend”


Government policy influences the pace and effectiveness of ICT development.


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