ICT and Non-ICT Capital Services in Italy

Abstract

There is now a large consensus that both the production and the use of Information and Communication Technology (ICT) have contributed substantially to the aggregate productivity revival in the United States in the late 1990s. The technological revolution has now involved also Italy; therefore it is fundamental to quantify the impact of on the Italian production system. The growth-accounting framework is widely used to deal with such issues. To develop this kind of analysis it is crucial to have a measure of the flow of capital services provided by capital goods. In this paper, referring to the standard neoclassical approach to capital services measurement, we calculate the productive capital stock, the flow of capital services provided by and non-ICT capital goods and their contributions to the growth of total capital services. We provide the estimate of productive capital stocks for a detailed asset-type classification system and we report both aggregate and industry level results for the Italian economy in the last twenty years. We find that even if Italian investment expenditure grew at a considerable pace in the last twenty years, its growth it is still small if compared with total investment expenditure. However, our results show that its contribution to the growth of total capital input is not negligible when capital input is measured in terms of flow of capital services. Our results in terms of productive capital stock partially confirm the importance of capital accumulation for capital input growth in Italy in the second half of the 90s with respect to 1980-95 time period. Our findings are that in terms of contribution to the growth of total capital services, the 80's were as much ICT oriented as the 90's.