Skills, Technology and Growth: Is ICT the Key to Success?

Abstract

This paper aims at assessing the contribution of ICT to growth in France at the macro-level. On the labour side, we also evidence the role played by hours worked by stressing the contributions of various factors to the labour quality and the way they intervene in explaining the labour productivity change in the period 1995-00. One of the reasons why France lags behind the U.S. in terms of ICT contribution to growth is that although ICT investment growth is as much sustained in France as in the U.S., the proportion of U.S. ICT investment in total investments is more than twice as high as the French share.In France, the contribution of ICT to the hourly labour productivity growth accelerated quite strongly over 1995-00 relative to the previous period. This acceleration was indeed accompanied by an acceleration in the total factor productivity but not by an increase in the quality of the French labour. The latter has indeed increased regularly till the period 1990-95, namely thanks to the contribution of education. Over the last period, the fall in the quality of French labour is in sync with the rise in hours worked by less well-paid workers and namely young workers. But the latter will accumulate human capital over their lifetime, and will then contribute to improve the labour quality, all the quicker they have graduated in school.