Information And Communication Technology Investment Research Articles

An exploratory study of ICT adoption in the Italian freight transportation industry

PurposeCompanies in the freight transportation industry can currently make use of an increasing number of applications based on Information and Communication Technology (ICT) to improve the performance of their processes. Although these applications have become more widely used in recent years, there is still little research focussing on the actual adoption rate. The present study aims to fill this gap and provide a broad empirical analysis of the use of ICT‐based applications in the freight transportation industry in Italy.Design/methodology/approachThe analysis uses multiple‐case studies. It is based on semi‐structured interviews with the management of leading Italian companies involved in transportation processes.FindingsThe study provides an insight into the current adoption of ICT applications among companies involved in freight transportation activities in Italy. The results point out the most used functions in each application area and the level of integration across these application areas.Research limitations/implicationsThe sample of companies examined in this study was selected by expert assessment, and is biased towards companies willing to provide data and share results. However, the findings provide some interesting results on how and where investments in ICT can be suitable for companies in the logistics and transportation industry.Originality/valueThe paper fulfils an identified need for in‐depth case studies focussing on the adoption level and the implementation process of ICT applications in transportation, and it is of interest to researchers and practitioners in the field of logistics and transportation management.

A multi-criteria game theory and real-options model for irreversible ICT investment decisions

The information and communication technology (ICT) industry is one of the most capital intensive among the high-technology industries. ICT business analysis, especially after the industry deregulation, has become a difficult task. Traditional quantitative cost–benefit analysis concerning investment decisions is by no means sufficient for capturing the complexity of the problem in its entirety. This work combines quantitative and qualitative analyses for modeling competitive interactions between players in the ICT business field. The proposed decision analysis model combines real options, game theory, and analytic hierarchy process for analyzing ICT business alternatives under the threat of competition. The proposed model is applied to a real broadband technology business case, showing how it can be formulated and solved.

Does ICT investment widen the growth gap?

This paper builds a model of cumulative growth to examine the dynamic interdependent relationship between Information and Communication Technology (ICT) investment and economic growth for a sample of 29 countries in the 1990s. We confirm the following facts: First, there is a positive correlation between ICT investment and economic growth. Second, non-ICT investment has as much influence on the growth gap as ICT investment. Third, those countries with a solid economic infrastructure and open trade regime experience more active ICT investments. Fourth, those countries with a comparatively lower productivity level can reduce the gap using knowledge spillovers from more advanced countries. Fifth, reinforcement of patent rights has a positive influence on economic growth by stimulating the accumulation of ICT capital. Finally, ICT investment does not have a strong interdependent relationship with economic growth, while non-ICT investment has a cumulative causal relationship with economic growth and plays a key role in the process of widening the growth gap.

Technical efficiency and use of information and communication technology in Spanish firms

The literature concerned with the relationship between performance and information and communications technology (ICT) is usually focused on the ICT investments. This paper shows that it is the level of use of ICT within organisations, with preference as regards the expenses of ICT, which is responsible for the effect on performance. A general sample of 2255 Spanish companies has been used. Firms’ performance is measured as technical efficiency, which is determined by a data envelopment analysis (DEA), in which special attention is paid to the problem of the outliers. Finally, the analysis of the level of use of ICT is focused on a key area of the organisations, the supply chain, which affects the technical efficiency of the firms analysed. Results show that there is evidence of a positive effect of the use of ICT on technical efficiency. This effect is especially notable at intensive use levels in activities related to operations/manufacturing, purchasing or sales.

The contribution of Information and Communication Technology investments to Greek economic growth: An analytical growth accounting framework

Information and Communication Technology (ICT) investments are the driving force behind the resurgence of growth in the developed countries during recent years. They are also the main reason for the increased growth rates of Total Factor Productivity (TFP). In this paper, we examine whether these relationship also hold for Greece. We use a neoclassical growth accounting model to identify the sources of growth and more specifically the role of ICT investments. We find that the contribution of ICT investments has increased during the period 1988–2003, but that this contribution is still lower than in the United States. During 1996–2003, ICT capital services contributed 0.75 to the total growth rate. We also examine the role of ICT investments at the industry level; we find that ICT investments have most benefited the Finance, Insurance, Real Estate and Business Services industries, and the Wholesale and Retail Trade industries. Finally, our results show that growth rates of TFP have also risen, a necessary condition to maintain the high growth rates of productivity in the future.

Entrepreneurship and ICT: a comparative analysis between Germany and Portugal

The paper aims to investigate the impact of the liberalisation of the European telecommunications markets on the business ownership rate, employment, Gross Domestic Product (GDP) and investment in Information and Communication Technologies (ICTs) in two European countries: Germany and Portugal. For this purpose, a Cointegrated Vector Autoregressive (CVAR) model is used in order to identify the impacts that originate from the adoption of this kind of public policy. In the case of Germany, a surprising causality relationship is detected, in the sense that the GDP precedes the decreasing business ownership rate. In the case of Portugal, the business ownership rate pulls for additional investments in ICT. Besides, a creative entrepreneurial destruction is somehow ratified, since the business ownership rate impacts negatively on the level of employment.

The Impact of ICT Investments on Economic Development in Egypt

AbstractSince the mid 1980s, Egypt has realized significant growth in information and communication technology (ICT) usage across different sectors in the economy. However, in today's global environment, the challenge no longer lies in accommodating the growth of the ICT sector that introduced changes that are arguably the most important since the industrial revolution. The essence is the diffusion of ICT across the society and ensuring that it furthers socioeconomic development. Managing this transformational process requires cooperation and partnerships between different stakeholders in the society to ensure steady and successful progress towards the goal of realizing a fully developed information society. Moreover, in order to generate economic development and growth, ICT need to be transformed into economic activities offering services, applications and content that create new markets, reduce costs and increase productivity. While ICT are generally adaptable; their effectiveness in addressing development issues still depends on their introduction, adoption, diffusion and adaptation within a healthy and encouraging regulatory environment. In that respect, the importance of ICT in socioeconomic development in Egypt was realized since 1999 leading to the allocation of ICT on the government agenda supported by the private sector and the civil society. This article addresses the recent efforts that were exerted in Egypt, as an emerging economy, in terms of building its ICT sector while analyzing the associated investments and their impact on economic development.

Fostering ICT Development for Growth: Measuring the Payoffs for Australia and the Asean-5 Countries

Over the past few decades the brisk development of information and communication technologies (ICT) has had a phenomenal impact on the economic stability and development of many countries. Empirical studies show that most developed economies have gained significant payoffs (in terms of economic growth) from their ICT investments. This study investigates the hypothesis that ICT-based investment has paid off for Australia and the ASEAN-5 countries (Malaysia, Singapore, Indonesia, Thailand and the Philippines) between 1992 and 2006. Applying a new cointegration technique[12], which takes into account the presence of a potential structural break, shows that ICT investment has had a positive and significant long-run relationship with economic growth in Australia, Malaysia and Singapore. However, in Indonesia, the Philippines and Thailand ICT investment did not contribute significantly to economic growth during the same period. These three countries have yet to reap the benefits of ICT. Our empirical results suggest that the three lagging ASEAN countries should increase their ICT investment in order to achieve sustainable economic growth in the new knowledgebased economy.

A Framework for Identifying the Intangible Capital Value of ICT Investments

Adequately considering the intangible value of Information and Communication Technology (ICT) investments has been problematic for as long as organisations have been making ICT investment decisions. This paper presents a framework for considering the intangible capital value of ICT investments. The framework applies the tripartite model of intangible resources, as proposed by the Australian Society of Knowledge Economics. The development of the framework was commissioned by the Australian Government Information Management Office (AGIMO) to inform the Australian government's Business Case Initiative process and its ICT Investment Framework. The concepts, models and frameworks presented in this paper provide a fresh approach to IT investment strategy and governance by supporting the consideration of the intangible capital value of one ICT investment vs another when making ICT investment decisions. In addition to taking a systems perspective they are grounded in emerging best practice concerning the consideration of intangible capital value as adopted by the accounting profession and academia.

Are ICT investments paying off in Africa? An analysis of total factor productivity in six West African countries from 1995 to 2002

In the past two decades, we have seen increasing debate about information and communication technology (ICT) as an engine of growth that could lift developing nations out of poverty. Many African nations have implemented market liberalization and invested huge sums of money into their ICT sectors. But few studies have been conducted to assess the effectiveness of these investments. Demonstrating ICT sector performance is especially important because of challenges of the development of ICT policy and the United Nations agencies inability to state firmly if there are benefits to these investments. In this article, we investigated the total factor productivity (TFP) of the ICT sectors in six West African countries from 1995 to 2002. While the findings demonstrate positive growth in TFP, there is cause for concern. TFP growth in the ICT sector has been declining, and these countries are not yet able to take advantage of scale efficiencies. Careful attention must be given to future ICT investment strategies and performance management of existing ICT infrastructure if continued growth is to be achieved. © 2008 Wiley Periodicals, Inc.

Together but Apart: ICT and Productivity Growth in Israel

There is widespread agreement about the important role played by Information and Communication Technologies (ICTs) in the US productivity revival and in the evolving US-EU productivity gap. In Israel, the ICT sector grew very rapidly during the 1990s and became a hotbed of innovation and technological advance by worldwide standards. Yet, Israel's overall productivity growth remained sluggish, with traditional sectors both in manufacturing and services seemingly unable to benefit from the success of the ICT sector. The main goal of this paper is to shed light on these twin developments. We use newly constructed data on industry-level ICT investments between 1990 and 2003 and estimate production functions for manufacturing industries augmented to include ICT capital. We find a significant elasticity of value-added with respect to ICT capital, which increases considerably with the technological sophistication of the industry. We also find that ICT capital deepening is the most important factor contributing to value added growth in manufacturing during 1995-2000, before the burst of the dot.com bubble. Because most ICT capital is concentrated in high tech industries, growth in manufacturing has been mostly confined to the high-tech sector. Facilitating the adoption of ICT in traditional industries is therefore crucial to achieving economy-wide growth. The Israeli experience described here - although restricted to the manufacturing sector - provides a useful example of the benefits and limitations associated with a growth strategy centred on a local ICT producing sector, however successful it might be.

Consequences of the new information and communication technologies for growth, productivity and employment

PurposeThe purpose of this paper is to discuss the high rates of economic growth of the US economy and the remarkable acceleration of productivity growth since the mid‐1990s which is widely attributed to the modern information and communication technologies (ICTs).Design/methodology/approachAfter identifying three key factors for Solow's productivity puzzle and examining ICTs as a general purpose technology, three main channels of ICTs' impact in the economy are discussed: the first transmission channel is direct and consists of the effects generated by rapid technical progress within the ICT‐capital goods producing sector. The second one is due to the increasing accumulation and application of ICT goods and services in the user sectors. ICTs' positive spillover effects comprise the third transmission channel, i.e. they lead to “disembodied” increases in efficiency in the sense of “learning by doing” in the end‐user sector.FindingsThe diffusion of ICTs requires investment in all industries, i.e. the improvement of competitiveness on the macro level is strongly linked to investment activities and skill qualifications on the micro level.Research limitations/implicationsThe paper concludes with some comparisons between the US and the German economy where the acute need for infrastructure investment in East Germany in the 1990s limited the possibilities for investment in ICTs exactly at a time of high‐technological dynamism at the start of an upswing of a new Kondratieff cycle. Although some comparisons with the EU are made the impact of ICTs in other countries except the USA and Germany is not discussed more intensively.Practical implicationsA very useful source of information for graduate students and policy makers alike on the theoretical and empirical impact of new technologies on economic development.Originality/valueThis paper fulfils an information need for comparing growth in international perspective.

ICT capital and services complementarities: the Italian evidence

This article investigates whether Information and Communication Technologies (ICTs) hardware and services play a complementary role in boosting economic growth. The main argument is that investments in ICT fixed capital are a necessary but not sufficient condition leading to productivity gains, above all in late adopter countries. Their effective implementation indeed requires on the one hand a changing economic structure characterized by a growing weight of service sectors and on the other hand complementary investments in ICT services, directed to ease the integration of the new technologies within firms’ boundaries. The analysis is conducted on a late industrialized country like Italy, and shows that in lagging countries the weak impact of ICT adoption is the result of three converging forces: relatively high share of manufacturing sectors, low-adoption levels of ICTs in traditional manufacturing sectors, inadequate investments in ICT services.

The effect of hard and soft information and communication technologies investment on manufacturing business performance in Greece – A preliminary econometric study

This paper presents the results of the first empirical investigation of the effect of information and communication technologies (ICT) investment on business performance in Greece. It investigates the effect of both ‘hard’ ICT investment (in ICT hardware, software and networks) and ‘soft’ ICT investment (in ICT human resources, skills and organization) on firm output. It is based on data from big Greek industrial firms, which have been collected via a questionnaire-based survey conducted in cooperation with the Federation of Greek Industries (FGI). Using these data, econometric models of output have been constructed based on the microeconomic production theory. Our analysis shows that the Cobb–Douglas production function can adequately describe the output, as compared to the more general transcendental production function. Using this type of production function it has been found that hard ICT investment in Greece makes a positive and statistically significant contribution to firm output; however its output elasticity is lower than the one of the non-computer capital and much lower than the one of the labour. Also, from the dimensions-measures of the soft ICT investment we examined, it has been found that the existence of a separate ICT department has a positive and statistically significant effect on firm output, which is of considerable magnitude of about two thirds of the effect of the hard ICT investment. The possibility of an effect of firm size on the structural stability of the econometric models we employed was also investigated; it was found that for firms with total sales above about €20 million the structure of the models is reasonably stable, and therefore the conclusions drawn from them are valid, at least for the range of firm sizes that our data cover.

The Rise and Fall of German Productivity Software Investment as the Decisive Driver

Investments in Information and Communication Technology (ICT) are the source of the global growth resurgence that commenced in the mid-1990s. Most studies focus on broad ICT measures, or on computer hardware; here we examine the contributions of software-intensive industries to productivity growth. The price of prepackaged software has been falling exponentially since the 1960s, which has led to substitutions towards software investments, and to reductions in the total cost of ICT hardware investments. We use novel German ICT investment data to show that software-intensive industries have been the crucial determinant of German productivity growth since 1995. Not only did these industries contribute strongly to productivity growth, but they offset declining investments and productivities in other industries. Post 1995, other industries’ investments in new equipment per worker collapsed, while software-intensive industries’ capital investments rose steadily to generate over half of Germany's productivity growth by 2000–04. We document sharply diverging productivity paths for software-intensive and other (non-software-intensive) industries. Post 1991, total factor productivity (TFP) declined secularly in other industries to generate a −0.39 percent drag on German labor productivity by 2000–04, while TFP in software-intensive industries rose steadily to contribute 35 percent to German labor productivity growth by the same period. Overall, the results combine to paint a stark picture of rising capital per worker and TFP growth in software-intensive sectors, contrasting with falling capital per worker and increasingly negative TFP growth in other sectors. About two-thirds of the impact from software-intensive industries is generated by investments in prepackaged and purchased custom software. (JEL codes: O03, O04)

African business schools: Information and communication technology survey

Purpose: The aim of this paper is to report on research into the status of information and communication technology in use at members of the Association of African Business Schools (AABS).Design/Methodology/Approach: The research reported on in this paper was carried out using a questionnaire sent by email to the target population (all the members of the AABS). The questionnaire covered a wide range of issues, including information technology strategy and governance, as well as the operational aspects of the use of Information and Communication Technology (ICT) in the institutions surveyed. Questions were based on topics identified from the literature and a recent industry survey conducted in one of the member countries, and the assessment criteria were based on a maturity rating scale. Findings: This research helps to further an understanding of the use of ICT in the organisations that responded to the survey. Overall, there was a high level of understanding or applicability (over 95%) among the topics surveyed across all schools, but there was a significant proportion where no action on that topic had yet been taken (over 30% of all maturity ratings across all respondents). Average maturity rating across all topics for all respondents was 2.3 (action taken but an informal approach to the topic is currently used) on a scale from 0 to 5. Implications: This research has important implications for the organisations responding to the survey and their awareness of the issues they face as institutions that seek to leverage their investments in ICT to raise their own competitive position and thus that of African organisations which have students educated at these business schools. There are also implications for the future success of the newly-formed AABS and its other initiatives in terms of meeting the objectives of the Association. Originality/Value: This research is original in terms of which there is a broad understanding of the extent to which ICT is available and in use amongst the members of the AABS. Prior to the foundation of the Association, no suitable forum existed for the conduct of this research. The originality therefore, is in the opportunity presented to form a broader understanding of the status of the use of ICT to support the activities of business schools across Africa. The value of this research may be applied to both those respondents to the survey, other members of the AABS and other business schools operating in Africa that wish to understand the issues in the field of ICT that they should be addressing.

E-Learning Investment Risk Management

E-learning markets have been expanding very rapidly. As a result, the involved senior managers are increasingly being confronted with the need to make significant investment decisions related to the elearning business activities. Real options applications to risk management and investment evaluation of Information and Communication Technologies (ICT) have mainly focused on a single and a priori known option. However, these options are not inherent in any ICT investment. Actually, they must be carefully planned and intentionally embedded in the ICT investment in order to mitigate its risks and increase its return. Moreover, when an ICT investment involves multiple risks, by adopting different series of cascading options we may achieve risk mitigation and enhance investment performance. In this article, we apply real options to the e-learning investments evaluation. Given the investment’s requirements, assumptions and risks, the goal is to maximize the investment’s value by identifying a good way to structure it using carefully chosen real options.

A Time Series Analysis of International ICT Spillover

This article studies the role of international spillover of information and communication technology (ICT) in economic growth. We examine the performance of ten countries from 1982 to 1999. By empirically analyzing the relationship between total factor productivity (TFP) and domestic and foreign ICT investment with time series analysis tools, we find limited evidence that there exist international ICT spillovers for a group of countries. Further, we discuss the possible ICT policies to improve productivity and balance out a win-win situation for both ICT spillover sending and receiving countries.

India in the knowledge economy – an electronic paradigm

PurposeThe purpose of this paper is to make a strong case for investing in information and communication technologies (ICT) for building up of quality human resource capital for economic upliftment of India. An attempt has been made to explore the possibilities of online learning (OL)/e‐learning towards building up of quality human resources in higher education for a developing nation like India. A comprehensive environmental scanning of various e‐learning experiments, tools, projects to facilitate e‐learning or various institutional level efforts has been carried out. The paper also seeks to highlight the options available with traditional institutes for deploying ICT and for implementing e‐learning.Design/methodology/approachThe paper is a descriptive account of the contemporary situation in India with regard to education especially e‐learning and draws on a variety of secondary sources both published and unpublished.FindingsArgues that the development of e‐learning has been limited and reasons out why. The challenges of traditional face‐to‐face educationvis‐à‐vise‐learning in India are enlisted and suggestions for management of the e‐learning process by institutes which intend to venture into e‐learning are enumerated. The paper advocates the urgency for the traditional institutions to put an impetus on investment in ICT for providing e‐instruction for delivery of knowledge by riding the information super highway.Research limitations/implicationsPresents a review of literature developed from secondary sources.Practical implicationsModels of e‐learning that exclude any face‐to‐face contact may have limited prospects, but blended learning offers significant potential both on and off campus and should be pursued if the benefits of e‐learning are to be fully realized.Originality/valueThis paper provides a useful overview of a scenario of OL/e‐learning in India's higher education; and, from this summary of the present situation, goes on to suggest possible ways to transform the “digital divide” into “digital opportunities”.

The impact of ICT investment and energy price on industrial electricity demand: Dynamic growth model approach

The authors investigate the effects of information and communications technology (ICT) investment, electricity price, and oil price on the consumption of electricity in South Korea's industries using a logistic growth model. The concept electricity intensity is used to explain electricity consumption patterns. An empirical analysis implies that ICT investment in manufacturing industries that normally consume relatively large amounts of electricity promotes input factor substitution away from the labor intensive to the electricity intensive. Moreover, results also suggest that ICT investment in some specific manufacturing sectors is conducive to the reduction of electricity consumption, whereas ICT investment in the service sector and most manufacturing sectors increases electricity consumption. It is concluded that electricity prices critically affect electricity consumption in half of South Korea's industrial sectors, but not in the other half, a finding that differs somewhat from previous research results. Reasons are suggested to explain why the South Korean case is so different. Policymakers may find this study useful, as it answers the question of whether ICT investment can ultimately reduce energy consumption and may aid in planning the capacity of South Korea's national electric power.