While productivity growth driven by the use of IT in Australia appears to be falling—a new BCR study found that IT has stimulated the productivity of other assets such as land in a number of industries, particularly in finance.

8 February 2016

IT use and Australia’s productivity: Where are we now? uses ‘growth accounting’ (which identifies contributions to productivity from capital inputs and innovation) to measure the labour-saving effects of computers on labour productivity growth in Australia.

The analysis reveals that the impact of IT substituting for labour has decreased, however, IT has been found to improve the efficiency with which other assets are used, such as land, building, vehicles and inventories.

Other key findings include:

  • The finance industry is leveraging more productivity gains from the use of ICT than many other industries–occurring mainly from the substitution of IT for labour and an increase in the productivity of skilled labour.
  • Business use of IT is enabling the more efficient use of land, best demonstrated by bank branch rationalisation and the development of ‘just in time’ inventory management systems for wholesaling.
  • The growth in stocks of IT equipment held by business is slowing.

BCR Digital Productivity Report

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IT use and Australia’s productivity: Where are we now? uses ‘growth accounting’ analysis to measure the labour-saving effects of computers on labour productivity growth in Australia.
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