Enterprise Information and Communications Technology Software and Services Pricing and Productivity Measurement


Enterprise Information and Communications Technology Software and Services Pricing and Productivity Measurement


Thursday 26 January 2023, 12:30 — 13:30


Presented by Martin Fleming (The Productivity Institute)

The 1999 addition of business sector software and services spending was an important National Income and Product Accounts innovation which followed a period of strong productivity growth and achieved a novel focus on the measurement of intangible asset investment. Over the intervening years, enterprise information and communication technology (ICT) has fundamentally changed. Business sector technology leaders have a much wider array of ICT choices – software-as-a-service; open-source software; computing, storage, and communications cloud services; and developer services from a range of global resources. As always, labor and multifactor productivity are important sources of value creation, however, measurement has been challenging. As the software sector has become increasingly important in providing business sector ICT productivity, software sector software developer productivity has become a viable proxy for business sector ICT developer productivity. With the use of a standard growth accounting framework, the shadow price of the business sector ICT function has been underestimated by 1.8 percent points (ppts) over 2003 to 2019 and by 6.3 ppts over 2015 to 2019. The impact on GDP growth is a 0.1 ppt underestimate between 2003 and 2019 while the impact increases private fixed investment from 16% to 21% of GDP. Over the 2015 to 2019 period, GDP growth is underestimated 0.3 ppt while private fixed investment would have been 43% of GDP, up from the current estimate of 16%.

To read the paper visit here.

Martin Fleming is a Fellow of The Productivity Institute, a UK research organization and Chief Revenue Scientist, Varicent, a Toronto-based sales-performance management software provider. Martin is also a researcher at the MIT–IBM Watson AI Lab and the U.S. Bureau of Economic Analysis. Martin is the former IBM Chief Economist and former IBM Chief Analytics Officer. He is the author of Breakthrough: A Growth Revolution, which is published Business Expert Press and is available on Amazon.

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