PAYOFFS FROM INVESTMENT IN INFORMATION TECHNOLOGY - LESSONS FROM THE ASIA-PACIFIC REGION

This paper examines the factors influencing investment in information technology (IT), and the payoffs from investment in IT use on productivity and economic growth in 12 Asia Pacific countries for 1984-90. It finds a significant positive correlation between growth in IT investment and growth in both GDP and productivity over the seven-year period. Countries with higher growth rates in IT investment achieved consistently higher growth rates of GDP and productivity. This finding is consistent with the notion of IT-led development. It challenges the so-called productivity paradox, or the notion that investment in IT has not paid off in productivity improvements.