Information Technology and Australia’s Productivity Surge

The rapid uptake of information and communication technologies (ICTs) contributed to Australia’s very strong productivity performance in the 1990s. Indeed, the contributions of ICTs to labour productivity growth in the 1990s was at least as strong in Australia as it was in the US.

These are two of the key findings from the latest Productivity Commission staff research paper, Information Technology and Australia’s Productivity Surge.

The paper shows that Australia has benefited from the use of ICTs. Australia has been very quick on the uptake of ICTs by international standards. Whilst ICT production added up to 0.3 of a percentage point to US productivity growth, Australia generated a productivity improvement of 1.1 percentage points from ICT use and other factors. Policy reforms have played a role in encouraging the faster uptake of ICTs and facilitating business restructuring to tap the productivity gains that using ICTs can bring.