Academic journal article International Advances in Economic Research

Do ICT Influence Economic Growth and Human Development in European Union Countries?

Academic journal article International Advances in Economic Research

Do ICT Influence Economic Growth and Human Development in European Union Countries?

Article excerpt

Abstract This study analyzes the influence of the introduction of Information and Communication Technologies (ICT) on economic growth and human development in the countries that make up the European Union 27. The remarkable interest that the European Commission has shown in the Information Society (IS) and the introduction of ICT inspired us to analyze to what extent ICT had established themselves in these countries. More specifically, countries are grouped in accordance with some of the main IS indicators published by Eurostat to ascertain whether or not there are different groups of countries with different levels of development and where ICT have been implemented to different degrees. We determine whether they have achieved different levels of economic and human development. This enables us to confirm (or reject) the main theories that suggest ICT have a strong influence on economic and human development. Results show the existence of four clearly distinct groups of countries which register significant differences.

Keywords Information and communication technology * Information society * Economic growth * Human development

JEL C10 * O19 * O3 * O52

Introduction

Since the last few decades of the 20th Century, we have undergone a productive, social and economic transformation unheard of to date, giving rise to what is known as the Information Society (IS). One of the key aspects in this transformation is the Information and Communication Technologies (ICT). Their rapid development and the way they have reached households, firms and governments at the local, regional, national and international level has been a genuine revolution.

The European Union (EU) has for a long time now been interested in studying the IS from various angles, due to how complex the phenomenon is. As a result, eEurope was launched in 1999 to ensure that Europe took full advantage of the changes that the information society was undergoing, aiming to make information technologies as widespread as possible.

One year later, the European Council at Lisbon set a target for the EU of becoming the most competitive and dynamic knowledge economy in the world during the first decade of the 21st Century. eEurope 2002 (European Commission, 2001) and eEurope 2005 (European Commission, 2002) were two action plans in the same vein.

More recently, a new strategic framework has been established: i2010--A European Information Society for Growth and Employment (European Commission, 2005). This initiative is in keeping with the review of the Lisbon Strategy and its purpose is to coordinate the action taken by Member States to facilitate digital convergence and confront the challenges linked to the IS. This initiative sets three goals to be achieved before 2010: to create a single European information space, to reinforce innovation and investment in the field of ICT research, and to create an IS based on inclusion.

In order to achieve the foregoing objectives, a large number of steps have been proposed, including revising electronic communication regulations, fostering security in the IS, increasing European grants for ICT research by 80% by 2010, promoting private investment in R+D+i in this field, publishing political guidelines regarding electronic accessibility (e-accessibility) and broad band coverage. In short, these are a series of measures to further establish ICT in EU countries.

The remarkable interest that the European Commission has shown in the IS and the introduction of ICT inspired us to analyze to what extent ICT had established themselves in the 27 countries in the EU (Table 1). More specifically, countries will be grouped in accordance with some of the main IS indicators published by Eurostat to ascertain whether or not there are different groups of countries with different levels of development and where ICT have been implemented to different degrees. Once these groups have been formed, we will determine whether they have achieved different levels of economic and human development. …

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