WASHINGTON—Information technology created nearly all the pickup in economic growth during the last decade, adding $2 trillion to the U.S. economy, according to a report by the nonprofit Information Technology & Innovation Foundation (ITIF).

The report, “Digital Prosperity: Understanding the Economic Benefits of the Information Technology Revolution,” found that the integration of IT into virtually all aspects of the economy and society is creating a digitally enabled economy responsible for generating the lion’s share of economic growth and prosperity, here and abroad, including in developing nations.

“For the United States alone, what we found was that because of the digital revolution, GDP is $2 trillion larger today than it would have been had growth in the post-1995 era proceeded at the 1974 to 1995 rate,” said Robert D. Atkinson, Ph.D., president of the ITIF.

Make IT the centerpiece
“We need to recognize this phenomenon and adjust our thinking to make IT a centerpiece of our economic policy – from planning and forecasting to tax policies that incent future growth.
“Policies to support digital transformation need to become the fourth leg of economic policy alongside fiscal, monetary and investment policy,” said Atkinson.

“In particular, this means that policy makers must adopt an approach that incorporates IT transformation in all that they do. Accelerating digital transformation is likely to be the most important step policy makers can take to ensure robust economic growth in the future.”

The report recommends that policy makers:
Support research in emerging IT areas;

Use tax, regulatory and procurement policies to spur greater IT innovation in key sectors such as healthcare, education, transportation and others;
Lead by example, leveraging government’s own IT efforts to achieve more effective and productive public sector management;

Use the tax code to spur investment;

Encourage universal digital literacy and digital technology adoption;

And, finally, do no harm by avoiding laws and regulations that would slow digital transformation.

ITIF is a nonprofit, non-partisan public policy think tank that advances a pro-innovation and pro-technology public policy agenda nationally and internationally.
A copy of the report can be downloaded at: www.itif.org/files/digital_prosperity.pdf

© 2007, TechJournal South. All rights reserved.