Information and communication technologies, globalisation and competitiveness : a selective survey

This paper gives a selective survey of different economic theories in order to discuss the role which IT plays for globalisation and how globalisation and technological progress in the IT-sector influences structural change, economic growth and national competitiveness. The decline in trade costs induced by IT will further enhance the existing trend of increasing trade in goods and services, especially those where reduction in trade costs due to IT are going to be most substantial. One hypothesis is that the rise in services trade will be greater than the rise in goods trade. Furthermore, modern IT does not just influence if, but also how foreign trade is to be carried out. Globalisation initiates structural change. In the long-run, however, conclusions with respect to convergence or divergence of factor endowments, production patterns and income levels seem to depend on the choice of the theoretical model. In discussing the role of IT for growth of the aggregate economy we have to distinguish between capital deepening and spillover effects. Since capital deepening means purchases of IT-investment goods we expect that firms are able to judge the growth prospects offered by IT. Thus there is no need for a special policy approach for firms involved in the manufacturing and supply of IT-products. If on the other hand the IT-sector generates technological spillovers, then a special economic policy treatment is justified.