ICT-specific technological progress in the United Kingdom

This paper analyses the impact of rapid technological change in the information and communications technology (ICT) sector on economic growth in the United Kingdom. We find that technological progress specific to the ICT sector accounts for around 20-30% of long-run labor productivity growth. We demonstrate that a permanent increase in the growth rate of ICT-specific technological progress will increase the investment expenditure share of GDP but lower the aggregate depreciation rate, while an increase in the return to investment in ICT will increase both the expenditure share and the depreciation rate.