The Impact of Investment in IT on Economic Performance: Implications for Developing Countries

We review quantitative and qualitative research on the impact of IT on economic performance in developed and developing countries. In general, studies from the developed world have yielded evidence of a strong positive correlation between IT and economic performance, as well as IT-induced changes in workforce composition in favor of highly skilled or educated workers and organizational changes that allow firms to implement IT more effectively. To maximize social returns to IT investment, policymakers in developing countries must address two key deficiencies: (1) a lack of knowledge of “best practices” in IT usage and (2) IT-related skill deficiencies in the workforce.