Various studies have been conducted in recent years on the same subject. In addition to the US, European countries were also observed; the empirical results were however much less clear in the latter in their statements on the relationships of the effects. The BMWA also commissioned a study in the past on this topic. The Rhine-Westphalian Institute for Economic Research (RWI) conducted a comparison between Germany and the US with the title "New Economy - An Inventory from a German Viewpoint" in co-operation with Professor Robert Gordon. The impact of the intensification of the use of ICT capital was calculated for both countries with a Growth Accounting approach, which shows a positive contribution of ICT to the growth of the gross domestic product (GDP), that is higher for the US than for Germany, just as the contribution of the factor labour to macroeconomic growth is also higher in the US. This pattern implies that ICT does have an impact and that the economy in Germany is not in an advanced state of the "New Economy" characterised by a strong effect of ICT. The RWI study, however, due to its macroeconomic orientation, was incapable of drawing clear conclusions on the state of the ICT introduction in Germany and the reasons for the weaker development.
The BMWA consequently initiated a new analysis focusing on different sectors and based on a mix of quantitative and qualitative methods. The task was to analyse and evaluate developments in six European countries, namely Germany, France, Great Britain, Italy, the Netherlands and Sweden. Those sectors that are important users of ICT, namely mechanical engineering, the automotive industry, banking and trade, were chosen to analyse the state of diffusion and its effects. The analysis looked at the differences in the development of productivity between the sectors and the countries under investigation.
It was required to incorporate the sectoral results in a macroeconomic explanation to show the direct, microeconomic causes for the use of ICT and utilisation of its positive effects but also the importance of an institutional framework for a corresponding positive development. It is necessary in this regard to point out the limits of the informative value of available indicators and the effectiveness of the methods. In this context the assumptions - usually not explicitly mentioned - play an important role, in particular those based on Growth Accounting as well as econometric approaches.
Ultimately, the goal is to reveal the state and effects of the use of ICT in Germany in relation to other European countries. Based on these insights, the question of what measures need to be taken to leverage the "New Economy" needs to be addressed.
Here the term "New Economy" is based on Nordhaus, who uses the term for procedures such as the collection, processing and conversion of information that are conducted with the help of computers, telecommunication facilities and with the use of software. The central point of the analyses are the newer internet-based technologies, which are, however, viewed in the context of previous technologies in order to address the question of the extent to which the progress is evolutionary or revolutionary.
This was viewed from three different angles:
Three econometric approaches were used to determine the effects of ICT investments on productivity. The first two approaches are based on neoclassical theory. Longterm growth effects can be determined with the first approach based on a Barro growth model. The second approach serves to analyse short-term growth effects.
The third approach is outside of this tradition. It follows the work of Lee et al. (1990) and Barker (1998), which is based on the early research by Kaldor (1957, 1961). A model is developed integrating the technical progress in the process of capital accumulation. It is assumed that the latest investment in new machinery and equipment incorporates the most recent state of technology. The influence of earlier investment on the present state of technology decreases over time in this approach.
In general, the time periods 1980-1989 (early phase) und 1993-2000 (late phase) were used for the econometric research. The disturbance from the German reunification was factored out as much as possible. The economic cycle patterns in both periods exhibit similarities, as, for example, they are both characterised by a strong recession in the first years. Three different data pools were used. The data pool from CE was used for the six countries to test the estimating approach for the four sectors, plus the services sector, the manufacturing sector and the economy as a whole. The second pool was made available by the Groningen Growth Development Centre (GGDC), which contains only time series for the four countries Germany, Great Britain, the Netherlands and France but offers additional information on investment in ICT. The third data pool contains detailed information on the development of the capital stock on the sector level. It provides information on the procurement of investment goods, differentiated by the kind of good and the investing industry. This very detailed data pool, based on investment matrices created by CE and Ifo, exists, however, only for Great Britain and Germany.
Econometric models were used to determine the effects of ICT investments on productivity. The results of the econometric estimation revealed impact from the investments in ICT on labour productivity only in isolated cases. Although no influence of the investment in ICT on the development of labour productivity was detected in the early phase, the influence was confirmed in some sectors in the late phase, admittedly only at a low significance level for the distribution trade in Germany and banking in Great Britain. Both of the sectors are also mentioned in the scientific literature as examples for significant results in empirical analyses on the "New Economy". But the overall econometric results do not support unambiguous conclusions on the effects of ICT.
The qualitative analyses of the sectors under investigation showed that Germany does not lag behind other European countries in the use of ICT. The two examined industry sectors - mechanical engineering and car manufacturing - started implementation in the 1980s and were at the forefront of development of the diffusion of this technology. Their position weakened in the 1990s due, in part, to the investment reluctance in the manufacturing industries. New projects were not tackled as enthusiastically as in the decade before so that the diffusion of new application software has proceeded less dynamically. A systemic lag towards other countries can, however, not yet be deduced from this.
In contrast, the two examined service sectors display an acceleration in investments in ICT and an increasing dynamic of diffusion in the late phase of the observation period. The German distribution sector is leading in the diffusion of new ICT, owing especially to the high degree of concentration and cooperation. Only the diffusion of point-of-sales terminals plays a less dominant role than in other countries which is due, among other things, to lacking customer acceptance. ICT supported systems play a larger role than in the other countries in banks retail trade.
Despite the high dissemination of ICT in Germany relative to other European countries, labour productivity has developed less favourably, with the exception of mechanical engineering. One possible reason for the poor development of productivity in car manufacturing is the widespread product differentiation. In service industries rationalisation potentials have not been efficiently utilised due to weak domestic demand. In banking, whose restructuring started during the late 1990s, efficiency benefits could not be exploited immediately because of institutional conditions. Due to high employment security, lay off of redundant staffs is only possible over the course of time, usually through mutually agreed contracts.
Stand und Perspektiven der „New Economy“ in ausgewählten Mitgliedstaaten der EU aus deutscher Sicht by Hans-Günther Vieweg, Thomas Fuchs, Reinhard Hild, Andreas Kuhlmann, Stefan Lachenmaier, Michael Reinhard, Uwe Chr. Täger, Sebastian de-Ramon (Cambridge Econometrics), Jan-Egbert Sturm (Universität Konstanz); ifo Beiträge zur Wirtschaftsforschung Band 19 ( Abstract )
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