IT spillover effects on Korea economy: For the creative economy based on IT

Abstract

Objectives: The studies in the unit of nation revealed that the IT productivity is in the course of influencing GDP. Therefore, this study analyzed the TFP (Total Factor Productivity) of IT hardware and IT service industries and their productivity spillover effect on each industry. Methods/Statistical Analysis: This study used linked input-output tables to reclassify the IT industry into IT hardware and IT service, obtained the TFP of the IT hardware and IT service, and analyzed the effect of each TFP on other industries. In this way, unlike conventional labor productivity based IT productivity, it was possible to obtain TFP and price-based qualitative numerical values in terms of the productivity effect on other industries. Findings: According to the analysis, the TFP of IT hardware was 2.313 in 2000 and 3.906 in 2005, which was the highest of the TFPs of 30 industries. The TFP of IT service was 0.990 in 2000 which was the 11th position, and 0.988 in 2005 which was the 8th position. Application/Improvements: The study results bring about the following suggestions: First, the productivity of the IT industry positively influenced the Korean economy, and the influence was on the rise. Secondly, the spillover effect of the IT industry expanded from the secondary industry to the tertiary industry. The effect of IT hardware on the tertiary industry was also charged greatly in terms of importance. Thirdly, the IT industry evenly influenced overall industries, rather than particular industries, with the lapse of time.