chapter  14
ICTs and growth potential
Pages 9

As a result of the rapid worldwide expansion and use of telecommunications networks, the Internet has broadened the potential of the exchange of information and goods significantly. Most of the entire economic and social system will be affected by this development (see, e.g., Bosworth and Triplett, 2000; Jorgenson and Stiroh, 2000; Oliner and Sichel, 2000; David, 2001; Nordhaus, 2001). In Germany, the Internet is becoming firmly established as a mass medium in a similar way as it is in the USA. This affects, on the one hand, the areas of communications (email, chats, etc.), information (news, databases, advertisements, etc.), as well as entertainment (music, videos, PC games, online casinos, etc.), and, on the other hand, ‘electronic commerce’. E-commerce represents one of the most important applications based on information and communications technologies. Therefore, this chapter focuses on the overall economic effects of e-commerce and their implications for a long-lasting growth. This is also of prominent interest with respect to the bursting of the speculative bubble of the technology stock markets in 2000. In this context, the following questions needed to be answered:

• What role does e-commerce play in the optimisation of production processes, the reduction in transaction costs and, ultimately, in overall economic growth?