ABSTRACT
Estimating the economic impact of the information revolution is a complex task. In this study, empirical observations are used to show how information flows in key processes in an industry have been digitized and how this digitization has led to a wide range of effects. Researchers have studied the impact of information technology (IT) on productivity growth for several decades, reaching disparate conclusions regarding the contribution of IT investments to productivity (see literature reviews by Brynjolfsson & Yang, 1996; Dedrick, Gurbaxani, & Kraemer, 2003). Productivity is often expressed in measures such as labor productivity, total factor productivity (TFP), or multi-factor productivity (MFP) (Schreyer & Pilat, 2001). Even though productivity is an important measure for evaluating financial performance of individual firms and economic growth on an industry or national level, it is questionable whether conventional productivity measures are appropriate for evaluating the role of IT in financial and economic development (Brynjolfsson, 1993; Statistics Sweden, SCB, 2004).
