Enterprise information and communications technology software pricing and developer productivity measurement
Corresponding Author
Martin Fleming
MIT CSAIL FutureTech Lab, The Productivity Institute
Martin Fleming is Research Economist, MIT CSAIL FutureTech Lab and Fellow, The Productivity Institute; Research Economist. Martin is the former IBM Chief Economist and Chief Analytics Officer. Comments and input from Ana Aizcorbe, Jen Bruner, Dave Byrne, Carol Corrado, Diane Coyle, Marshall Reinsdorf, Shane Greenstein, Tina Highfill, Bill Nichols, Greg Prunchak, Jon Samuels, Dan Sichel, Dave Washaussen, and two anonymous referees are greatly appreciated. This work has been funded by the Bureau of Economic Analysis. Any remaining errors or omissions remain the responsibility of the author.
Correspondence to: Martin Fleming, MIT CSAIL FutureTech Lab, The Productivity Institute, 264 Grandview Avenue, Glen Ellyn, IL 60137, USA ([email protected])
Search for more papers by this authorCorresponding Author
Martin Fleming
MIT CSAIL FutureTech Lab, The Productivity Institute
Martin Fleming is Research Economist, MIT CSAIL FutureTech Lab and Fellow, The Productivity Institute; Research Economist. Martin is the former IBM Chief Economist and Chief Analytics Officer. Comments and input from Ana Aizcorbe, Jen Bruner, Dave Byrne, Carol Corrado, Diane Coyle, Marshall Reinsdorf, Shane Greenstein, Tina Highfill, Bill Nichols, Greg Prunchak, Jon Samuels, Dan Sichel, Dave Washaussen, and two anonymous referees are greatly appreciated. This work has been funded by the Bureau of Economic Analysis. Any remaining errors or omissions remain the responsibility of the author.
Correspondence to: Martin Fleming, MIT CSAIL FutureTech Lab, The Productivity Institute, 264 Grandview Avenue, Glen Ellyn, IL 60137, USA ([email protected])
Search for more papers by this authorAbstract
The 1999 addition of business sector software and services spending to the National Income and Product Accounts was an important innovation, achieving a novel focus on the measurement of intangible asset investment. Over the intervening years, enterprise information and communication technology (ICT) has fundamentally changed. The transformation has raised questions about the extent of the decline of ICT function software prices. As a software producing sector, the business sector ICT function now has a much wider array of production factor choices. In addition, labor and multifactor software development productivity, an important sources of value creation, varies widely from year to year. With the use of a two-sector model and a standard growth accounting framework, a business sector ICT function shadow price is estimated, finding that software price declines have been underestimated by 4.4 percentage points (ppt) over 2015 to 2021. The impact on GDP growth is a 0.1 ppt underestimate. Correcting the underestimate increases software spending from 19.6% to 24.7% of nonresidential fixed investment, and from 47.4% to 59.9% of real intellectual property product spending.
Supporting Information
| Filename | Description |
|---|---|
| roiw12711-sup-0001-Supinfo.xlsxExcel 2007 spreadsheet , 1.3 MB |
Data S1. Supplementary Information. |
| roiw12711-sup-0002-Appendix.docxWord 2007 document , 2.7 MB |
Appendix A. Cost Minimization in Dual Production Theory. Appendix B. The Scientific R&D Services Sector. Appendix C. Business Sector ICT Shadow Price and Software Developer Productivity. Appendix D. Data Sources and Assumptions. Appendix E. Resources and Prices. |
Please note: The publisher is not responsible for the content or functionality of any supporting information supplied by the authors. Any queries (other than missing content) should be directed to the corresponding author for the article.
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