Productivity and digitalisation in Sweden

– How digitalisation drives productivity growth

Sweden was an early adopter of comprehensive broadband penetration with a large number of advanced users. This infrastructure is a good steppingstone towards growth, but not necessarily a growth driver in its own right.

The digitalisation process was introduced early in the Swedish private sector. The Swedish Agency for Growth Policy Analysis presents new data that shows that the contribution of the ICT-sector and the ICT-investments between 1995–2005 amounted to 32 per cent of the total productivity growth of the Swedish economy.

Despite economic development fluctuations, the impact and importance of the digitalisation process has increased in the economy. New calculations by Growth Policy Analysis indicate that between the years 2006–2013 the ICT contribution to the economy has grown larger. During the same period the ICT-sector and the ICT-investments in the entire Swedish economy contributed 42 per cent to the total productivity growth.

This big growth-potential is due to the fact that the entirety of the private sector reaps the benefits of the digitalisation process. All sectors invest in new technology but so far, almost exclusively the ICT-sector is showing productivity gains. The new data demonstrate that it is the ICT-sector that displays these productivity gains during the period 1995–2013. The contribution from all other sectors is negligible.

This productivity growth, that the ICT-sector is generating, is geographically linked to Stockholm. The new calculations, done by Growth Policy Analysis, show that between 1995–2005 Stockholm accounted for 50 per cent of the productivity growth. A change occurs between 2006–2013 and the contribution for Upper Norrland and Eastern Central Sweden is now noticeable.

Company IT-investments are not solely responsible for growth. New studies show that new technologies need to be complemented by i.e. organisational changes, staff education, in order for the new technologies to be implemented successfully. Because a number of factors conglomerate to create productivity growth it can take some time before the results are evident.

Productivity and digitalisation in Sweden – How digitalisation drives productivity growth

Serial number: PM 2014:17

Reference number: 2014/002

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