Author(s)
Theo Eicher and Thomas Strobel
Source
CESifo Economic Studies, Vol. 54, Issue 3, pp. 386-413, 2008
Summary
This paper looks at how software affects the German economy.
Policy Relevance
Software has helped people do more with less, dramatically increasing productivity. Countries benefit from this technology, even if a large firm in the sector (like Microsoft) is based outside the country.
Main Points
- Since 1960, software prices have fallen dramatically. This has lead to more software investment and has helped hardware do more with fewer resources, increasing productivity.
- Most productivity growth is due to the software and computer services sectors alone, not computer and telecommunications hardware.
- The dramatic growth in software productivity, 35% positive, made up for the fact that productivity declined in other German economic sectors, 15% negative.
- Much of the productivity growth in software is due to pre-packaged software.
