September 2002 ICT Investment and Growth Accounts for the European Union, 1980-2000 Final Report on «ICTand Growth Accounting»for the DG Economics and Finance of the European Commission, Brussels Bart van Ark Johanna Melka Nanno Mulder Marcel Timme Gerard Ypma This report provides new series of ICT investment and ICT capital, estimates of the contribution of ICT capital to output and labour productivity growth, and the TFP contribution stemming from ICT production for the European Union from 1980 to 2000. The investment numbers are based on series from national statistical offices, complemented with new estimates which are specifically constructed for this study. The main findings are that even though real investment and capital service flows in the EU increased as rapidly as in the U.S., the shares of ICT in total investment and capital service flows in the EU have been approximately half to two thirds of the U.S. level throughout the period. In relative terms ICT capital in the EU was at only one-third to half of the U.S. contribution to labour productivity growth up to the mid 1990s. Since the mid 1990s the relative contribution of ICT capital improved, but overall EU productivity growth collapsed. The study shows large variations in terms of ICT and TFP contributions to labour productivity growth between European countries, but no EU country (except Ireland) is ahead of the U.S. in terms of the total contribution from ICT. These findings might suggest that the EU is just lagging behind the U.S. in terms of ICT contributions to productivity growth. But the recent decline in aggregate productivity growth in Europe suggests that other factors, such as regulations and structural impediments in product and labour markets, may be standing in the way of a rapid catch-up of Europe on the U.S. as well. Abstract This paper has received funding from the European Commission. It reflects the authors views. The EC is not liable for any use that be made or the information contained herein. Full text (pdf) To view the PDF document, use Acrobat Reader