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Dept of Trade and Industry

Answer

Mr. Tynan: To ask the Secretary of State for Trade and Industry what assessment she has made of changes in UK productivity as a result of increased (a) dial-up and (b) broadband internet access. [197600] Mr. Mike O'Brien: The economic impact of increased internet access is difficult to separate from the impact of adoption of the full range of information and communication technologies (ICT). Indeed, there is a consensus both that the use of ICT has been and will continue to be a major contributor to productivity growth, and that its full value is realised by using a mix of the technologies to transform the way that organisations perform their business. An assessment of the increase in business productivity associated with increased use of a range of ICTs was published in DTI Economics Paper No. 8: "Raising UK productivity--developing the evidence base for policy". This found that in 1995-2000 the growth in labour productivity in ICT-using industries was 3.72 per cent. p.a. compared with 0.20 per cent. p.a. for non-ICT industries. This study also showed that, based on results of DTP s "International Benchmarking Study: Business in the Information Age" and controlling for other variables, the average sales per employee was significantly and positively related to the intensity of use of connectivity technologies (including internet access). The most recent International Benchmarking Study (2004) found that businesses that have upgraded their internet connection over the last two years reported a range of benefits. These included time savings through faster connection (79 per cent.), improved real time communication (17 per cent.), ability to use more applications (9 per cent.) and increased reliability (9 per cent.). These results are consistent with a range of research and surveys conducted by other organisations over the past few years. For example, the recent survey by the Institute of Directors ("Broadband: its impact on British Business") found that 84.3 per cent. of respondents who used broadband saw a quantifiable increase in productivity and about two thirds felt able to predict an increase in profit.

Secondary information

Type

Written question

Reference

426 c1077-8W;426 c1081-2W; 197600

Session

2003-04

Subjects

Access Broadband Internet Take-up Productivity

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk