The impact of information technology on economic growth in Korea

Korea is one of the major information technology producing countries in the world. This paper investigates the impact of information technology on economic growth. According to the production possibility frontier approach, the output contribution of IT with respect to overall GDP growth has increased to 1.52 %, which amount to 33.5% of GDP growth rate in the period of 2000-2004. With regards to input contribution, the contribution of software (0.32%) and communication equipment (0.38%) accounts for a major portion of the increase in the IT input contribution. The IT contribution to TFP growth has become 1.28%, which is greater than 1% of overall TFP. As a result, the IT sector has contributed strongly to TFP growth and the importance of IT industries is increasing in recent years.