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Top1 Introduction
Information technology (IT), synonymous with information and communication technologies (ICTs) and information systems (IS) (Schryen, 2013) have been argued to be catalysts of growth in both developed and developing countries alike (Crowston & Myers, 2004), positively influencing business performance (Bloom et al., 2010; Botello & Pedraza Avella, 2014; Draca et al., 2006; Sivathanu & Pillai, 2019). They are powerful mechanisms for competitive advantages (Schneider & Perry, 2000), resulting in heightened investments in them (Koivunen et al., 2008). Regions that are empowered with a strong IT presence, via high-tech industries, are well positioned for economic growth. In the U.S., technological innovation and assimilation have created a large positive impact on regional economies (Goldschlag & Miranda, 2020). For purposes of this study, being high-tech involves heavy use of IT, and the literature on IT and high-tech industries are reviewed in the same way.
However, the impact of IT on productivity has baffled researchers to date (Liao et al., 2016). When an economy undergoes technological transformation, the impact of IT on productivity is not evident (Brynjolfsson et al., 2019), particularly at the industry level of analysis, unlike similar studies at the individual and firm levels (Schryen, 2013). This makes it difficult to justify IT investments at firm and regional levels. The first reason for the lack of evidence is false optimism, whereby there are unrealistic expectations of new technologies (Brynjolfsson et al., 2019). Related to this, a second reason is there are impact lags that should be acknowledged (Liao et al., 2016; Oz, 2005) because there are periods of learning and adjustment (Brynjolfsson et al., 2019). Hence, the optimistic expectations may not be immediately realised, requiring a period of time before harvesting returns. Third, measurement of this impact is not straightforward and often difficult to measure directly, even though the impact exists (Mokyr, 2014). Studies on the impact of IT also vary in results over time (Kossaï & Piget, 2014), suggesting the importance of the time element in measurement. Finally, the impact of new technologies may not be equally distributed to everyone. The range of performance differences between the best and worst in an industry has widened over the years (McAfee & Brynjolfsson, 2008), suggesting a small segment of a population may be reaping its benefits (Brynjolfsson et al., 2019). Furthermore, there is a lack of industry-oriented IT impact research (Crowston & Myers, 2004).
Taken together, the objective of this exploratory, empirical study is to explain the impact of IT over time. It is a macro level study that investigates the economic impact of high-tech industries to assess trends of their importance to regional economic performance. The study attempts to address the aforementioned reasons for the lack of clear evidence on IT impact. It assesses its impact over 26 years (1990 to 2016) across all regions in the U.S. using consistent measurements. While there are studies on IT impact, those documenting impact trends over a long period are lacking. The following is the research question. In this study, high-tech industries correspond to IT at the industry level and the resultant regional economic performance reflects the impact of IT.