Do Computers Call for Training? Firm-level Evidence on Complementarities Between ICT and Human Capital Investments

Abstract

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0320.pdfDas Papier entstand im Rahmen des Forschungsprojekts "Produktivitäts-und Spillovereffekte von IKT als General Purpose Technology" im Auftrag der Landesstiftung Baden-Württemberg.The paper was written as part of the research project "Productivity and Spillover Effects of ICT as a Gerneral Purpose Technology" commissioned by the Landesstiftung Baden-Württemberg foundation. Non-technical summaryOver the last decades, the continuously falling prices of information and communication technologies (ICT) have been spurring the demand for computers and networks. The successful implementation of ICT, however, is anything but trivial and requires various complementary strategies in order to pay off for firms. This paper explores the role of firm-sponsored training programmes for the productive usage of ICT.Training is important since investments in ICT are often complemented by changes in the contents and the organisation of workplaces in firms. Computers and networks increasingly allow workers to share access to databases, to inter connect their workplaces and to co-ordinate business processes with suppliers and clients. On the other hand, rather standardised subtasks are increasingly done by computers. These changes in the composition of work tasks require a continuous updating of worker's skills. Many of these adjustments refer to firm-specific skills that are conveyed in training measures.The empirical link between investments in ICT and training is explored for more than 1200 German firms in business-related and distribution services for the years 1994 to 1998. The study finds broad evidence that firms complement ICT investments by training programmes for their employees. Training and ICT investments are highly correlated even if varying firm characteristics like industry and size, among others, are taken into account.Instead of reflecting productivity gains from synergies, the high correlation of ICT and training expenditures may be due to other factors, like particular rewarding schemes for employees or common trends in management practices. A more detailed analysis of productivity contributions invalidates such objections. The employed econometric approach controls for various interfering factors that may bias the assessment of productivity contributions. Moreover, the analysis explicitly takes into account potential time lags between the time of investments and the resulting productivity effects.The results from the productiv...

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