New information technology and the knowledge-based economy. The Italian evidence

This work analyses the outcome of the interaction between: 1) the diffusion of new information technologies; 2) their effects on the tradability, divisibility and transportability of information; 3) the growing role of business service industries in the introduction of new technologies; 4) the interaction between receptivity and connectivity of learning agents in the generation of localized technological change based upon both tacit and generic knowledge, and 5) the parallel increase in total factor productivity. The empirical results provide some support, with respect to the Italian economy, to two hypotheses: 1) The co-evolution of usage of business and communication services. Our empirical analysis has shown the strong correlation between the levels and rates of growth in the use of communication and business services. 2) The productivity enhancing effects of the co-evolution in the use of business and communication.