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07/10/04
Treasury Report Takes “Rear View Approach” Intellect has today spoken out against HM Treasury’s recently published 'Productivity in the UK 5: Benchmarking UK Productivity Performance' Report. It is perplexed by the Treasury’s failure to recognise the importance of Information Communication Technology (ICT), when around the world there is increasing evidence of countries leveraging ICT investment to drive productivity, improve competitiveness and create growth.
Commenting on the report Beatrice Rogers, the Head of Intellect’s Knowledge Driven Economy Campaign said, “Intellect can not understand how the Treasury has managed to overlook the importance of ICT when our major competitors around the world recognise its impact on productivity. This report highlights once again the Government’s reliance on measurements designed for old economy needs, making it impossible to understand the UK’s progress towards the new knowledge driven economy or to effectively plan policies to support it.”
“The OECD’s 2004 Report, ‘The Economic Impact of ICT: Measurement, Evidence and Implications’, demonstrates that ICT can drive economic growth, can facilitate improved productivity and can develop markets and services. Yet, surprisingly, ‘Productivity in the UK 5: Benchmarking UK Productivity Performance' has failed to recognise the critical importance of ICT infrastructure, or its direct impact on productivity in the UK. Choosing instead to focus solely on the importance of old economy infrastructure investment relating to roads and transport.”
“This may look like an obscure Treasury report, but by ignoring ICT infrastructure the Government has failed to address issues which are central to the productivity agenda. Intellect views this omission as a critical error which, left un checked, will have a negative impact on the UK economy. We reiterate our warning that measurement of the wrong things will result in implementation of the wrong policies, and a UK heading in the wrong direction, and ask Government to recognise the impact of ICT on productivity and growth.”
To help rectify this situation Intellect recently announced the launch of its own ‘Intellect Index’, a framework which will be designed to identify the gaps in Government’s current measurements, and highlight additional ‘new economy’ indicators which Government critically needs to consider. The Index will provide an invaluable insight into Government’s current data gathering practices, and crucially confirm whether current policy development is in line with the UK’s knowledge economy aims, or is in fact working against them. First results are anticipated June 2005.
The Treasury’s report ‘Productivity in the UK 5: Benchmarking UK productivity performance’
The Organisation for Economic Co-operation and Development (OECD) has undertaken a number of studies, including, ‘Seizing the Benefits for ICT in a Digital Economy 2003’ and ‘The Economic Impact of ICT: Measurement, Evidence and Implications’ 2004.
These reports highlight that ICT continues to be an important driver for growth provided the right conditions for growth and innovation are in place. They cite four main areas in which ICT affects economic growth: Through production, through investment and through increased efficiency and innovation.
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