Sustainable Development and Investment in Information Technologies: A Socio-Economic Analysis

The output of investments in Information Systems and Technologies (IST) has been a topic of debate among the IST research community. The “Productivity Paradox of IST Investments” sustains that the investment in IST does not increase productivity. Some researchers showed that developed countries have been having a rather stable and sometimes declining economic growth despite their efforts in Research and Development (R&D). Other researchers argue that there is sound evidence that investments in IST are having impacts on the productivity and competitiveness of countries. This paper analyses the relationship between IST and R&D investments and the global development of countries (not only productivity of countries) using economic, demographic and literacy independent variables that explain global development. The objective is to research whether R&D and IST investments are critical to the productivity and to global development of the countries. Working at a country level, the research used sixteen socio-economic variables during a period of five years (1995-1999). The research methodology included causal forecast, cluster analysis, factor analysis, discriminant analysis and regression analysis. The conclusion confirms the correlation between the Gross National Product (GNP) and R&D and IST investments. The variables illiteracy rate, life expectancy at birth, Software investment as percentage of GNP and number of patents per 1000 inhabitants can explain the development of a country.