The Effects Of Information And Communication Technology On Output Of National Economy

Science and technology have boomed in the areas such as the atomic energy, electronic computers, microelectronics technology, space technology, molecular biology and genetic engineering since around the 40s and 50s last century. They marked the advent of the third sci-tech revolution. The progress in science and technology is constantly changing people’s life and boosting the national economy. IT and CT becomes increasingly blur-bordered, with the rapid development in science and technology, information and communication technology in the 21st century. At the same time, the integration of three networks is accelerating the development in ICT (Information and Communication Technology) industry. Nowadays, the ICT industry has become the backbone of the national economy while is driving forward the national economy. Governments have also introduced policies to attach strategic importance to the ICT industry. It is evident that information and communication technology have a great influence on the national economy.As ICT and the globalization trend develop, international cooperation is strengthening, the reasonable layout of industry around the world closes nations, and new international organizations have been emerging. Since the ’BRICs’ was first proposed by Jim O’Neil of Goldman Sachs at 2001, Brazil, Russia, India and China have interconnected tightly under the ’BRICs’. Also the development in ICT industry makes the ’BRICs’ appear on the world stage as a whole. South African’s participation in 2010 completes the’BRICs’. This paper does research on the influence information and communication technology has on the output of national economy in depth considering the dynamic panel data in five countries.This paper tries to prove the main perspective in both theoretical and practical ways. First I used economics model of two sections to validate it because economics model of one section can not catch the most splashy feature (a dramatic decrease in the price of ICT products) of industrial economy in modern economics history. I have got the conclusion YICT> Yc in the above-mentioned two section model. That means the national economy output in the countries with ICT outweighs those without ICT, from which we can conclude ICT indeed has a positive impact on the output of national economy. In the empirical section, I have substantiated the relation between ICT and the output of national economy in the BRICS from 2000 to 2012 in a steadily deepening way. First, I resort to ADF unit root test to get a steady analysis in output of national economy. Next, I substantiated the relation between ICT and the output of national economy in the OLS. Finally, I separated the cause and result for ICT and the output of national economy with the system GMM and I came to conclusion that ICT is a main contributing factor in the development in national economy.