Information technology, efficiency, and productivity growth in the Japanese manufacturing and non-manufacturing sectors

The purpose of this paper is to make a quantitative analysis of the impacts of informatization. The Information Equipment Ratio is defined as an index to show the progress of informatization, and its impacts on the amount of Value-added per Employee (Labor Productivity) is analyzed and examined for each sector using growth accounting and DEA (Data Envelopment Analysis). The results show that the contribution of Information Equipment in the 1990s declined compared to that of the second half of the 1980s, and that significant slack is seen in the Information Equipment Ratio and in Employees with a college degree or above in the 1990s. This fact suggests strongly that the non-production sector of Japanese business is unable to make effective use of Information Equipment.