[10] ICT Infrastructure - the Regional Dimension

ICT is at the core of economic development policies. ICT's share of capital stock has been on the rise throughout the 1990s - even with the dot-com bubble bursting, investment and the application of ICT is still growing. However, ICT expenditures vary across Europe. Sweden and the UK lead with about 8% of GDP in 1999, followed by the Netherlands, Denmark at around 7% of GDP. France, Germany, Italy and Spain are all grouped around the EU average of 5.6%. However the European average is nearly one third lower than in the US (European Commission, 2001a).

The role of ICT in raising productivity levels is much debated and is now referred to as the "productivity paradox" - rapid levels of technological innovation with slow gains in productivity growth. However, it is still considered that technology is core to product and process innovation and the diffusion of innovation and technology transfer are related to new firm formation and regional growth and development.

ICT technologies are most effective when associated with organisational change, improvements in the skills and education of the labour force, and as a condition encouraging innovation. An example of the benefits of ICT and economic development in this context is the role of ICT in the development and support of SMEs. The uptake, use and access of ICT infrastructure as briefly described here only relates to the supply side; BISER will attempt to develop a range of indicators or indices that will also capture the demand side.

The demand for ICT technologies (including applications) and infrastructure remains a much sought after measurement - this will provide insight in to the market demand for a range of public and private services, a better understanding of which would greatly help the development and roll-out of ICT across Europe. Capturing "use" data will go part way to understanding the geography of demand for e-government and private sector services.