The Effect Of Advance And Diffusion In Information Technology On Economic Growth And Employment

With the advent of the information age, the advance and the diffusion ofinformation technology have become an increasingly prominent role in the nationaleconomy.Now the effect which information technology has on the economic growthand employment is a hot research.To begin with，this paper is on the review of domestic and foreign scholarliterature on the relationship between information technology and economic growthor employment, making qualitative research on information industry of our countryand calculating the direct contribution and growth contribution of China’s informationindustry in GDP.Next, this paper takes Jilin Province as an example to do the empirical researchon the relationship between the development of information technology and economicgrowth, embarking from the economic growth theory and using Cobb-Douglasproduction function in which we introduce information technology and human capitalfactors. The results show that，during1992to2011，the sum of the output elasticitycoefficient is greater than1, which means development of the economy is increasingreturns to scale，IT output elasticity is0.1290, which indicates information technologyhas a significant positive effect on economic growth.Comparing the ratio andcontribution share in the growth of four inputs to GDP growth, we find theinformation technology output elasticity is relatively small, but the contribution toeconomic growth is relatively large.It plays a larger role in boosting economy.Compared with other provinces of the Northeast, we find that information technologyof Jilin Province, Liaoning Province and the nation all has a positive impact oneconomic growth. The information technology industry in Jilin Province is gradually growing and become great potential for development.Finally， there is an empirical research on the relationship between thedevelopment of information technology and employment. We do empirical researchabout the advances in information technology on the Capital-Labor ratio, exploringthe elements preference of information technology investment， so as to revealelements trend and technology path during the information technology progress stage.We can conclude from the study the impact of information technology onemployment that the Capital-Labor elasticity of per capita IT is-0.252.It means thatwhen per capita information technology increases by1%, the Capital-Labor ratiodecreases by0.252%. We also conclude that in1992-2011, the InformationTechnology of Jilin Province is a Labor-Intensive technique, and economic growth ofJilin Province is on the path of capital savings. The development of informationtechnology makes the high capital investment rate corresponding to lead to higherdemand for labor, which increases total employment of Jilin Province, promotes therestructuring of the labor force and solves the problem of the transfer of rural surpluslabor force.