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Information technology (IT) is integral to U.S. economic growth. From 2010 to 2016, the U.S. economy expanded by $2 trillion dollars, or approximately 13 percent. Economists Maya Eden and Paul Gaggl estimate that of this $2 trillion dollars’ worth of growth, 35 percent (about $700 billion) can be accounted for by capital investments in IT.
IT raises labor productivity, and thereby growth, in two main ways: In some cases, it automates routine tasks (i.e., robots on the production line), allowing firms to produce more output with fewer workers. In other cases, it augments workers’ productivity (i.e., workers equipped with smart phones), so the same number of people can produce more.