Fact of the Week: In Mexican Manufacturing Firms, Increasing the Share of Workers Using Computers by 10 Percent Raises Productivity by 17 Percent

Information technology powers firm productivity growth, and as transitioning economies develop more sophisticated statistical agencies they can measure the phenomenon with greater accuracy. Such is the case in Mexico where a new World Bank analysis of manufacturing firms’ IT adoption adds to the growing pile of empirical evidence on IT’s productivity impact.

This analysis used data from the 2008 and 2013 Mexican economic census and found that in the average Mexican manufacturing firm productivity rose 17 percent each time the share of workers using computers increased by 10 percent. Unfortunately, the researchers also found that, on average, there was no change in IT adoption among Mexican manufacturing firms from 2008 to 2013—only 28 percent of all Mexican manufacturing workers use computers in their work, and only 26 percent use the Internet. The economic evidence is clear that increasing IT adoption would raise firm performance, but it’s less clear why that isn’t happening.