Are ICT, Human Capital and Organizational Capital Complementary in Production? Evidence from Italian Panel Data

This report investigates the effect of ICT and complementary assets - organizational change and human capital- on the labour productivity of Italian manufacturing firms. Given its focus, this report is relevant both for the Innovation Policies and the Digital Agenda research lines carried out by the Information Society (IS) Unit at JRC-IPTS in the context of the IDEA Action during the last couple of years. For both research lines, the issue of how ICT could complement organizational change (which is one type of innovative behaviour) and human capital and hence impact on productivity are fundamental issues. In fact, a whole line of research has emerged in the last 10-15 years on the role of ICT as a General Purpose Technology, i.e. a driver of co-inventions or co-innovations (organizational change being one of them, as ICT make new management practices possible and profitable.) The results of this report, which is based on data from Italian manufacturing firms, show that, within this sector, there is no evidence of complementarity between ICT investment and organizational change.