Video/Management and IT are the Factors Hampering Productivity in Southern Europe
In the last 20 years productivity has grown less in southern Europe than in northern Europe and the US and in this video Tom Georges Schmitz of the Department of Economics explains how research of his shows that one vital factor for this has been the impact of IT. In southern Europe IT is in fact used less by companies and they also benefit less from its use than companies in Northern Europe and the US. And Schmitz explains that the underlying cause for this is that to use IT efficiently companies need to be efficiently managed and organised and southern Europe firms score worse on this. Less efficient use of IT due to less efficient management he says accounts in fact for 1/3 of the divergence in productivity between Italy and Germany. And the divergence in productivity also grows because northern Europe has benefitted more from IT and so wages have risen and it has attracted high-skilled workers from southern Europe. And simply subsidising IT is not sufficient, it is the question of inefficient management that needs to be addressed, so as to take full advantage of new technologies.