Information and communication technologies (ICT) are considered a general-purpose technology. Until the mid-1990s, however, the economic impact of ICT diffusion seemed small. This perspective underlies Solow’s famous (1987) observation that ‘we see computers everywhere except in the statistics on productivity growth’. In the second half of the 1990s, opinions began to change as several studies pointed to the important contribution of ICT to the resurgence of GDP and productivity growth in the United States. Nevertheless, several analysts questioned whether ICT would have a similar positive impact in countries with different structural features than the US economy.
This questioning inspired the construction of a research agenda on the impact of ICT diffusion in various countries around the world. This chapter contributes to this agenda by analysing the impact of ICT diffusion on the Brazilian economy. We develop and apply an input–output (hereafter IO) methodology, which involved the following tasks: 1. updating the last official IO matrix available (IBGE,1 1996) with partial information from the Brazilian System of National Accounts (mainly from the 2003 make-and-use tables); disaggregating the IO matrix obtained in order to isolate the ICTproducing sectors; and developing a dynamic IO simulation model to analyse the future impact of different ICT-diffusion scenarios on the Brazilian economy. 2. 3.