How ICT Investment and Energy Use Influence the Productivity of Korean Industries

How ICT Investment and Energy Use Influence the Productivity of Korean Industries
Author: Nabaz T. Khayyat
Publisher:
Total Pages: 36
Release: 2015
Genre:
ISBN:

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This empirical study examines changes in industrial productivity in Korea between 1980 and 2009, focusing on how investment in information and communication technology (ICT) and energy use, influence productivity levels. A dynamic factor demand model is applied in order to link inter-temporal production decisions by explicitly recognizing that the level of certain factors of production cannot be changed without incurring so-called adjustment costs, defined in terms of forgone output from current production. In particular, we investigate how the ICT-energy relationship affects total factor productivity growth in 30 industrial sectors. Describing industry-specific productivity levels is important for policymakers when the allocation of public investment and support is limited.The results presented herein show that ICT/non-ICT capital investment are substitutes for labor and energy use. We also find a high output growth rate in the sampled sectors, and increasing returns to scale, whose effects on the TFP component are higher than those of technological progress.

ICT Investment for Energy Use in the Industrial Sectors

ICT Investment for Energy Use in the Industrial Sectors
Author: Nabaz T. Khayyat
Publisher: Springer
Total Pages: 174
Release: 2017-06-20
Genre: Technology & Engineering
ISBN: 9811047561

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This book investigates the impact of production input factors on the market, consumer and producer energy demand characteristics in 30 industrial sectors for South Korea over the period 1980–2009, and for Japan over the period 1973-2006, with special emphasis placed on the effects of ICT investment on the demand for energy. A dynamic factor demand model is developed, accounting for the adjustment costs that are defined in terms of forgone output from current production. It addresses four key aspects of production and energy demand in manufacturing: first, it establishes the various relationships between different factors of production. Second, it investigates whether the energy demand in the industrial sectors in South Korea would be decreased or increased by substituting/complementing with other input factors such as ICT capital and labor. Third, it looks at sources of growth in the industrial sectors through decomposing the Divisia index based total factor productivity (TFP). Finally it provides appropriate policy recommendations based on these findings. The results of this study may provide industrial sectors’ stakeholders and environmental and industrial policy makers with a flexible model that has the capacity to assess outcomes of various policies under certain scenarios. The factor demand methodology described in this book is very advanced and up-to-date. It can be used when teaching advanced graduate courses and in empirically advanced research. Therefore, it is highly relevant in both teaching as a main or supplementary text and in particular as a reference handbook in conducting empirical research. The focus on ICT effects on energy use makes this book an important addition to the existing literature on industrial development.

Production Risk, Energy Use Efficiency and Productivity of Korean Industries

Production Risk, Energy Use Efficiency and Productivity of Korean Industries
Author: Nabaz T. Khayyat
Publisher:
Total Pages: 28
Release: 2014
Genre:
ISBN:

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Korea imports all of its primary energy, which leads to high dependency and vulnerability related to its energy supply. Efficiency in the use of energy is a way to reduce dependency and emissions. This study provides empirical results of the stochastic production process in energy use. Special attention is given to the factors that increase the risk or variation of using more of the energy input in production. A dynamic panel model is specified and applied to 25 Korean industrial sectors over the period 1970-2007. The determinants of energy use are identified and their effects in the form of elasticities of energy use are estimated. Stochastic production technology is applied to estimate an energy demand model based on an inverted factor demand. The findings reveal that: first, there are large variations in the degree of overuse or inefficiency in energy use among the individual industries as well as over time; second, information and communication technology (ICT) capital and labor are substituting for energy; and third, ICT capital input decreases the variability of energy demand while non-ICT capital, material and labor increase the variability of energy demand. The results suggest that technical progress contributes more to the increase in the mean energy demand than to the reduction in the level of risk. It is recommended that industries increase their level of ICT capital as well as digitalize and invest more in R&D activities and value added services to reduce the uncertainty related to their demand for energy.

Energy Demand in Industry

Energy Demand in Industry
Author: Nabaz T Khayyat
Publisher: Springer
Total Pages: 206
Release: 2015-08-07
Genre: Technology & Engineering
ISBN: 9401799539

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The book presents a stochastic analysis based on production risk and application of this method in the industrial sector under production risk where energy use is an input factor. Using South Korea as a case study, the book empirically models energy demand at the industrial level and analyzes the results to identify key determinants of energy demand, productions level, productions risk and energy usage efficiency. Particular attention is paid to the factors that enhance production risk or increase variations in energy input during production. A dynamic panel model is specified and applied to 25 Korean industrial sectors over the period 1970-2007. The determinants of energy usage are identified and their effects in the form of elasticities of energy usage are estimated. In addition the structural changes in the energy demand pattern are explored. Stochastic production technology is applied to create two primary models: A production model where the energy usage is a determinant of output and an energy demand model based on an inverted factor demand model where demand is a key determinant of the level of energy usage. The findings reveal that: First, there are large variations in the degree of overuse or inefficiency in energy usage among the individual industries and over time; second, ICT (information and communication technology) capital and labor are substituting energy; third, ICT capital and value added services are two input factors decreasing the variability of energy demand while non-ICT capital, material and labor are increasing the variability of energy demand. Finally, the results suggest that technical progress contributes more to the increase of mean of energy demand than to the reduction of the level of risk. An emerging recommendation is that industries increase the level of ICT capital and digitalization and invest more in R&D activities and value added services to reduce the uncertainty related to their demand for energy. This study forms the structure of the demand for energy under stochastic production risk for the South Korean industrial sector. Public research programs aimed at the industrial sector should be concerned about both mean and risk properties in research on new technologies and in the investigation of possible alternative energy inputs. This book describes the state of the art in energy usage analysis and production risk, applying factor requirement methodology. It will be of use as a main or supplementary text in the teaching of advanced graduate courses but also as a reference for those working on empirically advanced research. The book is an important addition to the existing literature on industrial development, with its focus on energy as a core production input.

ICTs in Developing Countries

ICTs in Developing Countries
Author: Bidit Dey
Publisher: Springer
Total Pages: 147
Release: 2016-01-26
Genre: Business & Economics
ISBN: 1137469501

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ICTs in Developing Countries is a collection of conceptual and empirical works on the adoption and impacts of ICT use in developing societies. Bringing together a wide range of disciplines and contributors, it offers a rich examination of digital divide and ICT for development both in terms of contextual information and disciplinary perspectives.

The Economic Impact of ICT Measurement, Evidence and Implications

The Economic Impact of ICT Measurement, Evidence and Implications
Author: OECD
Publisher: OECD Publishing
Total Pages: 298
Release: 2004-03-09
Genre:
ISBN: 9264026789

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This report provides an overview of the economic impact of ICT on economic performance, and the ways through which it can be measured.

ICTs in Developing Countries

ICTs in Developing Countries
Author: Bidit Dey
Publisher: Palgrave Macmillan
Total Pages: 0
Release: 2014-01-14
Genre: Business & Economics
ISBN: 9781349563203

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ICTs in Developing Countries is a collection of conceptual and empirical works on the adoption and impacts of ICT use in developing societies. Bringing together a wide range of disciplines and contributors, it offers a rich examination of digital divide and ICT for development both in terms of contextual information and disciplinary perspectives.

Transition to Renewable Energy Systems

Transition to Renewable Energy Systems
Author: Detlef Stolten
Publisher: John Wiley & Sons
Total Pages: 882
Release: 2013-05-13
Genre: Science
ISBN: 352767389X

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In this ready reference, top academic researchers, industry players and government officers join forces to develop commercial concepts for the transition from current nuclear or fossil fuel-based energy to renewable energy systems within a limited time span. They take into account the latest science and technology, including an analysis of the feasibility and impact on the environment, economy and society. In so doing, they discuss such complex topics as electrical and gas grids, fossil power plants and energy storage technologies. The contributions also include robust, conceivable and breakthrough technologies that will be viable and implementable by 2020.

Greening Digital in Korea

Greening Digital in Korea
Author: World Bank
Publisher:
Total Pages: 0
Release: 2022
Genre:
ISBN:

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Digital technologies are making a significant impact on societies, economies, and the physical world, presenting both opportunities and challenges for the green agenda. Applications of these technologies in sectors such as energy, urban, transport, and agriculture are creating new possibilities for climate change mitigation strategies. However, the rapid expansion of digital technologies increases energy usage too, and is therefore also increasing greenhouse gas (GHG) emissions. In seeking to address these challenges, the World Bank's Digital Development Global Practice (DD) will publish a flagship report on Digital Development Opportunities for Climate Change, which will assess opportunities for greening with information communication technology (ICT), as well as opportunities for greening the ICT sector itself. To inspire and inform this flagship report, DD studied Korea's experience in greening its ICT sector, with support from the Korean Green Growth Trust Fund. The Republic of Korea was selected for the case study due to its experience in both the digital and green sectors, and its status as a globally recognized ICT powerhouse. The country was also an early adopter of a green policy agenda, and is integrating DNA (data, network, and AI) into these policies. The government announced a national policy vision of "Low Carbon, Green Growth" in 2008 and has taken concrete steps to build a solid foundation for the green transition, through legislation, standardization, information-based instruments, economic instruments, research and development (R&D), and green procurement. More recently, the country has been aligning its green ICT strategy with the broader national GHG reduction target. Korea's experience can offer meaningful lessons to other countries looking to reduce the ICT sector's climate impact. It shows that public policies have an important impact on the ICT market. The policy tools that can spur decarbonization of the ICT sector include green government procurement, information-based instruments, economic instruments, and provision of guidelines on green business practices. Keys to success in applying such tools include strong and early political commitment; long-term planning and comprehensive policies; prioritization; research and development (R&D) and investment; and a governance structure that allows a whole-of-government approach. Additionally, Korea's experience shows that renewable energy will play an increasingly important role in reducing GHG emissions from the energy-intensive ICT industry. Korea's experience also underscores the fact that more evidence and analysis are needed to measure and determine the effectiveness of policy and regulatory pathways for greening the ICT sector.