Information and Communication Technology (ICT) Adoption and Utilisation, Skill Constraints and Firm- Level Performance: Evidence from UK Benchmarking Surveys

In the context of the skill-biased technological revolution associated with Information and Communication Technologies (ICTs), firms with relatively high (low) proportions of skilled workers can be expected to have a comparative advantage (disadvantage) in minimising the costs both of ICT adoption and of learning how to make best use of ICTs. In this paper we make use of benchmarking survey data for UK enterprises between 1997-99, combined with post-survey financial data for the same enterprises, in order to assess the impact of ICT skill constraints on financial performance at firm level. The results provide clear evidence that ICT skill constraints have an indirect negative impact on firm performance as a result of the restrictions that such skill deficiencies place on ICT adoption and on the intensity of use of ICTs (once they have been installed). However, there is only weak evidence of skill constraints impinging directly on firm performance at given levels of ICT adoption and utilisation.