International Journal of Business and Economics Volume 23, No. 1 June, 2024

The Technology Paradox Explained in Stages and Technology Presence

Benjamin Yeo

Seattle University, USA.

Delvin Grant

DePaul University, USA.

Abstract

The technology productivity paradox reflects scholars’ disagreement about the impact of tech investment on productivity. Economic regions are not equal, and cluster theory confirms that regional clusters of specific industry types fuel growth and innovation. Furthermore, the stages of growth theory suggests regions perform differently as they go through different stages. We use U.S. regional economic data from Moody’s Analytics to explain the paradox. The results show regions with a heavy tech presence are better able to leverage tech investment for regional productivity. Furthermore, tech investment impact varies with stages of growth. Our research method enables a richer analysis and improved technology productivity paradox understanding. The findings have implications for managing regional development policy and strategy and tech investment decisions in the U.S. and abroad.

Keywords：Technology Investment, Regional Productivity, Industry Cluster, Regional Development

JEL Classifications：O00, O01, O04

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