Is investment really booming?

THE changes to today's world economy are truly revolutionary. While many people get excited about the latest model of smartphone or other technological leap forward, economists do not. For an economist, it is the way technology changes society and the structure of the economy that is the exciting story.

The growth of e-commerce in business has been dramatic. In the United States, manufacturing sales using e-commerce were below 20 per cent of total sales in 2000. Today they are over 60 per cent of total sales.

However, there is something very odd going on in the data. More and more of what companies do is dependent on Internet-based and other electronic ordering. At the same time, US companies are dedicating less and less of their investment spending to computers, and not increasing their spending on software.