《Federico Etro-2016-The Economic Impact of Cloud Computing on Business Creation》.pdfVIP

The Economic Impact of Cloud Computing on Business Creation, Employment and Output in Europe Federico Etro∗ Key Words: Cloud computing, Utility computing, General purpose technology, Endogenous market structures First version: December 10, 2008 Current version: May 1, 2009 forthcoming on Review of Business and Economics Abstract Cloud computing is a new general purpose Internet-based technology through which information is stored in servers and provided as a service and on-demand to clients. Adopting the endogenous market structures approach to macroeconomics, we analyze the economic impact of its gradual introduction in the next years and we em- phasize its role in fostering business creation and competition thanks to the reduction of the fixed costs of entry in ICT capital. Our calculations based on a DSGE model show a significative impact for the European Union with the creation of a few hundred thousands new SMEs. Governments could enhance these benefits by subsidizing the adoption of cloud computing solutions. ∗University of Milan, Bicocca, Department of Economics. Piazza dell’Ateneo Nuovo 1, 20126, Building U6, Office 360. Email: federico.etroatunimib.it. I am extremely grateful to Andrea Colciago for outstanding research assistance on the simulations and to Sara Pancotti for data analysis. 1 1 Introduction The introduction of a general purpose technology can provide a fundamental contribution to promote growth and competition,1 and it can help the economy to recover from a severe downturn as the current one. In this article we employ the endogenous market structures approach (Etro, 2007a, 2009)2 to study the