In the year 1990 though, the usage of ICTs per se that had not been that established
and therefore the investment in respective technologies—at least compared to recent
years—had been rather low. In particular the countries observed in this study are most
similar in their development in those years, at least considering the available time
frame. Therefore, in the following study the base year is 1990.
Nevertheless, when choosing 1990 the two problems remain that need to be kept in
mind when interpreting the resulting data. In 1990 the telecommunication market and
thereby large parts of the ICT market at least in Germany, as well as in European and non-
European countries like China and India, were still publicly owned or at the least highly
regulated so that 1990 might not stand for a sectoral and general equilibrium. Addition-
ally, in 1990 the overall ICT infrastructure in many parts of the industrialized world were
still in a modest stage of development (with the possible exception of the Scandinavian
countries). The scope for continuous growth was related to GDP per capita growth and
product innovations as well as process innovations; the EU orchestrated liberalization of
fixed line telecommunications markets in the EU in 1998—the UK had already opened
up in 1984 within a national liberalization approach—is likely to have stimulated
innovation dynamics as well as to have facilitated the exploitation of static and dynamic
scale economies. One cannot rule out that ICT network effects are observed only once a
certain threshold level of digital development of the economy has been achieved.