‘Digital divide’ among European entrepreneurs: Which types benefit most from ICT implementation?

Abstract

This paper explores the extent to which information and communication technology (ICT) is used by different types of self-employed individuals and how it affects their earnings. We investigate independent own-account workers (IOA), self-employed with employees (SEwE) and dependent self-employed workers (DSEW). Using recent survey data for 35 European countries, we find that earnings rise with the level of ICT use but only from a threshold of utilisation accounting for at least 25 per cent of the time. Moreover, we find that the increase in earnings associated with ICT adoption and usage is larger for SEwE types when compared to both IOA and DSEW. Finally, we find an indirect negative inertia effect of job tenure (i.e., entrepreneurs who have been running their business for a relatively long period of time) on earnings (via low ICT adoption and use). Policy implications are also discussed.