How does Information and Communication Technology affect the Economy?

It allows the economy to grow by reducing the transaction costs. Transaction costs are the costs incurred for making any economic transaction. (eg, if you want to buy a printer, without internet, you would go from store to store, trying to find out the configuration, the problems, etc. You spend fuel and a lot of time on the search. With internet, you gather all this information from home and then go and pick the right one because you have the information that you need). As transaction costs reduce, more transactions can take place. More branches overseas can be easily managed and monitored. It becomes easier to globalize, to reach out to newer and far out markets. So the company thrives; with that the national economy thrives.