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This paper develops a model of the growth of information systems expenditures in the United States. The model incorporates two major factors that influence the rate and pattern of spending growth—the diffusion of technological innovation and the effect of price on the demand for computing. Traditional studies have focused on the role of innovation while ignoring the effects of price on the growth process. We show that while information systems expenses initially grew following an S-curve, more recent growth has converged to an exponential pattern. These patterns are consistent with our integrative price-adjusted S-curve growth model.
Gurbaxani et al. (Thu,) studied this question.