The answer will shock everyone and possibly push everyone into a denial mode.  As such, this article will keep the answer for a while and start from the basics and work its way to the answer so that everyone has time to challenge the observations and assumptions made.  What is IT based?  Information technology is a general term to encompass digitization of activities and it does not refer to any particular type of activity.   For example, our computer accounting system is IT based.  Automatic passport check in at the Auckland International Airport is IT based.  Toll charging for State Highway One between Orewa and Puhoi is IT based.  All websites and emailing are IT based.  The next issue to examine is how IT is different to Non-IT.  Let us say that all physical activities are Non-IT.  Couriering a PC from Auckland to Wellington is Non-IT, but scanning of the courier ticket is IT.  Dining out in Wynyard Quarter is Non-IT, but the transmission of our meal orders to the kitchen and the checkout counter is IT.  Building a house is non-IT, but the design of the house and production of the bill of materials from an AutoCAD software package is IT. 

Non-IT refers to physical and manual activities, and it does include some automatic activities such as the automatic gear change of our vehicles but the level of automation is localized, limited, and not digital.  IT refers to some processes that are less visible to human eyes such as computing and signal transmission and processing.  The demarcation between IT and Non-IT may not be a fine line but they can certainly be differentiated.  The challenge is to note that some activities will change from Non-IT to IT based over time. 

Now let us look at the USA which is a well developed country with almost everything well documented and quantified.  The next few sentences in italics are extracted from an article authored by Brain Arthur and published on http://www.mckinsey.com/.

Since 1995, when digitization really started to kick in, labour productivity (output per hours worked) in the United States has grown at some 2.5 to 3 percent annually, with ups and downs along the way. No one knows precisely how much of this growth is due to the uses of information technology (some economists think that standard measurements underestimate this); but pretty good studies assign some 65 to 100 percent of productivity growth to digitization.

The information is in line with what we have read from Alan Greenspan who was the last Federal Reserve Bank Governor of the USA for nearly 20 years.  Greenspan did say that the growth of the American economy was largely driven by IT.  Let us safely assume that IT has contributed to 2.4% of the annual increase in the productivity of the overall economy.  This figure is not huge but if we keep multiplying 1.024 by 1.024 30 times over, we will get 2.   This means productivity will be doubled in 30 years.  The IT based economy will be as big as the traditional economy by 2025, which is only 14 years away.  If we think the impact of IT on our economy does not look that significant, we can be forgiven because IT is well woven with Non-IT.  Suppose we have accepted the trust-worthiness of the above narration, we may ask “so what?” If we are running a business, we must make sure that we capitalize on IT so that it increases our productivity by no less than 2.4% per year.  That is, we are able to do 2.4% more of business for the same cost every year.  This is only a median performance increase and we should do better!