Ict - Productivity Parandox
PRODUCTIVITY PARADOX – CRASH OF EXPECTATIONS AND STATISTICS:
What is Productivity Paradox?
Solow computer paradox – Refers to the discrepancy between measures of Information Technology Investment and measures of output at the national level.
Summary:
Despite the massive investments in Information Technology in the developed economies, the IT impact on productivity and business performance continues to be questioned.
The paper critically reviews this IT productivity paradox debate and finds that an important part of the uncertainty about the IT payoff relates to weaknesses in measurement and evaluation practice.
The approach shows how to link business and IT/IS strategies with prioritizing IT investments and by setting up interlinked measures, how IT costs and benefits may be evaluated and managed across the systems lifecycle, including consideration of potential uses of the external IT services market.
An emphasis on a cultural change in evaluation from control through numbers to a focus on quality improvement offers one of the better routes out of the productivity paradox.
Within the Service Sector, delivered computing-power in the US economy has increased since 1970 yet productivity seems to have stagnated.
Within the Manufacturing Sector, Research showed that the reasonable estimates derived from the non-IT factors of production, there may indeed be something worrisome or special about IT.
Trends:
The price of computing has dropped by half every 2-3 years.
There have been increasing levels of business investment in information technology equipment.
Information processing continues to be the principal task undertaken by America’s work force.
Overall productivity has slowed significantly since the early 1970s and measured productivity growth has fallen. White collar productivity statistics have been essentially stagnant for 20 years.
Explanations for the Productivity Paradox:
Measurement Errors
The easiest explanation for the
What is Productivity Paradox?
Solow computer paradox – Refers to the discrepancy between measures of Information Technology Investment and measures of output at the national level.
Summary:
Despite the massive investments in Information Technology in the developed economies, the IT impact on productivity and business performance continues to be questioned.
The paper critically reviews this IT productivity paradox debate and finds that an important part of the uncertainty about the IT payoff relates to weaknesses in measurement and evaluation practice.
The approach shows how to link business and IT/IS strategies with prioritizing IT investments and by setting up interlinked measures, how IT costs and benefits may be evaluated and managed across the systems lifecycle, including consideration of potential uses of the external IT services market.
An emphasis on a cultural change in evaluation from control through numbers to a focus on quality improvement offers one of the better routes out of the productivity paradox.
Within the Service Sector, delivered computing-power in the US economy has increased since 1970 yet productivity seems to have stagnated.
Within the Manufacturing Sector, Research showed that the reasonable estimates derived from the non-IT factors of production, there may indeed be something worrisome or special about IT.
Trends:
The price of computing has dropped by half every 2-3 years.
There have been increasing levels of business investment in information technology equipment.
Information processing continues to be the principal task undertaken by America’s work force.
Overall productivity has slowed significantly since the early 1970s and measured productivity growth has fallen. White collar productivity statistics have been essentially stagnant for 20 years.
Explanations for the Productivity Paradox:
Measurement Errors
The easiest explanation for the
References: A Review of IT and Productivity: A Review of the Literature – Erik Brynjolfsson and Shinkyu Yang