The Four Ways It Is Revolutionizing Innovation
SPRING 2010
V O L . 5 1 N O. 3
Interview with Erik Brynjolfsson
The Four Ways IT Is Revolutionizing Innovation
Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the article appears as originally published.
REPRINT NUMBER 51330
I T - D R I V E N I N N O VAT I O N
The FourWays IT Is Revolutionizing Innovation
MIT Sloan School of Management economist and digital business expert Erik Brynjolfsson tells how the rising data flood and the emerging tools for analyzing it are changing the ways innovation gets done.
INTERVIEW BY MICHAEL S. HOPKINS
THE LEADING QUESTION
How are IT advances changing innovation?
FINDINGS
Tech advances aren’t just innovations in themselves, they’re enabling a new process for innovating. The real power is combining these new innovation processes — measurement, experimentation, sharing and replication — in sequence. Leading companies using business analytics have faster cycle times, more flexibility and a higher metabolism for processing information.
THERE’S ALWAYS BEEN a performance gap between companies that embrace technology and companies that resist it — what IT innovation thinker Erik Brynjolfsson calls the productivity gap between “leaders and laggers.” What’s new, though, is that while the gap was fairly steady for decades, in 1995 it suddenly started to widen — and is widening still. Credit the rise of systems like enterprise resource planning, the expanding use of the Internet and the fact that every dollar buys incrementally more computerization. Brynjolfsson found not only that the leadervs.-lagger gap has grown in the past decade but also that it has grown the most in IT-intensive industries. Why? Because the leaders are capitalizing on technology advances to pioneer a whole new innovation paradigm, based on the ways they measure, experiment with, share and replicate information. In a conversation with MIT Sloan Management Review
V O L . 5 1 N O. 3
Interview with Erik Brynjolfsson
The Four Ways IT Is Revolutionizing Innovation
Please note that gray areas reflect artwork that has been intentionally removed. The substantive content of the article appears as originally published.
REPRINT NUMBER 51330
I T - D R I V E N I N N O VAT I O N
The FourWays IT Is Revolutionizing Innovation
MIT Sloan School of Management economist and digital business expert Erik Brynjolfsson tells how the rising data flood and the emerging tools for analyzing it are changing the ways innovation gets done.
INTERVIEW BY MICHAEL S. HOPKINS
THE LEADING QUESTION
How are IT advances changing innovation?
FINDINGS
Tech advances aren’t just innovations in themselves, they’re enabling a new process for innovating. The real power is combining these new innovation processes — measurement, experimentation, sharing and replication — in sequence. Leading companies using business analytics have faster cycle times, more flexibility and a higher metabolism for processing information.
THERE’S ALWAYS BEEN a performance gap between companies that embrace technology and companies that resist it — what IT innovation thinker Erik Brynjolfsson calls the productivity gap between “leaders and laggers.” What’s new, though, is that while the gap was fairly steady for decades, in 1995 it suddenly started to widen — and is widening still. Credit the rise of systems like enterprise resource planning, the expanding use of the Internet and the fact that every dollar buys incrementally more computerization. Brynjolfsson found not only that the leadervs.-lagger gap has grown in the past decade but also that it has grown the most in IT-intensive industries. Why? Because the leaders are capitalizing on technology advances to pioneer a whole new innovation paradigm, based on the ways they measure, experiment with, share and replicate information. In a conversation with MIT Sloan Management Review