Concerns about an IT "productivity paradox" were raised in the late 1980s. Over a decade of research since then has substantially improved our understanding of the relationship between IT and economic performance. The firm-level studies in particular suggest that, rather than being paradoxically unproductive, computers have had an impact on economic growth that is disproportionately large compared to their share of capital stock or investment, and that this impact is likely to grow further in coming years.

In particular, both case studies and econometric work point to organizational complements such as new business processes, new skills, and new organizational and industry structures as a major driver of the contribution of IT. These complementary investments, and the resulting assets, may be as much as an order of magnitude larger than the investments in the computer technology itself. However, they go largely uncounted in our national accounts, suggesting that computers have made a much larger real contribution to the economy than previously believed.

The use of firm-level data has cast a brighter light on the black box of production in the increasingly IT-based economy. The outcome has been a better understanding of the key inputs, including complementary organizational assets, as well as the key outputs including the growing roles of new products, new services, quality, variety, timeliness, and convenience. Measuring the intangible components of complementary systems will never be easy. But if researchers and business managers recognize the importance of the intangible costs and benefits of computers and undertake to evaluate them, a more precise assessment of these assets needn't be beyond computation.

Inventing the Organizations of the 21st Century
Inventing the Organizations of the 21st Century
ISBN: 026263273X
EAN: 2147483647
Year: 2005
Pages: 214
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