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    Group7 SecB The Productivity Paradox

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    niraj
    The document discusses the productivity paradox of information technology. It notes that while IT investments have increased dramatically, measures of productivity at both the economy-wide level and for information workers have not increased as expected. There are several potential explanations for this paradox, including mismeasurement of outputs and inputs, lags in realizing benefits due to learning and adjustment, redistribution rather than increase of profits, and mismanagement of information and technology. Moving forward, researchers need to improve measurement tools and rethink how productivity and output are assessed, especially in information-intensive industries, in order to better understand the value and impact of large IT investments.

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    Group7 SecB The Productivity Paradox

    Uploaded by

    niraj
    67 views8 pages
    The document discusses the productivity paradox of information technology. It notes that while IT investments have increased dramatically, measures of productivity at both the economy-wide level and for information workers have not increased as expected. There are several potential explanations for this paradox, including mismeasurement of outputs and inputs, lags in realizing benefits due to learning and adjustment, redistribution rather than increase of profits, and mismanagement of information and technology. Moving forward, researchers need to improve measurement tools and rethink how productivity and output are assessed, especially in information-intensive industries, in order to better understand the value and impact of large IT investments.

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    Group7 SecB the Productivity Paradox

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    The document discusses the productivity paradox of information technology. It notes that while IT investments have increased dramatically, measures of productivity at both the economy-wide level and for information workers have not increased as expected. There are several potential explanations for this paradox, including mismeasurement of outputs and inputs, lags in realizing benefits due to learning and adjustment, redistribution rather than increase of profits, and mismanagement of information and technology. Moving forward, researchers need to improve measurement tools and rethink how productivity and output are assessed, especially in information-intensive industries, in order to better understand the value and impact of large IT investments.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    67 views8 pages

    Group7 SecB The Productivity Paradox

    Uploaded by

    niraj
    The document discusses the productivity paradox of information technology. It notes that while IT investments have increased dramatically, measures of productivity at both the economy-wide level and for information workers have not increased as expected. There are several potential explanations for this paradox, including mismeasurement of outputs and inputs, lags in realizing benefits due to learning and adjustment, redistribution rather than increase of profits, and mismanagement of information and technology. Moving forward, researchers need to improve measurement tools and rethink how productivity and output are assessed, especially in information-intensive industries, in order to better understand the value and impact of large IT investments.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    The Productivity Paradox

    of Information Technology Group 7- Section B

    Deepali Gupta
    Deepti Yadav
    Neha Khairwal
    Tasya Katiyar
    2 DIMENSIONS OF THE PARADOX

    • Productivity is the fundamental economic measure of a technology's contribution


    • The lack of good quantitative measures for the output and value created by IT has made the
    MIS manager's job of justifying investments particularly difficult
    • Disappointment in IT has been chronicled in articles disclosing broad negative correlations
    with economy wide productivity and information worker productivity
    • Econometric estimates have also in dicated low IT capital productivity in a variety of
    manufacturing and service industries
    3 1. ECONOMY WIDE PRODUCTIVITY AND THE
    INFORMATION WORKER
    Issue:
    • Productivity slowdown in the last decade

    • Sharp drop in productivity roughly coincided with the rapid increase in the use of IT
    • Output per production worker grew by 16.9% between the mid-1970s and 1986, while output per
    information worker decreased by 6.6%
    Comment:
     Alarming correlation between higher IT spending and lower productivity at the level of the entire U.S.
    economy is not compelling because so many other factors affect productivity

     The increase in the number of white-collar workers is evidence of in increase , not a decrease, in their
    relative productivity and in the firm’s productivity as well
    4 2. THE PRODUCTIVITY OF IT CAPITAL IN
    MANUFACTURING

    There have been 6 studies


    of IT productivity in the
    manufacturing sector
    shown in the the adjacent
    table along with the
    findings
    5 3. THE PRODUCTIVITY OF IT CAPITAL IN SERVICES

    Multiple studies have tried to assess IT


    productivity in service sector as shown
    here
    6 FOUR EXPLANATIONS FOR THE PARADOX

    1. Mismeasurement of outputs and inputs

    2. Lags due to learning and adjustment

    3. Redistribution and dissipation of profits

    4. Mismanagement of information and technology


    7 CONCLUSION

    Where Do we Go From Here?

    • Researchers must not overlook that fact that our tools are still "blunt.“
    • If the value of IT has not yet been widely documented—the one certainty is that the measurement problem is
    becoming more severe.
    • Developed nations are devoting increasing shares of their economies to service and information- intensive
    activities for which output measures are poor
    • The comparison of the emerging "information age" to the industrial revolution has prompted a new approach to
    management accounting
    • A review of the IT productivity research indicates an analogous opportunity to rethink the way productivity and
    output are measured
    • Research on IT and productivity has been disappointing, not only because it has only exacerbated apprehension
    about the ultimate value of billions of dollars of IT investment, but also because it has raised frustrating concerns
    with the measures and methods commonly used for productivity assessment
    8

    Thank you

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