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Economic Impact of Tech Understated, Study Says
narramissic writes "A report (available here) released this week by the Information Technology and Innovation Foundation, a pro-technology think tank, claims that IT was responsible for nearly all of the US worker productivity growth between 1995 and 2002. But the creation of new jobs in IT will be modest, the study says. At a forum in Washington, D.C., the report's co-author and ITIF president Robert Atkinson warned lawmakers that there will be a 'significant cost to the economy if you hinder digital transformation' and called on the government to spur IT adoption in several industries, including health care, banking and transportation." The article also quotes an economist who is skeptical that this report's outsized claims for productivity gains have been proven.
It is also very damaging to the environment.
http://www.rense.com/general79/wdx1.htm
You want to stop hindering the digital transformation? Fine ... fix software patents. It seems like you can't create anything anymore without running into some obvious patent.
The same study done in Iraq found that almost all economic growth in the region from the 5th millennium BC to the 3rd millennium BC can be attributed to the wheel & axle. The Sumerians claimed slave productivity skyrocketed when it was discovered that they could be tied to wheeled carts to haul heavy equipment. Let us bask in the glory of technology!
It is because of the many meeting notices in my Outlook inbox that I am productive--and nothing else!
We've already seen that laws (copyright for instance) have difficulty keeping up with technology. The laws have always been reactive in that regard. Never mind the fact that internet technology can't effectively be legislated against by a single country or entity. I don't think they really have to worry about government hindering the advance of technology. If one government tries to, the advances will just take place somewhere else.
"Always forgive your enemies; nothing annoys them so much." - Oscar Wilde
Life needs more saving throws.
I'm much more productive at viewing pron at work now! No more magazines for me! Hooray for the web!!!!
"a pro-technology think tank, claims that IT was responsible for nearly all of the US worker productivity growth between 1995 and 2002" This changed in 2003 when IT employees found a way to circumvent "Appropriate Workplace Internet Usage" restrictions.
Why are we still in an age where doctors transmit prescription info to pharmacists with a nearly ineligible scrawl? Why are pharmacists still taking classes to learn how to read these? Why is it still possible to administer prescription/hospital medication without a computerized check for excessive dosage, drug interactions, and medical condition interaction. (e.g., "Hey, you just prescripted 20 times the highest typical dosage. You sure about that?")
... computerizing records?
Why does GE's health care division run ads bragging about how the accomplished the insurmountable task of
Why aren't expert-type systems routinely used at doctors' offices?
Why do doctors act like you're Satan if you ask questions based on knowledge you've gathered on the internet about your condition?
I could go on and on. Yes, health care has advanced technologically, but we still have multi-million dollar MRI machines next to doctors communicating by scribble and no clue about how to do CBA's for the whole process.
Apology to Ubuntu forum.
The unwritten statement here that's implied by these sorts of studies is: "spend money on IT, increase productivity".
Which we know is false. IT and computing is squandered everywhere. Huge ERP installations go tits up regularly. Large systems integrators waste gobs of company's cash by running projects with clueless hordes & over-assertive managers that somehow mask that something that should take 3 people x 3 months should take 90 people x 2 years.
It also implies that IT vendors are responsible for the appropriate channeling of IT investment. This is like suggesting that weapons, communication, and transportation manufacturers should have been given credit for the Allied victory in WW2.
Investing - in anything - requires thought and management. It is good management that leads to an increase in productivity. Technology and computing capacity are just a means.
The paper is correct that technology can transform industries and markets, and that is a good source of productivity. But the catch is that there is no correlation between IT spending and transformation. Technology & computing capacity is "necessary but not sufficient" for transformation. Thus, it strikes me as a propaganda piece to squander billions with hardware & global services outsourcing.
A great source is Paul Strassmann's profitability & productivity studies, which he has conducted since the 1980's. He has plotted spending vs. productivity or profitability, in what is the now famous "scatter plot": there is *NO* correlation between IT spending and productivity & profitability. Yes, one CAN gain increases in both of these in concert with IT (witness the work of Toyota's lean approach, or Wal-Mart's data warehouse), but I'd attribute that gain to smart management plus technology over just IT.
-Stu
use a straw
Isnt it fairly obvious that technology is primarily responsible for our increase in productivity? I mean, where else would it come from? It isnt like our generation became more hard working than our parents.
;-)
Computer technology was basically the one thing that changed in the 90s to increase worker productivity. I cannot even think of a number 2 contender. Doing work on computers instead of on paper leads to vast increases in productivity. And we are constantly getting better, even with side tracks such as Vista.
I wonder if I could get money to do obvious studies. I am going to try to find out if having an active sex life makes people happier, or if eating more helps solve hunger.
--
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
IT can't smooth and steamline operations. It can make it possible to do so, but it can't do it by itself.
The types of solutions you're talking about isn't just a matter of dropping in a box, and suddenly everything's more efficient. It requires analysing the business processes, and determine where the issues are (and sometimes more importantly, why they're there).
I can't remember who said it, but they made a statement to the effect of -- technology can only make things go faster; if you have a bad process, it'll just make you fail faster.
I've see technology implemented in such ways that it slowed down the processes, because the system designers didn't understand what was going on. (eg, a switch to online forms, that made the forms more complicated, but they had people print them out, sign them, then fax/mail them in where they were re-entered by hand just as before... only with more fields on it now, some of which had been auto-populated by the online forms system).
The problem that I see is that managers think that some contractor being brought in and being paid $200+/hr knows more about how things work than their own employees do -- contractors who are being paid by the hour, and get paid more if things take too long, or need corrections later, etc. But, when you're making big money, management will listen to you, as opposed to the pool of people doing data entry who just want auto-complete on the system. Management gets sold on compliated new features that may not be useful for their situation. They want the biggest system they can buy, so they brag about it with their (golf|fishing|whatever) buddies.
As for the MBAs -- there are a few alternate management degrees out there that stress technology -- Master of Engineering Management; Master of Information Systems; Master of Information Management, etc.
Build it, and they will come^Hplain.
...screw in a light bulb?
Can we increase that number and NOT take european length vacations, here in the states?
Technology has driven economic growth for well over a century and farther back. In the beginning of the 20th century agriculture wasn't much more advanced than it was in the middle ages. Most people alive in 1900 were farmers and farm workers. Now, drive through Illinois at harvest season and you see a giant combine driven by one person that picks the corn, shucks it, and shoots it into a giant trailor. That one guy can pick and shuck more corn than a few hundred people could a century ago.
Likewise, in non-farm industry during the 1800s they went from craftsmen crafting one item at a time by hand to factories, first with firearms and in the early 20th century with autos and about everything else.
Carbon paper? Whiteout? What are those, Grandpa?
Some good and useful tech has died; I wrote an article at K5 several years ago about it. Google K5 for "useful dead technologies" (it doesn't include carbon paper or whiteout!) if you're interested.
On a meatspace-related note, I get to work an hour before my boss. She had a job on my chair this morning she expected to takle several days, I had it on her desk before she came in. Tech is only useful if you know how to use it effectively!
-mcgrew (sm62704. Sorry for the A/C but I'm at work right now. Viva productivity!)
Tech adoption in business can't be avoided. It will happen, whether we try to accelerate it or not.
Why?
Because the numbers are just too good. The "machine" (whatever form it may take, from a tractor to a PC to a stapler) winds up saving money by making ten people able to do the work of 20. Over time, in baby steps, machines of various types will be incorporated into business processes and human labor will be eliminated. This will result in better productivity numbers for each company and the nation as a while.
There is a dark side to this of course. Sure, the people who lost their jobs are now free to do something more interesting....provided they can find something more interesting that pays. Sure, machines create new jobs too (production, maintenance, administration, etc). However, logically, the machines must create fewer jobs than they eliminate (otherwise their total cost of ownership will wind up being higher than keeping humans on staff, and they won't be adopted).
So as technology improves, and machines of any type reach a point where they eliminate more work than they create, they will become economically viable and they will be adopted. We couldn't stop it if we tried.
The machines free us from labor that we don't want to do. However, what happens when we as a nation become so free of labor that there isn't enough work? What happens when the machines make us so productive that 10% of the people can provide for the needs of themselves and the other 90% too? There simply won't be enough jobs for those 90% to all be productively employed, and so they won't be able to afford the goods that the 10% are making. This is a veritable human utopia, it is within reach, and our economy can't function in that environment. We will either start adopting more socialist values, or we will become ludites and legally inhibit technological advances in the name of protecting the worker.
I guess I kind of rambled. Oh well.
Actually, Walmart is responsible for much of the worker productivity gain in the 1995-2000 period; some studies put Walmart's share as high as 50%.
And they did it the old-fashioned way, by pushing down wages and working their employees to the bone.
About whether CS is obsolete.
The argument is that since companies can buy most of the software they need "off the shelf", they don't need to hire CS grads to make new software for them.
CS is really only obsolete when companies stop innovating. A company that innovates will, very probably in today's business environment, require new software to help it produce its innovative services and products.
My opinion is that availability of CS talent is a limiting factor in innovation. Obviously it is possible for some innovations to be implemented using off the shelf software. But many potential innovations need support beyond the technical skills needed to slap a VB application together. A shortage of top notch CS expertise means that innovations requiring non-trivial software don't get past the imagination stage most of the time.
It's a chicken or egg situation. If there were 10x the number of people with first class CS skills running around, there would be more than 10x the number of jobs for them.
That's why I think the idea of a guest worker program in technology is a good one. Just not H-1B as we know it. The problem for US workers isn't that H-1B brings in workers who take their jobs away. It's that H-1B brings in workers, keeps them here until their experience makes them ready to take US jobs away, then kicks them out of the country. It's precisely the wrong thing to do if you want to foster innovation in the US, precisely the right thing if you want to outsource innovation overseas.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Digital technology DEFINITELY increases productivity, and decreases it too. It's all about the people, and what they do with it. It's not about spending money by any means.
Case in point- Using almost exclusively freeware and extremely cheap hardware, I've been able to create and build a company that needs only TWO employees to run ( http://www.rlt.com/ ). And it makes a good income for both of us. Both of us are IT capable. Both of us know how to use digital technologies to our advantage.
Digital technology is the TOOL. Henry Ford said that if you need a tool, and you don't buy it, you end up paying for it anyway but you don't get to use it. Do tools make us more productive? Ask any carpenter to give up power tools and see what he says. By the same token, give a hopeless amateur a world-class workshop and the best materials to work with, and any chair he makes will still wobble. But give a master craftsman a hammer, a chisel and some scrap wood, and he'll make you a chair that will be sturdy, strong and will last a lifetime. It's all about the people, their skills, and their tools. I'd like to see any modern company try to compete without any computers in today's world.
Want to be more productive? Make more money? YOU are the master carpenter! And mostly, your employers are the hopeless amateurs who are using you as the tool! When I finally figured that out, I started my own business and I've never looked back.
As programmers and sysadmins, you have some incredible advantages over most MBAs. You have LOGIC. You are CREATIVE. You have a propensity for PROBLEM SOLVING. You can think through and visualize a plan of action from beginning to end. You can change course and re-program the system when requirements change. You know that very few, if any, projects are ever really finished. You're a hacker who knows how to shoot from the hip to get a job done on deadline, even if it isn't "elegant". You know that "Done" usually only means "it works at the moment and when it breaks, we'll fix it". Guess what, these qualities plus a willingness to try and fail then try again are what make entrepreneurs successful. Another advantage you have is that you won't have to hire some expensive tech guy to do your programming/sysadmin/DBA stuff for you. I can't count how many people have asked me who does my web sites. It's fun to watch the blank stare on their faces when I tell them "I did".
In short, don't BE the tool, USE the tool. Skills first, equipment second.
Not only did the productivity grow, the jobs are easier to do. Even a slacker armed with computer is more productive, than his/her hardworking predecessor with only a desk (and, perhaps, a typewriter).
We can visit /. for an hour a day and still be reasonably productive...
In Soviet Washington the swamp drains you.
In the 1980s and early 1990s some economicits looked the economic return of buying large numbers of computers and networks and claimed they couldn't find it. This was called the "productivity paradox". The current study now says that computerization is the only factor generating economic return. Yet another interesting paradox?
"While some of these billing problems may be related to the general mess of Health Care in the United States, I think that the inability to interface between systems is partially to blame. And, technology can be the cure to this problem."
The VA is a good example of a sytem that could be copied.
All money is made nowadays by shuffling stuff around in databases. It beats farming or manufacturing for comfort.
technical writing / development
Nation moves from agrarian, to industrial, to information economy just as 50 or so sociologists have predicted in the last 100 years, suddenly becomes news, film at 11. Why would agrarian and industrial markets expand in a country where the labor and tax costs are higher? Quick! Protest the IMF/WTO!
...the level of indebtedness of the average Joe. It's easy to get somebody to work 60 hours a week if losing a job means losing everything he 'owns'.
Oh, goodness. They've already got a think tank?
Next, the robots will be pushing for the right to vote!
We're doomed!
- RG>
Hey pal, this isn't a pleasantforest, so don't waste my time with pleasantries!