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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.
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.
Damn you, AC! You beat me to the punch!
AC is correct, this 'group' isn't exactly breaking new ground. Technology can improve productivity? Really? And, I always thought steam power was a step backward.
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
A great deal of modern health care and banking is completely conducted using paper transactions. Why do you think the whole of the state, country, or world operates exactly like the little part of it that you see?
Why does it take a check 7-10 days to be cleared? Is that the ping time between Bank of America and the issuing bank? No, but this system still works largely the same way it has for 1000 years. People, actual humans with eyes, check the numbers. I doubt this will change for a long time. Bank brass doesn't like the idea of removing that human "safeguard".
Health care is a fucking mess. Doctors aren't into computers, they have better things to do. Receptionists and clerical workers cobble around a mess of access databases and flat text files. Plenty of room to improve and streamline. This will change, but will have more to do with education. I have a friend who just completed a vocational cert in medical billing, and there was very little IT training involved. Some introductory word processing, and basic spreadsheet usage, and that was about it.
Transportation? All over the place again. For every company using high tech dispatching and tracking trucks with GPS and monitoring the engine wear in real time, there's a driver-owned rig tooling down the interstate with a big fucking paper map unfolded on the windshield.
I don't need no instructions to know how to rock!!!!
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
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
Not at all. People don't check the numbers, scanning equipment does that. Checks take 3-5 days to clear because your bank makes money off the float (the time between when they receive the money and they give it to you).
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
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.
There's still too much paper in health care and banking.
When I go to the doctor, I've got to fill out forms containing information that I've already filled out for that doctor or information that should be available to my doctor from other places I've filled it out. And I've got to fill out those forms on paper, which are then entered by someone else, increasing the rate of error.
My wife works as a TSS and she still has about an hour of paperwork to fill out every week. To fulfill HIPA requirements, it has to meet very strict requirements. She's been called in to correct things like lines not reaching to the edge of the form box or signing the paper in black ink instead of blue.
Restricting behavior to meet requirements is something that computer programs can do very well, but her company and the state haven't set up a system where she can log into a website, enter the information, digitally sign it, and submit it without using paper. And the worst part is that these forms she fills out must be retained even though they're digitized to be sent to
Finally, when I was getting my mortgage, they insisted that I fax information to them so they'd have a hard copy. Never mind that fax machines are almost negligible, never mind that fax machines are less secure than an encrypted email, and never mind that the functionality of the form could have been duplicated through a website. I was forced to take time out of my day to hunt down a fax machine and then pay to use it.
There's still too much paper in our society. And one of the main reasons for this is because the government hasn't stepped up to alter laws like HIPA that mandate paper copies of all information.
I'm in the hole of the broadband donut.
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.