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.

Comments

Patents

[Nerdfest]

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.

Re:Patents

[AKAImBatman]

Software patents aren't the problem. They're a serious issue unto themselves (mostly because the Patent Office's own procedures are never followed) but the real issue is with the managers in the companies. No one sees technology as a good way to smooth and streamline their internal operations. If that happens, it's mostly a byproduct of whatever work is being done on the customer-facing portion of the business.

The fact that you can build a smooth process internally to automate a great number of expensive processes (not to mention reduce the body count) tends to blow by the decision makers. They only think about it when they absolutely need something NOW. Which tends to result in a mess of Microsoft Access and Visual Basic "applications". Which they think is okay, because they don't realize the tremendous maintenece costs they're committing to.

There honestly needs to be a bit more focus on developing strategies for using technology in business. Those strategies should then be taught as part of the MBA programs. They may not really "get" it, but at least they'll understand that using X technology has Y consequences and that you need to rely on trustworthy staff to find the best tradeoff.

Let's talk about health care IT

[UbuntuDupe]

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?")

Why does GE's health care division run ads bragging about how the accomplished the insurmountable task of ... computerizing records?

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.

An old and silly argument

[Stu Charlton]

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.

But wait, there's more!

[RonTheHurler]

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.