Difference between revisions of "IT Productivity Paradox"
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| − | '''IT Productivity Paradox''' or '''Information Technology Productivity Paradox''' or '''Solow computer paradox''' is the peculiar observation made in business process analysis that, as more investment is made in information technology, worker productivity may go down instead of up. <ref>What is IT Productivity Paradox [https://cs.stanford.edu/people/eroberts/cs201/projects/productivity-paradox/background.html]</ref> | + | '''IT Productivity Paradox''' or '''Information Technology Productivity Paradox''' or '''Solow computer paradox''' is the peculiar observation made in business process analysis that, as more investment is made in information technology, worker productivity may go down instead of up. |
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| + | This observation has been firmly supported with empirical evidence from the 1970s to the early 1990s. This is highly counter intuitive. Before investment in IT became widespread, the expected return on investment in terms of productivity was 3-4%. This average rate developed from the mechanization/automation of the farm and factory sectors. With IT though, the normal return on investment was only 1% from the 1970s to the early 1990s. <ref>What is IT Productivity Paradox [https://cs.stanford.edu/people/eroberts/cs201/projects/productivity-paradox/background.html]</ref> | ||
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| + | == Solow Computer Paradox == | ||
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| + | Economist Robert Solow famously said in 1987 that the computer age was everywhere except for the productivity statistics. This phenomenon became known as the Solow Paradox. <ref>What is the Solow Paradox [https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/is-the-solow-paradox-back]</ref> | ||
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== See Also == | == See Also == | ||
| − | + | *[[IT Strategy (Information Technology Strategy)]] | |
Latest revision as of 21:28, 26 June 2023
IT Productivity Paradox or Information Technology Productivity Paradox or Solow computer paradox is the peculiar observation made in business process analysis that, as more investment is made in information technology, worker productivity may go down instead of up.
This observation has been firmly supported with empirical evidence from the 1970s to the early 1990s. This is highly counter intuitive. Before investment in IT became widespread, the expected return on investment in terms of productivity was 3-4%. This average rate developed from the mechanization/automation of the farm and factory sectors. With IT though, the normal return on investment was only 1% from the 1970s to the early 1990s. [1]
Solow Computer Paradox
Economist Robert Solow famously said in 1987 that the computer age was everywhere except for the productivity statistics. This phenomenon became known as the Solow Paradox. [2]
See Also