The Uneconomic Growth of Computing

A variety of models have been posited to account for the diffusion of computing technologies; the most widely accepted of these posits the cost-effectiveness of computing as the key inducement to investment in the technology. Alternative models stress less strictly rational considerations. These models have strikingly different implications for the repercussions of computing on staffing and efficiency in organizations. Other researchers have studied these relationships through cross-sectional analysis of aggregate data, without conclusive result. The panel study presented here pursues these relationships over time within 82 private-sector organizations. The analyses presented here do not support expectations that computerization reduces staffing or increases cost-effectiveness of operations.