Information technology and productivity: Myths and realities

In the absence of empirical research, media and government publicity have created false expectations and unnecessary anxieties about the effects of new technology. It is comparatively easy to show how information technology can produce productivity gains and job losses in specific areas. But it is not realistic to extrapolate ‘local’ effects to an organization as a whole, or to the economy. The argument of this paper is that it is necessary to consider the implications of technical change on three ‘levels of effect’—operating, organizational and strategic—in order to make a comprehensive assessment. Management, however, appear to concentrate on operating criteria, ignore the consequences of organizational decisions, and do not explore the strategic opportunities of the new technology. The potential strategic advantages may thus not be achieved.