January 12, 2006

It's Not The Technology That Raises Productivity, But How it's Used

Hal R. Varian:
Just dropping a bunch of new personal computers on workers' desks is unlikely to contribute to productivity. A company has to rethink how business processes are handled to get significant cost savings.

As the Stanford economic historian Paul A. David has pointed out, the productivity effects from the electric motor did not really show up until Henry Ford and other industrialists figured out how to use it effectively to create the assembly line. The same is true for computers: just as the early industrialists had to learn how to use manufacturing technology to optimize the flow of materials on the factory floor, companies today must learn how to use information technology to optimize the flow of information in their organizations.
Posted by James Zellmer at January 12, 2006 8:22 PM | Subscribe to this site via RSS:
Posted to Business | Entrepreneurs | Leadership | Technology