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Wired for Innovation: How Information Technology is Reshaping the Economy

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Author Info

  • Erik Brynjolfsson

    ()
    (MIT Sloan School of Management)

  • Adam Saunders

    ()
    (MIT Sloan School of Management)

Abstract

Starting in 1995, productivity growth took off in the U.S. economy. In Wired for Innovation, Erik Brynjolfsson and Adam Saunders describe how information technology directly or indirectly created the lion's share of this productivity surge, reversing decades of slow growth. They argue that the turnaround in productivity reflects the delayed effects of the massive investments in business processes accompanying the large technology investments since the late 1990s. Companies with the highest level of returns to their technology investment did more than just buy technology: they invested in organizational capital to become digital organizations. Brynjolfsson and Saunders examine the real sources of value in the emerging information economy, including intangible inputs and outputs that have defied traditional metrics. For instance, intangible organizational capital is not directly observable on a balance sheet but amounts to trillions of dollars of value. Similarly, such nonmarket transactions of information goods as Google searches or Wikipedia edits are an increasingly large share of the economy yet virtually invisible in the GDP statistics. The authors, drawing on work done at MIT and elsewhere, show how to better measure the value of technology in the economy. They describe new methods that don't treat technology as just another type of ordinary capital investment but also measure complementary investments—including training and consulting—and the value of product quality, timeliness, variety, convenience, and new products. Innovation continues through booms and busts; this book provides a crucial guide for policy makers and economists who need to understand how information technology is transforming the economy and where it will create value in the coming decade.

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Bibliographic Info

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This book is provided by The MIT Press in its series MIT Press Books with number 0262013665 and published in 2009.

Volume: 1
Edition: 1
ISBN: 0-262-01366-5
Handle: RePEc:mtp:titles:0262013665

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Web page: http://mitpress.mit.edu

Related research

Keywords: information technology; productivity; innovation; information economy;

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Cited by:
  1. Greenstein, Shane & Nagle, Frank, 2014. "Digital dark matter and the economic contribution of Apache," Research Policy, Elsevier, vol. 43(4), pages 623-631.
  2. John Van Reenen, 2011. "Wage inequality, technology and trade: 21st Century evidence," LSE Research Online Documents on Economics 47494, London School of Economics and Political Science, LSE Library.
  3. Che, Natasha Xingyuan, 2009. "Sectoral Structural Change in a Knowledge Economy," MPRA Paper 19839, University Library of Munich, Germany.
  4. Carol A. Corrado & Charles R. Hulten, 2013. "Innovation Accounting," NBER Chapters, in: Measuring Economic Sustainability and Progress National Bureau of Economic Research, Inc.
  5. Strauss, Hubert & Samkharadze, Besik, 2011. "ICT capital and productivity growth," EIB Papers 6/2011, European Investment Bank, Economics Department.
  6. Hätönen, Jussi, 2011. "The economic impact of fixed and mobile high-speed networks," EIB Papers 7/2011, European Investment Bank, Economics Department.
  7. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," NIESR Discussion Papers 11717, National Institute of Economic and Social Research.
  8. Brynjolfsson, Erik, 2011. "ICT, innovation and the e-economy," EIB Papers 8/2011, European Investment Bank, Economics Department.

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