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Wired for Innovation: How Information Technology Is Reshaping the Economy

Author

Listed:
  • Brynjolfsson, Erik

    () (MIT's Sloan School of Management)

Abstract

A wave of business innovation is driving the productivity resurgence in the U.S. economy. In Wired for Innovation, Erik Brynjolfsson and Adam Saunders describe how information technology directly or indirectly created this productivity explosion, reversing decades of slow growth. They argue that the companies with the highest level of returns to their technology investment are doing more than just buying technology; they are inventing new forms of organizational capital to become digital organizations. These innovations include a cluster of organizational and business-process changes, including broader sharing of information, decentralized decision-making, linking pay and promotions to performance, pruning of non-core products and processes, and greater investments in training and education. Brynjolfsson and Saunders go on to 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 yet amounts to trillions of dollars of value. Similarly, such nonmarket transactions of information goods as Google searches or views of Wikipedia articles are an increasingly large share of the economy yet virtually invisible in the GDP statistics. Drawing on work done at the MIT Center for Digital Business and elsewhere, Brynjolfsson and Saunders explain how to better measure the value of technology in the economy. They treat technology as not just another type of ordinary capital investment by also focusing on complementary investments--including process redesign, training, and strategic changes--and ton he value of product quality, timeliness, variety, convenience, and new products. Innovation continues through booms and busts. This book provides an essential guide for policy makers and economists who need to understand how information technology is transforming the economy and how it will create value in the coming decade.

Suggested Citation

  • Brynjolfsson, Erik, 2013. "Wired for Innovation: How Information Technology Is Reshaping the Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262518611, March.
  • Handle: RePEc:mtp:titles:0262518611
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    Cited by:

    1. Carol A. Corrado & Charles R. Hulten, 2014. "Innovation Accounting," NBER Chapters,in: Measuring Economic Sustainability and Progress, pages 595-628 National Bureau of Economic Research, Inc.
    2. Gabriel J. Costello & Brian Donnellan, 2016. "IT-Enabled R&D for Business Value in a Global Framework," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(3), pages 782-796, September.
    3. Strauss, Hubert & Samkharadze, Besik, 2011. "ICT capital and productivity growth," EIB Papers 6/2011, European Investment Bank, Economics Department.
    4. Shah, Naimatullah & Irani, Zahir & Sharif, Amir M., 2017. "Big data in an HR context: Exploring organizational change readiness, employee attitudes and behaviors," Journal of Business Research, Elsevier, vol. 70(C), pages 366-378.
    5. Che, Natasha Xingyuan, 2009. "Sectoral Structural Change in a Knowledge Economy," MPRA Paper 19839, University Library of Munich, Germany.
    6. Dale W. Jorgenson & Mun S. Ho & Jon D. Samuels, 2012. "Information Technology and US Productivity Growth: Evidence from a Prototype Industry Production Account," Chapters,in: Industrial Productivity in Europe, chapter 2 Edward Elgar Publishing.
    7. Hätönen, Jussi, 2011. "The economic impact of fixed and mobile high-speed networks," EIB Papers 7/2011, European Investment Bank, Economics Department.
    8. Greenstein, Shane & Nagle, Frank, 2014. "Digital dark matter and the economic contribution of Apache," Research Policy, Elsevier, vol. 43(4), pages 623-631.
    9. Brynjolfsson, Erik, 2011. "ICT, innovation and the e-economy," EIB Papers 8/2011, European Investment Bank, Economics Department.
    10. Thomas Niebel & Marianne Saam, 2016. "ICT and Growth: The Role of Rates of Return and Capital Prices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(2), pages 283-310, June.
    11. Dushnitsky, Gary & Klueter, Thomas, 2017. "Which industries are served by online marketplaces for technology?," Research Policy, Elsevier, vol. 46(3), pages 651-666.
    12. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," National Institute of Economic and Social Research (NIESR) Discussion Papers 416, National Institute of Economic and Social Research.
    13. Kibae Kim, 2015. "Evolution of the Global Knowledge Network: Network Analysis of Information and Communication Technologies’ Patents," TEMEP Discussion Papers 2015124, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Jul 2016.
    14. Van Reenen, John, 2011. "Wage inequality, technology and trade: 21st century evidence," Labour Economics, Elsevier, vol. 18(6), pages 730-741.

    More about this item

    Keywords

    information science; information technology; business economics; innovation policy;

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • Z1 - Other Special Topics - - Cultural Economics

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