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Journal of Economic Perspectives: Vol. 14 No. 4 (Fall 2000)

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Beyond Computation: Information Technology, Organizational Transformation and Business Performance

Article Citation

Brynjolfsson, Erik, and Lorin M. Hitt. 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance." Journal of Economic Perspectives, 14(4): 23-48.

DOI: 10.1257/jep.14.4.23

Abstract

To understand the economic value of computers, one must broaden the traditional definition of both the technology and its effects. Case studies and firm-level econometric evidence suggest that: 1) organizational "investments" have a large influence on the value of IT investments; and 2) the benefits of IT investment are often intangible and disproportionately difficult to measure. Our analysis suggests that the link between IT and increased productivity emerged well before the recent surge in the aggregate productivity statistics and that the current macroeconomic productivity revival may in part reflect the contributions of intangible capital accumulated in the past.

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Authors

Brynjolfsson, Erik (MIT)
Hitt, Lorin M. (U PA)

JEL Classifications

L86: Information and Internet Services; Computer Software
O33: Technological Change: Choices and Consequences; Diffusion Processes
D24: Production; Cost; Capital and Total Factor Productivity; Capacity
L22: Firm Organization and Market Structure
L63: Microelectronics; Computers; Communications Equipment

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