Skeptics or cynics might argue that much of what passes for today’s digital transformation is simply the latest buzzword for applying technology to business processes. The buzzword desired outcomes might include agility, personalization, automation, data-driven decision making, improved customer experience or any other set of information technology outcomes.
Of course, businesses and organizations and consumers have been adding digital products to their everyday lives for decades. And it would be hard to clearly differentiate any of the desired outcomes of technology deployment since the mid-1980s with the outcomes of digital transformation.
Of course, the problem is that all information technology becomes commoditized. Any single firm would gain sustainable advantage if it were the only firm in its industry to adopt a particular technology.
The problem is that never is possible. Eventually, all competitors in any industry have access to, and use, all the relevant technologies. Though efficiency or effectiveness might arguably be improved, it does so for all competitors in the market, eventually negating any first-mover advantage a single firm might have tried to gain.
The other problem is that applying technology does not often seem to yield tangible advantages in terms of productivity. This productivity paradox has been noted since the 1980s, when enterprises began to apply lots of digital technology to their businesses.
Many technologists noted the lag of productivity growth in the 1970s and 1980s as computer technology was introduced. In the 1970s and 1980s, business investment in computer technology were increasing by more than 20 percent per year. But productivity growth fell, instead of increasing.
So the productivity paradox is not new. Massive investments in technology do not always result in measurable gains. In fact, sometimes negative productivity results.
Information technology investments did not measurably help improve white collar job productivity for decades in the 1980s and earlier. In fact, it can be argued that researchers have failed to measure any improvement in productivity. So some might argue nearly all the investment has been wasted.
Some now argue there is a similar lag between the massive introduction of new information technology and measurable productivity results, and that this lag might conceivably take a decade or two decades to emerge.
The Solow productivity paradox suggests that applied technology can boost--or lower--productivity. Though perhaps shocking, it appears that technology adoption productivity impact can be negative.
The productivity paradox was what we began to call it. In fact, investing in more information technology has often and consistently failed to boost productivity. Others would argue the gains are there; just hard to measure. Still, it is hard to claim improvement when we cannot measure it.
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