Saturday, 21 August 2021

Its not technology driving productivity

 Generally, there does seem to be a correlation between investment in technology and productivity improvement.

Case proved, then?

Well … not necessarily.

I learned many years ago that correlation is not necessarily causation.

From my experience, I would read things differently.

Firms often look at technology investments when:

  • they have analysed processes and identified ways of  streamlining systems, processes and procedures;
  • the labour market is very tight and they are having trouble finding employees with the right skills;
  • labour is expensive.

Only the first of these is really a direct win for technology - and perhaps that should be put down as a win for systematic process analysis and improvement.  The other two are direct results of a tight labour market.  

This is what really drives technology adoption AND productivity.

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