Sidebar: IT Productivity: The Lag Effect

By Thomas Hoffman

January 12, 2004 12:00 PM ET

Computerworld - Growth in productivity, which is generally defined as output per unit of worker input, has chugged along at an annual rate of more than 4% since early 2001, after rising 2.6% per year from 1996 to 2000 and about 1.5% before then. Some economists and researchers maintain that the massive investments companies made in IT during the go-go days of the late 1990s are just beginning to blossom and are being borne out in today's productivity figures.
"The reason we're having such strong productivity growth now is that firms laid the foundation for this growth five years ago with the IT investments they made then," says MIT professor Erik Brynjolfsson.
One problem with most IT productivity research is that it's based on quarterly or annual comparisons, whereas some productivity gains aren't immediately realized because "some IT investments have more of a long-term effect," notes Howard Rubin, executive vice president at Meta Group Inc.

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