IMPACT OF technology

Topics: Information technology, Productivity, Economic growth Pages: 14 (2797 words) Published: May 29, 2014


STUDENT ID – 27011323

ASSIGNMENT TITLE: The impact of Information Technology on Productivity


The information technology investments have increased significantly with time and advancement in technology. In this study, an attempt is made to highlight how the information technology influences the organization productivity. The correlation between the information technology (IT) and productivity was very argumentative. Many studies were conducted to identify the impact of IT on productivity conclude different results. It is impossible to estimate the productivity growth due to the availability of so many advanced computer technologies, as it’s tough to consider all parameters involved while calculating productivity growth. Several researches and studies were documented stating positive effects of IT on productivity growth. But still there were few against this statement.

The advancement in the information technology made both consumers and business enterprises to use it. Computers, laptops, wireless communications etc. are all part of IT and incorporated in every industry. Enterprises invest in these technologies because it was assumed technologies will enhance productivity. Companies aim to generate more business and high turnovers through less investment. In a race to gain more efficiency, the enterprises are adapting new technologies. Huge investments are made on new technologies to survive in industry. The major challenge is to produce high quality goods and services at low prices. Some enterprises understood the value and importance of information technology and used it to deliver more products in less time and more reliable and convenient services at lower cost. This will also help to gain competitive advantage over rivals. It was illustrated in a study to generate high productivity growths from information technology; enterprises should change the existing infrastructure as well as business practices (Brynjolfsson & Brown, 2005). Many enterprises changed the organizational structure to exploit the full potential of information technology and its applications. Brynjolfsson and Hitt (1998) linked productivity with living standards to understand it better. They mentioned that value of productivity can be easily understood when related with our living standards. They highlighted the significance of productivity by comparing it with our living standards and mentioned that, “productivity growth determines our living standards and the wealth of nations.” This reflects the customers’ behavior to consume more in less money. They also point out that the concept of productivity is simple and vast but tough to measure with accuracy. Information Technology and Productivity

Productivity was described as the amount of output generated for a certain amount of input (Brynjolfsson, 2003; Hitt & Brynjolfsson, 1995). Productivity can also be defined as the measure of the quantity of outputs in goods and services per unit of input (Muriwai, 2006). Productivity can be measured either by keeping the output static or input. Productivity can be increased with increase in output keeping input constant or by decreasing the input keeping the output static. The term information technology was defined narrowly as the expenditures made on the computing hardware (Brynjolfsson, 2003 and Hitt & Brynjolfsson, 2005). It was elaborated a little more as. All the computer software and hardware, tools and services used in the business processes and operations are a part of information technology. The investments in information technology were defined as the expenses on the computer hardware and software and all other devices related with IT (Morrison, 1997). The main purpose of these investments is developing a modern infrastructure within the organization to boost productivity...

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