Erik Brynjolfsson: Wired for Innovation : How Information Technology Is Reshaping the Economy (Paperback); 2013 Edition

by Erik Brynjolfsson, Adam Saunders, Unknown Author

Two experts on the information economy explore the true economic value of technology and innovation. A wave of business innovation is driving the productivity resurgence in the U.S. economy. In Wired for Innovation , Erik Brynjolfsson and Adam Saunders describe how information technology directly or indirectly created this productivity explosion, reversing decades of slow growth. They argue that the companies with the highest level of returns to their technology investment are doing more than just buying technology; they are inventing new forms of organizational capital to become digital organizations. These innovations include a cluster of organizational and business-process changes, including broader sharing of information, decentralized decision-making, linking pay and promotions to performance, pruning of non-core products and processes, and greater investments in training and education. Innovation continues through booms and busts. This book provides an essential guide for policy makers and economists who need to understand how information technology is transforming the economy and how it will create value in the coming decade.

Genres: Economics, Technology, Nonfiction

Paperback

First published January 1, 2009

Reviews

[Mark Steed · Rating 3 out of 5]

This book for the leaders of organisations responsible for strategic development - it is not for ICT enthusiasts. Bryjolfsson [MIT] and Saunders [Penn] review the recent economic research literature on the impact that IT is having on the [US] economy. Thus there is nothing original about this book - it concisely and in very readable way facilitates keeping up to date with the latest trends and research findings.

The most important conclusion that they draw iis that the firms that have been transformed by ICT have not simply invested in hardware and training, but they have also undergone significant complementary changes in their business practices.
"According to research conducted over the course of several years at MIT's Center for Digital Business and at the University of Pernnsylvania's Wharton School, organizations that adopt these practices are more productive and have a higher market value than their competitors." 61-64.
They have identified "Seven Pillars of Digital Organization":
1. Move from Analogue to Digital Process
2. Open Information Access - openness helps both employees and managers to do their jobs more productively
3.Empower Employees
4. Use performance-based incentives
5. Invest in corporate culture
6. Recruit the right people
7. Invest in human capital

[Espen · Rating 4 out of 5]

Excellent overview and guide to the research on the economic effects of information technology. Short chapters with pointers to more reading, good examples, concludes with avenues for further research. I will use this as an assignment for my technology strategy students - rather than giving them a few articles, they might as well read the whole book.

[Ietrio · Rating 1 out of 5]

Two paper pushers join forces to tell you a fairy tale based on the newspaper headlines they have recently read. The new generation of faith healers mutated into technology speakers.

[Will · Rating 4 out of 5]

"The companies with the highest returns on their technology investments did more than just buy technology; they invested in organizational capital to become digital organizations. Productivity studies at both the firm level and the establishment (or plant) level during the period 1995-2008 reveal that the firms that saw high returns on their technology investments were the same firms that adopted certain productivity-enhancing business practices. The literature points to incentive systems, training, and decentralized decision making as some of the practices most complementary to technology. Moreover, the right combinations of these practices are much more important than any of the individual practices. Copying any one practice may not be very difficult for a firm, but duplicating a competitor's success requires replicating a portfolio of interconnecting practices. Upsetting the balance in a company's particular combination of labor and capital investments, even slightly, can have large consequences for that company's output and productivity. As in a fine watch, the whole system may fail if even one small and seemingly unimportant piece is missing or flawed."

[Jysoo · Rating 4 out of 5]

This is a little book on what you cannot measure. It starts with intangible benefits people enjoy (e.g., by Google and Wikipedia search) which do not show-up in GDP, which is more focused on tangible good. What then would be a reasonable way to measure total benefit to individual? After raising the question, the authors go on to the main topic of measuring the contribution of IT on productivity and economic growth. The issue is related to business practice and organizational capital which is also difficult to measure. It is clear that the authors raised important questions. But there is no answer available, just directions.

[Klaas · Rating 2 out of 5]

Bit too basic, but provides reader without prekbowledge on innovation subject with a good overview of academic literature. Great summary imo.

[Simon Hampton · Rating 5 out of 5]

The most authoritative econometric account of the impact of ICT on business productivity I have read to date. Truly brilliant

[David Salazar · Rating 3 out of 5]

It brings a good econometric perspective about IT investment and some insights about productivity outcomes. However it misses talking about strategy for successful adoption of IT technologies.

[Koen · Rating 3 out of 5]

Innovation from an economic perspective. Very insightful for the valuation of ICT and free goods... Good to take with me but a lot of ballast to go through first.