Study: IT Does Matter After All

Information technology has a measurable impact on businesses’ growth and competitive edge, a handful of MIT and Harvard researchers conclude in an article printed by the Wall Street Journal.

If that seems obvious, consider that there exist competing schools of thought. Nicholas Carr started the debate on whether IT matters or not with his 2003 article "IT Doesn't Matter." Others later joined Carr, postulating that IT affects everyone equally. Others believe that it decreases competition because software homogenizes business processes.

But, according to the latest researchers, industries that have adopted IT have experienced greater concentration (“a smaller number of firms holding a high proportion of sales and market value”) and turbulence, which means that the market position of one firm could vary greatly from one year to the next. Both conclusions apply to “services and manufacturing sectorsâ€"publishers and insurers, as well as makers of autos and machinery, for example.”

The federal government, of course, doesn't have competitors. But federal technologists, and the IT contractors who sell to them, often struggle to explain why IT matters in government, as if the benefits of technology were self-apparent. The benefits aren't self-apparent. But these researchers present evidence that federal IT managers can draw on: IT changes things; it’s not neutral.

Hat tip: Joe McKendrick