ERIC Number: ED403403
Record Type: Non-Journal
Publication Date: 1996-Dec
Reference Count: N/A
Waiting for the Return. Maximizing Investments in Technology.
Workforce Economics, v2 n4 p3-7 Dec 1996
Investments in technology and the number of workers using computers are growing quickly and at an increasing rate. From 1990-1995, investments in computers and related equipment tripled. Real (inflation-adjusted dollars) investments in computers and peripheral equipment increased from $200 million in 1973 to $91.6 billion in 1995. Increasing investments in computer equipment have not yet resulted in increased productivity growth, however; growth in productivity is actually slowing. Some explanations for this paradox include the following: (1) investments in technology require investments in worker training before increased productivity is noted; (2) investments in technology are seen as ways to improve quality but not necessarily quantity; (3) computers represent only a small portion of the total stock of capital in the U.S. economy, so increasing them has little effect on overall productivity; (4) problems in measuring productivity may underestimate the contribution of computer investments to productivity improvements, especially in the service sector where they are most prominent; and (5) productivity slumps as new technology is assimilated but may surge again afterwards, as it has after all earlier innovative periods. In addition, although productivity gains as part of the whole economy are small and difficult to measure, individual companies provide examples of great gains in productivity through use of technology. Increased training will increase workers' skills in using computers and lead to more high-level jobs and an eventual growth in productivity. (KC)
Publication Type: Journal Articles
Education Level: N/A
Authoring Institution: National Alliance of Business, Inc., Washington, DC.