In Business Model, Internet Access, Mobile, Spectrum

Is it a myth that investing in more information technology boosts productivity? A corollary: has information technology boosted living standards? Not so much, some say. Others would argue the gains are there; just hard to measure.

The absence of huge productivity gains has created what economists call the “productivity paradox.”

Basically, the paradox is that the official statistics have not borne out the productivity improvements expected from new technology.

In fact, some might argue that higher investment in information technology investments have provided value less than expected.  The implication is that such investments should be avoided or limited.

None of that is good news for suppliers of IT goods and services. Nor, arguably, is that terribly good news for supporters of high speed access as a driver of economic development.

To make the point, most of us assume such investments drive economic growth. We actually do not know that, as an economic certainty.

Equally likely: some value is obtained, but less than some other investments might provide. It is possible that allowing workers to sleep more or commute less would provide higher productivity benefits. It is possible that any number of other “how you treat people” programs would provide more productivity growth than investing in IT.

Of course, none of that is likely to matter. We will behave as though high speed access is a necessary good, without any actual understanding of cause and effect.

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