Transforming Enterprise: The Economic and Social Implications of Information Technology PDF
Preview Transforming Enterprise: The Economic and Social Implications of Information Technology
Transforming Enterprise Transforming Enterprise The Economic and Social Implications of Information Technology edited by William H. Dutton, Brian Kahin, Ramon O’Callaghan, and Andrew W. Wyckoff The MIT Press Cambridge, Massachusetts London, England © 2005 Massachusetts Institute of Technology All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or informa- tion storage and retrieval) without permission in writing from the publisher. This book was set in Sabon by SNP Best-set Typesetter Ltd., Hong Kong. Printed and bound in the United States of America. Library of Congress Cataloging-in-Publication Data Transforming enterprise : the economic and social implications of information technology / edited by William H. Dutton . . . [et al.]. p. cm. Includes bibliographical references and index. ISBN 0-262-04221-5 (alk. paper) — ISBN 0-262-54177-7 (pbk. : alk. paper) 1. Information technology. 2. Information technology—Social aspects. I. Dutton, William H., 1947–. T58.5.T75 2005 303.48¢33—dc22 2004055178 10 9 8 7 6 5 4 3 2 1 Contents Preface ix Brian Kahin Introductory Essays xiii Technological Innovation in Organizations and Their Ecosystems 1 Ramon O’Callaghan Continuity or Transformation? Social and Technical Perspectives on Information and Communication Technologies 13 William H. Dutton I Transforming the Economy 25 1 Intangible Assets and the Economic Impact of Computers 27 Erik Brynjolfsson and Lorin M. Hitt 2 Projecting Productivity Growth: Lessons from the U.S. Growth Resurgence 49 Dale W. Jorgenson, Mun S. Ho, and Kevin J. Stiroh 3 The Impacts of ICT on Economic Performance: An International Comparison at Three Levels of Analysis 77 Dirk Pilat and Andrew W. Wyckoff II Knowledge and Innovation 111 4 New Models of Innovation and the Role of Information Technologies in the Knowledge Economy 113 Dominique Foray vi Contents 5 Using Knowledge to Transform Enterprises 131 Richard O. Mason and Uday M. Apte 6 Transformation through Cyberinfrastructure-Based Knowledge Environments 155 Daniel E. Atkins III Networks and Organizations 177 7 Toward a Network Topology of Enterprise Transformation and Innovation 179 Panagiotis Damaskopoulos 8 IT-Enabled Growth Nodes in Europe: Concepts, Issues, and Research Agenda 199 Ramon O’Callaghan 9 Supernetworks: Paradoxes, Challenges, and New Opportunities 229 Anna Nagurney IV Sector Transformation 255 10 Transforming Production in a Digital Era 257 John Zysman 11 Automotive Informatics: Information Technology and Enterprise Transformation in the Automobile Industry 283 John Leslie King and Kalle Lyytinen 12 The Role of Information Technology in Transforming the Personal Computer Industry 313 Kenneth L. Kraemer and Jason Dedrick 13 IT and the Changing Social Division of Labor: The Case of Electronics Contract Manufacturing 335 Boy Lüthje V Community and Society, Home and Place 359 14 Public Volunteer Work on the Internet 361 Lee Sproull and Sara Kiesler 15 The Internet and Social Transformation: Reconfiguring Access 375 William H. Dutton Contents vii 16 Impersonal Sociotechnical Capital, ICTs, and Collective Action among Strangers 399 Paul Resnick 17 The Tech-Enabled Networked Home: An Analysis of Current Trends and Future Promise 413 Alladi Venkatesh 18 The Social Impact of the Internet: A 2003 Update 437 John P. Robinson and Anthony S. Alvarez 19 Charting Digital Divides: Comparing Socioeconomic, Gender, Life Stage, and Rural-Urban Internet Access and Use in Five Countries 467 Wenhong Chen and Barry Wellman Appendix 499 Introductory Address 501 Rita Colwell Keynote Address 503 John Marburger Keynote Address 509 Donald L. Evans Contributors 513 Index 515 Preface Brian Kahin Over the years, research on IT-enabled change has followed changes in technology and the market. In the 1980s researchers looked at the phe- nomenon of personal computing in work, education, and recreation. In the 1990s, the growth of the Internet raised a much broader set of ques- tions, with different institutional and policy implications. The use of the World Wide Web for advertising, promotion, and, finally, consumer transactions drove household use to mass medium levels, while the emer- gence of the Web technology as infrastructure for business reframed the problem of linking computers and productivity. Quickly internationalized but colored by American entrepreneurship, the Web triggered vigorous discourse around principles and policies for “global electronic commerce.” Measuring this phenomenon while under- standing the social and economic implications became a priority for pol- icymakers as well as businesses. The focus on electronic commerce was overshadowed by a more general research-based case that there was dis- cernible “digital economy.” This digital economy embraced the IT sector and extended into every other sector. It served as the principal driver for a “new economy” characterized by sustained productivity gains that defied the traditional boom and bust of the business cycle. But there was a bust, and it took the wind out of this ever-expanding phenomenon. Yet with the bust comes the possibility of a new set of insights about the essential and ephemeral aspects of all that has gone before. The exuberance that characterized information technology in the late 1990s is in short supply today. Spam, viruses, worms, and denial of service attacks dominate the news, echoing anxiety about terrorism in the tangible world. Change, such as it is, is led not by start-ups but by x Kahin the leaders of the old economy. New applications and opportunities are few. Absorption and consolidation are the order of the day. Investment in underlying infrastructure has collapsed. Litigation rises as blame is sought for failure. Moore’s law seems to matter less and less, except to game players hungry for realism. Yet deep processes unleashed by information technology continue to transform human activity. Markets, value chains, firms, transactions, business models, institutions, innovation, collaboration, standardization, trust, community—all have been and are being reshaped by information technology. These changes ripple across the economic fabric within and across sectors. Instead of the category-killer dot-coms in business-to- consumer electronic commerce, the manifestations of change are widely dispersed and often subtle. They twist and turn deep within the firm, in the relationship between firms, or in social interactions. Transforming Enterprise looks at change from five perspectives that correspond to the sections of the book: 1. What is the impact on the economy as a whole? In particular, how does IT affect productivity? Familiar questions, but we keep learning more about the answers. 2. What are the implications of IT for the creation and use of knowl- edge, especially new knowledge that leads to real innovation in products and services? Knowledge is driving the economy in many ways, while information technology and the Internet are changing the environment in which knowledge is developed and managed. Yet both knowledge and the changing environment for knowledge are very difficult to define and measure. 3. What are the implications for how enterprise is organized? We see firms working together with new facility and in new ways, thanks to the Internet. Not just one on one, but through interlocking and overlapping networking. Knowledge is shared and marshaled with varying degrees of immediacy and formality within and across boundaries. 4. To get a practical perspective on how these developments and other phenomena play out, we take a close look at how business practice and industry structure have been within particular sectors of the economy. This line of investigation is now well established and benefits from years of results and insight. 5. Finally, we look beyond the sphere of business to the implications for home, community, and society. Here, too, there is now a substantial body of research but also continual change as the capabilities of the home user continue to expand. Preface xi There is long history behind the Transforming Enterprise project. In 1997, the National Science Foundation and the National Academy of Sciences developed a broad research agenda on the economic and 1 social implications of information technology. OECD did important work bringing the economic and social impact of electronic commerce 2 to the attention of the policy community in 1997–1998. The U.S. Department of Commerce published its defining work on the “digital 3 economy” in 1998. In May 1999, a number of agencies collaborated on “Understanding the Digital Economy,” a conference that served as a useful model for mixing industry, government, and academic per- spectives and making the best current research available to a large 4 audience. The sudden rise of electronic commerce and a distinct digital economy demanded attention from a larger policy community concerned with trade, economic growth, and the influence of the Internet on a wide spec- trum of communications and information policy issues. The speed with which these phenomena were developing and perhaps transforming the whole of the economy seemed to defy, and in fact discouraged, any well-reasoned public response. After the bust, it became easier to gain a balanced view of the process of transformation, as well as a better understanding of how it recalibrates policy frameworks. We appreciate the many who contributed to making Transforming Enterprise possible. Principal funding was provided by the Digital Society and Technologies Program of the National Science Foundation. The conference was hosted by the Technology Administration’s Office of Technology Policy in the Department of Commerce. The Center for Information Policy in the College of Information Studies, University of Maryland, served as the project manager. The other cosponsors, each of which contributed in special ways to the project, include the Information Society Technologies Program of the European Com- mission, the University of Michigan School of Information, the Center for Research on Information Technology and Organizations at the University of California, Irvine, the Berkeley Roundtable on the Inter- national Economy, the Progress and Freedom Foundation, and the Interagency Working Group on Information Technology Research and Development. For further information, the reader is directed to http://transformingenterprise.com. xii Kahin There is still much to learn, but we have a foundation here for empir- ically grounded public debate about the future of human enterprise. By strengthening the connections between research and policy, we expect useful research, sound policy, and a better future. Brian Kahin Ann Arbor, Michigan Notes 1. Fostering Research on the Economic and Social Impacts of Information Tech- nology, Report of a Workshop. Washington, D.C.: National Academy Press, 1998. http://www.nap.edu/readingroom/books/esi/. See also National Science Foundation, Division of Science Resources Studies, Social and Economic Impli- cations of Information Technologies: A Bibliographic Database Pilot Project, http://srsweb.nsf.gov/it_site/index.htm. 2. OECD, The Economic and Social Impact of Electronic Commerce: Preliminary Findings and Agenda, 1998, http://www.oecd.org/dataoecd/3/12/ 1944883.pdf. 3. This includes the series of internally produced reports beginning with Lynn Margherio et al., The Emerging Digital Economy, Departments of Com- merce, Economics and Statistics Administration, 1998, http://www.esa.doc.gov/ TheEmergingDigitalEconomy.cfm. 4. Archive at http://www.technology.gov/digeconomy/; Erik Brynjolfsson and Brian Kahin, Understanding the Digital Economy, MIT Press, 2000.
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