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Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms

This study analyzes the relationship between information technology (IT), organisational change (OC), and productivity growth in UK firms. It examines factors influencing OC and investigates if EU firms are slow in introducing OC. The findings suggest that OC depends on competition, and poor EU performance may improve if IT acceleration and competition levels align.

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Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms

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  1. Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms Gustavo Crespi, Chiara Crisculo, Jonathan Haskel Geneva, May 06 Slides 1-5: Short summary 6-15: Details Paper at: www.econ.qmul.ac.uk

  2. Is slow productivity growth in Europe due to Regulation e.g .in retailing lack of complementary investment in organisational change? Use data on 6,000 UK firms Does IT interact with org change in productivity growth? What causes org change? Are EU firms introducing org change slowly? Outline

  3. Macro IT raises PG but with lag No direct data on org change Micro Micro Bryn et al: panel of firms 87-94 with computer hardware plus survey of organisational practices, 95. Find: organisational practice and computer hardware interact Existing evidence on IT and OC

  4. Micro data from CIS for 1998-2000 productivity growth organisational change IT investment Estimate prod function What we do • Estimate OC equation

  5. Data: extensive checks on measurement etc. Prod function: IT invest and OC interact What we find • OC equation • OC depends on • Compet • OC introduc more in US MNEs rel to others

  6. Data sources, cross-checks, robustness Econometrics Measurement error IV The details

  7. (Y/L), I 1998-2000. Check against ABI data. M, use ABI IIT. Use question: “Acquisition of machinery and equipment (including computer hardware) in connection with product or process innovation”. Value in £s. Check against ONS and ABI data. CIS3 data:Y, L, IT

  8. Wider innovation question: Did your enterprise make major changes in the following areas of business structure and practices during the period 1998-2000 and how far did business performance improve as a result?” Options given were “a. Implementation of new or significantly changed corporate strategies e.g. mission statement, market share, b. Implementation of advanced management techniques within your firm e.g. knowledge management, quality circles, c. Implementation of new or significantly changed organisational structures e.g. Investors in People, diversification, d. Changing significantly your firms marketing concepts/ strategies e.g. marketing methods.” Process innovation question. Checks. CIS3 Data: O

  9. Average innovative activity

  10. Results (lnLit , lnMit not repor)

  11. Robustness

  12. Probit estimates of O

  13. IV

  14. O, IT and  IIT on TFPG

  15. Conclusions • Does  O interact with  kIT?  kNIT? YES, NO • What determines O? COMPETITION • Will poor EU performance unwind? • Yes, when IT accel ends • Yes, if compet pressure same as in US • No, if US MNE effect remains

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