U.S. Manufacturing productivity grew at more than 5% through the 2nd half 2003. From the 1970s into the 1990s, productivity grew by barely 1.4% a year. It takes 50 years for living standards to double if productivity grows at 1.4% per year, but only 18 years to double at 4% growth.
The unsung heroes of the current productivity boom have not been the microchip and the Web browser, but rather the creative and diligent work done by those who have been rethinking supply chains, customer service, incentive systems, product lines, and 1,001 other processes and practices affected by computers. Most successful enterprises recognize this, and their spending priorites offer proof. 90% of IT investment in Corporate America goes into creating new organizational and human capital. Less than 10% is spent on the actual hardware and software.
[Source: Erik Brynjolfsson, via MIT Technology Review]
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