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Part - III

Infrastructural Technology: This type of technology is shared by firms across an industry. All firms have more or less the same level of such technology and it plays a similar role in all these firms. Examples would be Telecom, Railways and Roadways etc.

Thus, as IT evolved, even it has ended up today as an Infrastructural Technology. Every firm today uses IT. IT is only an enabler. Not a strategic tool in itself like it was a few years back. The graph that follows depicts the stages any technology passes though. First suggested by Nicolas Carr, it is popularly known as Infrastructural Technology Curve.

Thus, as accessibility, affordability and standardization have increased, the barriers have rapidly eroded.

Therefore IT has now become a competitive necessity. As a result of this, like any other technology, it is not spending and innovation that gains importance. Cost cutting measures.

Why to invest in IT?

The Productivity Paradox

Nobel laureate Robert Solow (1987) once famously remarked, "You can see the computer age everywhere but in the productivity statistics" The question arising is: Does IT enhance productivity in any way? Famously termed as 'The Productivity Paradox', this question has been researched widely since the last two decades. Studies have been carried out at levels from the economy of a country (Jorgenson and Stiroh, 1995), at industry levels (Roach, 1987, 1991) and also at firm level (Harry and Katz, 1991).

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* Contributed by -
Mrugendra Shintre,
Manoj Kumar Gaddam,
II Year,
IIM Lucknow.