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Cited by 3,335Information Technology Governance and StrategyEconomic Growth and ProductivityICT Impact and Policies

Beyond computation: Information technology, organizational transformation and business performance

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Brynjolfsson, Erik, Hitt, Lorin M·2000·Journal of Economic Perspectives
DOI 10.1257/jep.14.4.23
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Abstract

To understand the economic value of computers, one must broaden the traditional definition of both the technology and its effects. Case studies and firm-level econometric evidence suggest that: 1) organizational “investments” have a large influence on the value of IT investments; and 2) the benefits of IT investment are often intangible and disproportionately difficult to measure. Our analysis suggests that the link between IT and increased productivity emerged well before the recent surge in the aggregate productivity statistics and that the current macroeconomic productivity revival may in part reflect the contributions of intangible capital accumulated in the past.

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  • Historical evidence from technological shifts shows that the transition from invention to economy-wide permeation often takes years or even decades, requiring regulatory, cultural, and procedural changes.

    “historical evidence from technological shifts-such as electricity, airplanes, and computers-shows that the transition from invention to economy-wide permeation often takes years or even decades, requiring regulatory, cultural, and procedural changes”

    From GDPVAL: Evaluating AI Model Performance on Real-World Economically Valuable Tasks (2026) · cites this paper as Brynjolfsson & Hitt, 2000

    The paper’s Abstract (page unavailable) describes earlier technologies whose benefits depended on complementary innovations, including organizational change. “Transforming the Firm” (page unavailable) also describes changes in processes and culture accompanying computer adoption. The passages do not establish a years-or-decades interval from invention to economy-wide adoption, or identify regulatory changes or airplanes as examples. (LLM, conf=0.84)

    Experimental — accuracy not yet measured

  • The literature on the fourth industrial revolution has remained narrowly focused on the question of skills and whether human and AI are substitutes or complements on the labour market.

    “The literature on the fourth industrial revolution however has remained narrowly focused on the question of skills and whether human and AI are substitutes or complements on the labour market (Brynjolfsson and Hitt, 2000; Autor 2013; Katz and Margo 2013; Acemoglu 2014; Frey and Osborne, 2017; Genz et al. 2018).”

    From Artificial Intelligence (AI): Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy (2021) · cites this paper as Brynjolfsson and Hitt, 2000

    In “Direct Measurement of the Interrelationship between Information Technology and Organization” (page unavailable), the paper discusses worker skills and whether computers substitute for or complement particular tasks. It does not establish that fourth-industrial-revolution literature remained narrowly focused on those questions: it also describes research on organizational redesign, work practices, and business performance, and does not address human–AI relations specifically. (LLM, conf=0.84)

    Experimental — accuracy not yet measured

  • Firm-based complementary investment is important for unlocking the work-related benefits of new technologies.

    “This highlights the importance of firm-based complementary investment for unlocking the work-related benefits of new technologies (Brynjolfsson and Hitt, 2000).”

    From Still Waters, Rapid Currents: Early Labor Market Transformation under Generative AI (2025) · cites this paper as Brynjolfsson and Hitt, 2000

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Cites

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Cited by

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Authors
Brynjolfsson, E., & Hitt, L. M.
Affiliations
  • Massachusetts Institute of Technology (US)
  • University of Pennsylvania (US)
ORCID
Venue
Journal of Economic Perspectives
Publisher
American Economic Association
Published
2000-11-01
Volume
14
Issue
4
Pages
23-48
ISSN
0895-3309 (ISSN-L)
DOI
10.1257/jep.14.4.23
OpenAlex
W2151169308
Cited by
3,335
References
4
Citations by year
2026: 242 · 2025: 158 · 2024: 141 · 2023: 146 · 2022: 105 · 2021: 130 · 2020: 143 · 2019: 172 · 2018: 115 · 2017: 89 · 2016: 125 · 2015: 137 · 2014: 137 · 2013: 135 · 2012: 152
FWCI
166.43
Type
journal article
Language
en
Open access
Locations
  • The Journal of Economic Perspectives (publishedVersion)
  • ScholarlyCommons (University of Pennsylvania) (submittedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
National Science Foundation (9733877)
Topics
  • Social Sciences › Business, Management and Accounting › Management Information Systems › Information Technology Governance and Strategy
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
  • Physical Sciences › Engineering › Media Technology › ICT Impact and Policies
Keywords
IT investment, organizational investment, intangible capital, firm performance, organizational change

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