Benefits of ICT investment slow to show

One of the sombre conclusions of a five- year study by university researchers into the effects of ICT on work and the community is that the adoption of new technologies tends to have either no effect or a negative effect on productivity – at least initially.

Waikato University professor Ted Zorn, who coordinated the just-completed $1.6 million research effort, which was paid for by the Foundation for Research, Science and Technology, says that appears to be an accurate generalisation for companies, communities and entire industries and economies.

"Economists have been arguing for years about whether investment in ICT in an economy has a positive affect on productivity and growth."

New Zealand invested heavily in ICT in the 1990s and first few years of the new millennium, but has "yet to see the benefits" in increased productivity, he says. "We are still waiting for the upturn.

"Many people might say that is not surprising, but the problem is people are sold on investment on the basis of – if not getting immediate impacts – very strong impacts in terms of improved productivity and efficiency."

A study by Canterbury University researchers Leslie Oxley and Kenneth Carlaw found that "in New Zealand, domestic economic growth does not seem to have a strong correlation with ICT in the period 1993-2001".

The cost of training and of running two systems side by side could have an impact, but Professor Zorn says the university would now like to study what more could be done to avoid the phenomenon. "What often happens is there will be someone or some group in the management or boards of these organisations who sees the potential that a technology has, and sees what it can do, but they don't have to use it."