1. C e ntre for Research into Business Activity www.CeRiBA.org.uk 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. Outline 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?

3. Existing evidence on IT and OC Macro –IT raises PG but with lag –No direct data on org change 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

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

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

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

7. CIS3 data:Y, L, IT  (Y/L), I 1998-2000. Check against ABI data. M, use ABI I IT. 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.

8. CIS3 Data:  O 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.

9. Average innovative activity

10. Results (  lnL it,  lnM it not repor)

11. Robustness

12. Probit estimates of  O

13. IV

14.  O, IT and  I IT on TFPG

15. Conclusions Does  O interact with  k IT ?  k NIT ? 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