( 5 reviews )
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( 1 of 3 found this review helpful ) Posted: Oct 13 2005
This book takes the position that increasing technological infrastructure and investing in higher information technology does not increase productivity. The argument is complete hokum from beginning to end; however, it is very convincing due to the large amount of evidence presented and the prestige of the pseudoscientist promulgating it. Most of the evidence presented exemplifies the post hoc ergo propter hoc fallacy, which should be obvious to any logician or scientist reading it. However, several more subtle fallacies are also present. The subtlety comes in by virtue of the author failing to define `productivity.' First, the author measures productivity using GDP. This is analogous to using the physics definition of work when you ask a man who's spent all day trying to tip over a mountain, "Why are you so tired? The mountain hasn't moved, therefore you haven't done any work!" GDP is a measure of output in terms of dollars. It does not measure work done, just how much was sold. Second, the author uses return on assets to analyze investments in new equipment. Now, I'm no expert in finance, but since assets is in the denominator, using ROA in the way this author does (the ROA of the firm, not the investment decision) would systematically understate the positive effects of these investments. Net Present Value or Internal Rate of Return would both be much better measures. Third, and this is related to the second point, the author compares firms to what they were in the past (before investing in technology) or to other, dissimilar firms. The relevant comparison is between a firm's current profitability and what the current profitability would have been if not for the investment. The common form of this reasoning is: XYZ Corp. made a huge technological investment in 1986, and experienced no rise in productivity (as measured by ROA). This ignores the possibility that the whole industry became more competitive, and failing to invest in the technology could have led to bankruptcy. In a related issue, he completely ignores rising standards. His argument is equivalent to, Finding Nemo did not make significantly more money than The Lion King. Therefore, enhanced technology did not increase productivity. This is incorrect because productivity is a measure of work done over time, not money made. If animators tried to make a film with the graphics quality of Finding Nemo by hand, it would have taken several orders of magnitude longer, if it was even possible! The fact is, the animators, like so many workers in society, get far more done today than they used to, they just don't get paid anymore to do it, which is actually an argument for the value of technology. I gave up on it shortly thereafter.
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( 2 of 2 found this review helpful ) Posted: Aug 13 2003
I read this book for the first time 5 years ago. I worked at a telecom company and everything he wrote on the paradox of IT investments not returning any money is 100 % true. So I bought 20 copies of the book and gave them to upper management. Needless to say it didn't really help.
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( 7 of 7 found this review helpful ) Posted: Apr 2 2001
Despite the claims of other reviewers, the evidence that the situation described in Landauer's book has improved since the surge in the internet and its sub-technologies (e.g., the Web) is absent. I'd refer the interested reader to a recent article in the New Yorker entitled "The Productivity Mirage" (J. Cassidy) to see some interesting numbers that bear on this question.It's not that IT investment doesn't result in productivity gains for some individuals, but that there's little evidence that it does much for most organizations as a whole. This is a point critics often miss, because most critics are computer-savvy and subjectively feel like they're more productive as a result of their computer use. Most of the problems outlined by Landauer still plague current information systems. This book is a must-read for anyone serious about user interface or IT productivity.
