Friday 4 March 2016

Weekend Reading: IT, Productivity and Values

Just recently, FT Alphaville has carried some excellent essays by our old friend Izzy Kaminska.  (Back in the old days, she used to link to us ... *sighs*).    Here's one for the weekend: after starting out on cybercrime she gets to the vexed issue of whether IT actually drives productivity, or just redistributes wealth around the place.  It (or even IT) may be all about the metrics: how is 'productivity' measured (and valued)?  That question can be posed two different ways.

-  If we understand (and value) productivity in the usual economic ways, then in the light of that value-paradigm & its metrics - what's the answer on productivity?  
-  Or, flipping that on its head, does it (IT) point us to valuing things in different ways to how the economists traditionally do?
"The technologists instead claimed the economists were too set in their ways to recognise the real truth: the world was experiencing the dawn of a ‘new economy’ in which ideas were becoming more highly valued than material resources."
Well: maybe, on a good day ... but then again, I am sure we have all seen examples of IT projects chewing up productivity however defined, along with material resources, 'ideas', reputations, careers, sleep ...  and on a grand scale, too.    Anyhow, read on!



dearieme said...

Spreadsheets allow people to make a good living in financial jobs who would earlier have been excluded because of their inability to do the most elementary algebra, and any arithmetic worth mentioning.

What evolution left out, spreadsheets put in.

Raedwald said...

ooooh! We're in the realm of Alvin Toffler, rubber sheets, quantum and Brazilian butterflies here!

Having experienced the entire gamut of IT staring with 9" green-screen IBM PC back in the early 1980s (with Lotus 123 loaded from a 5" floppy disk ...) to cloud enterprise solutions, from the first interweb in 1995 when it took half an hour to download a small .jpg of the KP nuts lady without her vest on to Hi-Res intercontinental skype conferencing, I can confidenly proclaim that IT has been of major benefit ... in creating IT jobs

As to whether the total cost of IT is less than the total value of productivity improvements, I'm not sure. The NHS model, of £1bn of IT investment realising £2m a year of productivity improvements, is not unique. It depends, as economists say, on where you put the boundaries.

Yes, I think IT is taking us somewhere very new at breakneck speed. But I have a lingering concern about all that unshielded electronic circuitry and the risk of dependency on something that could be rapidly destroyed by natural or man-made EMF, and a lingering fondness for robust electro-mechanical tech ...

Barnacle Bill said...

And of course Radders if the lights go out the IT goes off!

Unless of course you have invested massively in back up power something many SMEs cannot aspire to. Don't forget even if we only suffered "Brown Outs" the effect would be almost as bad a a pure "Black Out".

Anonymous said...

Most IT problems are down to the business. Projects are generally badly managed, internal customers demand unrealistic timeframes and then complain about lack of delivery, systems are designed according to managers demands rather than users, recruitment and purchasing are handled by people with little actual knowledge... I could go on!

Wildgoose said...

I'm sorry, but this article is nonsense.

It talks about failing to see productivity gains in the economy down to IT, but also fails to consider that when you leap into the air, you first crouch down.

A lever is a means of amplifying muscles. A basic mechanical machine is a device for replacing the "grunt work" of muscles, whether human or draft animal, with the later more advanced devices replacing skilled work such as weaving and so on.

A computer is a lever for the brain. Basic computers have been used to replace mental "grunt work" such as matching invoices, typesetting, or what have you. The more advanced devices now being developed are beginning to replace skilled mental work. The real IT changes are only just starting, and those who are stuck in past ways of thinking simply aren't equipped to appreciate just how radical the coming changes are going to be.

We have just read a lot of fluff about "cyber-security" as if criminals are the biggest threat. Rubbish. Legitimate Governments and powerful corporations are a far greater threat.

The East German Stasi employed huge numbers of people trying to monitor and control their population, listen in to telephone calls and what have you. It was an impossible job. Fast forward to the future and IT systems can perform speech-to-text translations, index key words and then save every single telephone call we make, (text is highly compressible). And you are worried about some back street hacker?

The reason why so many IT professionals like myself opposed the government's ID card plans wasn't just because of the obvious point that if you allow somebody else to affirm your identity, you also give them the corresponding right to remove that affirmation, thereby making you a non-citizen and depriving you of access to all kinds of service from Health to your own bank accounts. No, it was because one of the primary purposes was being able to tie together every kind of database and system by the same universal ID and provide a more perfect panopticon for the State.

I could go on, but I think I've said enough.

Electro-Kevin said...

Since most searches are for porn I doubt that IT has increased productivity overall.

Demetrius said...

Snap, before checking your blog I put up a brief one with a link to a long one on IT and advertising. It is a messy old world.

Steven_L said...

Perhaps, on some respects "productivity" is a negative sum game? I mean if the council waste a load of money on some silly ICT project, thus decreasing, their productivity, does the ICT company increase their productivity by the same amount?

Since most searches are for porn I doubt that IT has increased productivity overall. (EK)

But does the porn increase the total amount of orgasms or decrease them? And for what expenditure? Does online porn increase or decrease the total amount of old fashioned, sex? And how are you measuring "productivity" here? The number of pregnancies, the number of orgasms or the number of actual shags?

Other than making widgets, I've never understood the concept of "productivity". In the service industry it seems a very malleable concept.

Steven_L said...

I'd also add that the 16GB Apple I'm typing on produces a lot more per KWh of juice and minute of my times than my first ever Acorn Electron 32b ever did. But I still don't understand how either of them work.

I reckon these days that only machines, boffins and Chinese folk actually do much 'work'. The rest of us are just along for the ride and incapable of understanding how things work. Back in the old days the man on the clapham omnibus understood the state of the art technology. Levers, pulleys and steam engines weren't all that complicated. Now we all rely on things that less than one in a thousand folk are clever enough to comprehend.

andrew said...

I think the lovely Ms K is trying to encourage us to consider what productivity is
- does one 'good' film created without cgi really have less 'utility' than to 'shit' cgi laden films?
- how many dvd players / ipads / shoes do you really want

leading us on to consider what value is
- managing your online account (for anything) is great (saves you time, the company money etc) until you want to do something that is not in the defined workflow, and we are now at the point where some smaller websites do not have a phone number.

Sometimes she wants us to move on to "what is money"

Today she wants us to move on to IT
What is IT?

I will have a go

IT is something you do with a computer that allows you to get something done so much faster and or cheaper than you could manage without IT, you wouldn't have been able to make money

I do not claim IT is categorically different - and I think Ms K thinks this too. IT allows us to do bad things a lot more quickly, cheaply and with fewer negative consequences, but they are all bad things we could do before - in the 1800s threats were wrapped in a brick and posted by mail (high cost to sender) or posted through a window (high cost to receiver)
Now you can just set up an anonymous twitter account.

At this point I think we diverge in that I have the feeling Ms K would opine that there is nothing new here that has not been done before - albit more slowly/more costly/for fewer people.

I disagree.

I think we are in the early stages of doing things that would simply have been unthinkable before - and this is meant quite literally

I will leave the expansion / proof to ramanujan

Steven_L said...

IT allows us to do bad things a lot more quickly, cheaply and with fewer negative consequences (andrew)

You're making an assumption here - that there is such a 'thing' as 'good' and 'bad'. There isn't, 'good' and 'evil' are just opinions. For example, in mainstream western culture homosexuality is not 'evil' and people who persecute homosexuals are 'evil'. This is not the case in other cultures. Most people agree that random killing and cannibalism are 'evil'. But the few people who like doing these things might think otherwise. There is no such thing as good and evil, there are just individuals and their differing opinions.

As a practical example, mobile phones and the 'dark web' have probably helped drug dealers increase productivity. Even if you use modern technology to make and sell horrible snuff movies, 'productivity' can still be measured using normal economic/accounting models. You can still profit and you can still make a loss.

Once you try and bring 'good' and 'evil' into it, well, herein lies the route to insanity.

Electro-Kevin said...

Electro-Kevin said...

828,000 national insurance numbers issued last year.

We don't want efficient methods, automation etc. At this rate we need job creation !

Anonymous said...

A case of The Law of Diminishing Returns. We have got rid of filing cabinets (big scale), serried ranks of clerks and typing pools. That was productive. Now everyone (except government) can make their IT systems at least good enough, they should be looking elsewhere for productivity improvements.

Remember that the first thing every software salesperson said to a client was "Repeat after me. Here is my wallet, help yourself". The great days of IT are long over and passed on to the consultants - who's salespersons use the same pitch. But there are hints that the great days of consulting are also coming to a close (except in government). Everything changes, time to move on.

Raedwald said...


1. Managers hoard old paper consultancy studies / design outlines / research papers knowing that the knowledge is recyclable and can be reused. We've all had a cupboard / draw of these.

2. The cost of devoting 20% of your London office floorspace to storing paper shocks FDs. Edict to go paperless; all hard copy to be boxed and sent to Iron Mountain in Scotland, or shredded

3. Digitisation is not an option - too costly. Indexing is sketchy and partial. The company archivist has been made redundant.

4. Manager needs some research figures for new scheme; these were comprehensively detailed in a bound report now in a box somewhere in Scotland. Without ordering 40 boxes and searching through them, the info is lost.

5. Manager spends £45k and commissions duplicate study, probably from the same consultants if he remembers their name. Gets decent lunch and kudos.

6. Everyone is happy. Delay is only about 6 weeks.

CityUnslicker said...

I agree though, economists are in a state of illusion about what productivity consists of I do about 3x the work each day that I used to do thanks to modern technology.

For economists this means that productivity has either fallen (less people working overall in the economy, so overall a lower productivity rate at national level)

or more accurately does not exist. nobody measured what I did before either, so the whole lot is in a too complex box.

the net result is some very dodgy data, declaring FRANCE the most productive economy in the EU. France, where no one actually does anything, but very good at philosophical economics it turns out.

andrew said...


herein lies the rub

Back in the 'old times' proto CU could drag Xkg (yes, Kg) of stuff through the trackless wastes. He (no gender implied, this is a safe place) could get Ykm before the stuff got too soggy (for this is still England).

Then some a***** invented wheels.
Now proto CU can pull 3Xkg of stuff and could get 3Ykm and say he gets 3x as much done.

At time 1, this is undoubtedly true, you are getting 3x as much done and 3x value.

At time 10, this is undoubtedly NOT true, you are getting 3x as much done but vlad from Romania has invaded your markets (this place being nominally eurosceptic it had to be a european), so proto CU is still doing 3x as much but not getting 3x the value anymore.

At time 50, the disgusted CU dumped a load of spare leather (surplus goods), at time 100 Ms proto CU made some impaler protectors and at time 150 proto CU gleefully sold a sledload to Vlad.

the short version:
A lot of capitalist innovation/progress comes from the better use of surplus stuff.
The really interesting innovation comes from the 'second generation' who better see these surpluses.

The really interesting thing for me is:-

1- a lot of innovation at the moment is around removing all waste (surplus) from a process - so where is the waste that gets better-used in the next innovation

2- really big data is partly being build around identifying associative connections from massive datasets that are so diverse a human (or a large group of humans) would almost certainly never identify that link without largescale computer assistance.
This is what I meant when I said
"I think we are in the early stages of doing things that would simply have been unthinkable before - and this is meant quite literally"
and this is imo genuinely new

JS said...

Unrelated, Nick, but interested to hear your take on the EDF resignation at the weekend. Do you think its just a clever ploy ?

Nick Drew said...

will post on this later in the week, JS