Economic Payoff From Technology Is So Elusive

Description:  Your smartphone allows you to get almost instantaneous answers to the most obscure questions. It also allows you to waste hours scrolling through Facebook or looking for the latest deals on Amazon.  But for several years, economists have asked why all that technical wizardry seems to be having so little impact on the economy.

Source: NYTimes.com

Date:  June 5, 2016

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But for several years, economists have asked why all that technical wizardry seems to be having so little impact on the economy. The issue surfaced again recently, when the government reported disappointingly slow growth and continuing stagnation in productivity. The rate of productivity growth from 2011 to 2015 was the slowest since the five-year period ending in 1982.

One place to look at this disconnect is in the doctor’s office. Dr. Peter Sutherland, a family physician in Tennessee, made the shift to computerized patient records from paper in the last few years. There are benefits to using electronic health records, Dr. Sutherland says, but grappling with the software and new reporting requirements has slowed him down. He sees fewer patients, and his income has slipped.  read rest of story

Questions:

1. Why is the Economic Payoff From Technology Is So Elusive?

2.  Can you think of any industries or examples where the payoff from technology has been felt?Why?  or why not?

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67 thoughts on “Economic Payoff From Technology Is So Elusive

  1. Jordan Doram

    The economic payoff from technology is so elusive because although the intention of it is to increase productivity, there are many companies that are seeing a decrease in productivity instead. Most employees have a hard time at first adopting the technology and getting used to the programs that comes with it. Especially in the example in the article with the doctors, most of them are at an older age and are not used to the rapid increase in technology. This is causing their productivity to decrease substantially by seeing fewer patients, which is not beneficial for anyone. There are several instances that companies face with the issue of managers taking extra time in to learning the new technology and then teaching the supervisors how to properly use it also. Then the supervisors must teach all their employees how to use the technology. During all this time and the trial runs of the technology, companies are faced with the decline in sales. However, there are also many companies that have benefited from the technology introduction such as fast food joints. They are taking advantage by using automated ordering machines and ordering online mechanisms. The problem is that there are more companies struggling than there are succeeding with the technological advancements.

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  2. Keshah Austin

    After reading this article I realized how far behind the health care industry is in with their use of technology.  That being said I am not really shocked. With the health care field there are just some things that cannot be replaced by technology.  And even though we are now at an age where technology is imperative in our life, I know there are just some things in the medical field that I would feel incredibly uncomfortable if it was not done by an actual person. What I believe was the focus of this article was the health care records being digitalised.  I think this is a very smart idea. Having the ability to have consistent, and all across, access for medical care providers is beneficial to everyone involved. But to move to a world where everything is not without costs. It is difficult and financially costly to move in this direction. But what the health care industry needs to realize that it will be short term pain for long term gain. It is the initial expense to move in that direction that appears to deter those to move. This is a possible cause to why economic value appears to be not worth it. Another industry that seems to have a terrible payoff from technology is the music industry. With the use of technology we are able to get free access to music that causes effects on the artists. Another industry with negative ramifications from technology is the DVD industry, I mean look at Blockbuster, because of technology and Netflix they no longer exist. So is technology good? Absolutely, it just needs to be used accordingly.

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  3. Leigh Muirhead

    I think that the economic payoff from technology is so elusive for a few reasons. Firstly the immense expense to purchase, implement and maintain technology that is up to date is both capital and time demanding. Especially, since technology is continually adapting and changing it is crucial to keep up to date to ensure effectiveness and efficiencies. The lack of return measurement also leads to the elusiveness of technology payoff. Customers have to ensure the cost to implement and maintain will have greater payoff compared to current ways, future payoff must be considered in the perspective. I think there is stigma associated with economic payoff and technology, people are worried that technological efficiencies are going to be of more value to organizations than human efficiencies. I think this worry definitely contributes to the elusiveness towards economic payoff from technology.

    Personally, I have seen the payoff of technology in my workplace. I work at shoppers as a beauty advisor and we use to maintain paper copies of client records and past purchases. This took much time and effort with limit payoff due to ineffectiveness and inefficient methods. Thanks to new technology systems we can now quickly look up out clients on the iPad and see past purchases, make recommendations, keep notes and preferences, invite them to events and even order products from the store straight to their house. We now actually use the information gathered to better monitor customer behavior, encourage brand loyalty and customer satisfaction, which can be directly correlated to increases in sales and therefore increased revenues.

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  4. Alex Geates

    we all thing of technology as fast and simple. because for the average individual with as smartphone and a laptop it is, you can message instantly, stream instantly, access information instantly. however when it come to productivity in the workplace it seems, especially in agriculture, that the newest technology is about as efficient at as a commodore 64 and ten times more confusing. I believe this is because the profit margins do not allow for adequate testing and interface design. this is why we are not seeing the payoff

    Industries that included online sales have benefited greatly from technology. The process in this instance saves labour hours at a store and customer hours by getting to the store. The majority of the transaction occurs online with little human input. This is one area where technology has made a payoff

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  5. Jessica L

    What reading this article, I couldn’t help but think of my dad’s chiropractic office in Saskatchewan. I was there and helpped in the transition to becoming a paperless office. I remember scanning what seemed like an endless amount of patient files into the new computerized system. This was a beyond tedious task, that truthfully took months. “Why don’t we just start fresh?” Is what my younger self would ask dad. At that point, I hadn’t realized that the files needed to be kept for x amount of years by federal regulation. This is one way that I could see the switch would be a time-consuming task and a difficult task. You couldn’t simply turn your head on the old ways and jump all into the new. The transition period was difficult.
    All of that being said, I definitely believe that the office is more productive because of the switch. The receptionist is able to book patients and bill them from the same computer I system. She’s able to very quickly schedule A mass amount of future appointments. For example, if the patient were to come in for an appointment every Tuesday morning at 10 o’clock, that would be a very easy entry to make. Previously, the paper scheduling book would require more of her time and attention. Another way that the switch has helped in the office, is that other Services are available. Previously, any extra time would be used writing in patients files, or catching up on paperwork. Now that time is able to be utilized in other ways that allow for a better patient experience. There are different technological tools that are used to help show, and measure the patients improvement. The really nice thing, is that these improvements are easily tracked and measured and displayed with in a computer program. They can be showed and explained at the office for a patient can go online and see them as well. Although my dad doesn’t see oodles more patients in the day because of technology, I know that he is providing a better, more complete patient experience for the same amount of patients that he does see.

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  6. Simone Bowes

    The economic payoff from technology is so elusive due to slow rate of adoption, organization and probably habit formation. Dealing with different generations also affects the adoption rate, as some have the view if it is not broken why fix it? Combined with – as the article points out – people confusing automation with productivity, without perhaps analyzing how they normally provide inputs and receive outputs and therefore figuring out how to best train their staff and integrate technology into their production. The security perhaps of technology also frightens people, as it is only as secure as you make it. One industry definitely feeling the payoff from technology would be Big Data, as they are able to collect the data, while perhaps introducing other technological processes, from activities that are already happening. So if they are already using technology and capital to figure this stuff out, without having to change any of the processes of a company, why would a company choose to update their tech if they can just buy that information more cheaply? It was interesting to note at the The Future of AgTech: Discovering New Opportunities Agility Innovation Summit that they were mostly seeking HR and sales persons to come work for them. Ironic that they were developing all of this technology that would benefit farmers and organizations, yet they vitally needed that human element to actually sell the technology. Perhaps then the problem is that organizations are attempting to use too much technology in place of human interaction.

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  7. Layla Lahiji

    Technology has many different purposes, and for each industry, the purpose is different. Some industries have complex technologies that take a lot of time to adopt, whereas others use simple technology to advance significantly. For example, as stated in the article, the technology in a doctor’s office is a lot more complex than technology found in a communications profession. More time will then need to be devoted to learning the technology. This could take away from patient care, employee free-time, or both — decreasing productivity of the firm. Another factor that influences productivity and technology acceptance is age. Generally, the older the employee, the more resistant they will be to technology. Younger generations are taught more about the various technologies in school. This is especially prominent in communication professions. Younger employees have grown up with different methods of communication such as Twitter, Facebook, Instagram, etc. It takes older generations longer to adapt and learn the tricks that the younger generation grew up with. In these professions, I believe the Economic Payoff has been felt. We are able to communicate in real time with a vast, international audience. In professions that require more advanced technology, I think efficiency will come later. It is changing at such a rapid pace that we are constantly learning the new improvements and always having to readapt. Once the technology plateaus, it will be taught in schools and students will be able to practice these efficient methods without compromising the care of the patient or their life-balances. With minimal training sessions to do in the workplace, the future generation will become more efficient with the high-technology methods and will be more economically profitable.

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  8. Robert Mercer

    I believe the economic payoff of technology is elusive for 2 reasons:

    The first is reason is caused by the initial cost of integrating the new technology. Some may not think the benefit of updating there old processes is worth the upfront cost. A rather ironic example is when the president of a Michigan bank advised people not to invest in Ford motor company in 1903, saying “The horse is here to stay but the automobile is just a novelty. The example in article brought up hospitals shifting to electronic health records. Combat the reluctance, the US government provided incentives to adopt to the new electronic records.

    The second reason for the elusiveness of the benefit of technology is the time lag between when the technology was introduced, and the befit seen from the technology. In the article, the Dr. interviewed actually saw a drop in revenue. He found he could not type as fast as he could write. Each appointment took him longer. He then, adopted voice recognition software which also took him a while to figure out. I would associate this lag between the introduction of the technology, and the benefit seen, as the learning curve associated with figuring the new technology out. Once the Doctor figures out the new software, I’m sure he will see the increase in efficiency.

    The printing press is an example of a new technology (at that time) where the payoff had a huge impact on the world. It exponentially increased the speed at which books and documents could be copied and allowed ideas and knowledge to be quickly disseminated. Reading was no longer a luxury and literacy and IQ of the common person drastically increased.

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  9. Spensor Griffith-Cochrane

    There can be a number of issues gaining economic payoff from technology, one major issue is the rate at which technology needs to be adopted and upgraded in order to only remain competitive, let alone gain a competitive advantage in any way. Unless you are developing the technology, or the first in your industry to adopt the technology it can be difficult to recuperate the costs put into implementing the technology before it is obsolete again. It has become an unfortunate cost of doing business in today’s markets. Another reason there is a disconnect could be due to technology illiteracy, in many cases the technology might just be too new, and people are not sure how to fully utilize what is available to them to increase their productivity by a noticeable margin.
    There are a lot of industries that have benefited from technology, one of the industries that I think have benefited the most is the advertising industry. The industry is now able to much more effectively spend their advertising efforts by targeting add campaigns toward individuals who might actually purchase the product they are trying to sell. An example of this can be Facebook or Google, both company’s use algorithms to connect businesses with individuals by pairing an individual’s preferences with choice key search words advertisers are able to make sure that the right add gets placed in front of the right person at the right time. Something that would only have been a faint dream 40 years ago.

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  10. Michael Isfeld

    I believe the economic payoff from technology is so elusive due to the fact that it is expensive to get up and running. First of all, it consumes work hours which is expensive in and of itself. The entire business needs to switch from their old system and get used to a new which doesn’t happen overnight. Second, if the business needs to hire an outside source to train the business how to use the new system not to mention any workers who may mess up while using the system and any time lost up until every person using the system becomes proficient in its use. Second of all, the money that needs to be used to buy the new technological system and have it installed. Between those two factors, it costs a business a lot of time and money to put a new system in place and the economic payoff wouldn’t happen until both of those factors were completed, plus the amount of time it would take to breakeven on the two factors.
    The industry that comes to mind is the food service industry. Restaurants and bars have started using POS systems to seamlessly go between the waiting staff and the kitchen staff, to keep track of what gets order most from the establishment, to keep track of inventory and possible waste, among other things. The main reason a POS system in the food industry pays off is because it is a fairly simple system to get used to. Because it is easy to use, its relatively low cost to a food establishment, and the fact that it immediately starts to show results, the food service industry is one that has felt a payoff from technology.

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  11. Cole Malaka

    1) The economic payoff from technology is so elusive because individuals and industries are still in the beginning stages of adopting and using new digital technologies. If you are a doctor and have been using traditional pen and paper for the last “x” years it will take a while to get used to the new technology. Keep in mind the sheer number of people who also have to learn this new technology. In particular, people of the baby boomer generation are so accustomed to using traditional pen and paper technology that this shift is extremely dramatic and difficult to grasp and learn. However, from what this article suggests, it will not be long before we begin to see the economic payoff. The Doctor in this article claims he is a better, happier doctor. While he is making less money now, the fact that the quality of his work is improving as a result of technology will soon pay off. Better quality work = a better customer response and eventually more customers. So while adoption and implementation of these new technologies is “hiding” the economic growth the potential is still there and it will not be long before we begin to see the real gains that technology has to offer.

    2) The fast food and grocery industry have both implemented self order/check out services. While a lot of people complain about this due to job losses I am willing to bet that the companies who have adopted this service are beginning to see the payoff. A typical 4 lane checkout costs approximately $125,000 USD. This is according to a study done by MIT (http://web.mit.edu/2.744/www/Project/Assignments/humanUse/lynette/2-About%20the%20machine.html). In the grand scheme this is nothing. This is 4 cashiers the company doesn’t need to pay for years to come. It also shortens lines, speeds up checkout in general, and gives customers a choice. Once again happy customers= more business! Although we haven’t seen a ton of data yet on this technology, we are already feeling the results of it, and I’m sure it won’t be long before we begin seeing actual numbers on how much money this is actually saving companies.

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  12. Amanda Brown

    Technology has had very noticeable payoffs in the past such as when electricity was made, since then our technology has continued to evolved. However instead of making leaps and bounds it’s steadily moving in an upward direction. I think that even now we are making good progress on technology but it has become more elusive to some people because its focused on specialized technology. An example of this would be the transition of the ‘”brick” phone into the IPhone, this transition was publically viewed since its technology we use every day. Currently our advancements are in things such as big data, which is not common knowledge. Few people are even aware that data is being collected on them let alone do they know the applications of this data in technology advancement. I think an example of this in my life would be at McDonalds where they have touch screens that take your order and you can scroll through the menu. I think that by doing this the company sells more food since you have a full view of all the food. I also think it improves efficiency, instead of needing to pay 2 or 3 cashiers for a day of work you can concentrate your workforce in the kitchen to make meal times faster. Through the replacement of workers by machines McDonald is able to reallocate its resources to better suit the customers needs.

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  13. Kemorine R

    The economic payoff from technology has been elusive because of the slow rate of adoption. While we can all for the most part agree that technology can help to make businesses more efficient and effective, the initial cost of acquiring it can be quite expensive. Whether you are purchasing software or new machinery, the cost involved in purchasing and then training employees to use it can be quite high. For this reason the payoff from technology may seem to be elusive, particularly in the short run. However, as people become more accustomed to using it, it will be easier to navigate and business will be better able to reap the benefits of being able to provide better quality and customized services and products to their customers/clients.
    The rate of adoption is also influenced by the type of industry that you are in. Industries that are already in some ways technologically managed, such as media and financial services would have a greater rate of adoption. This is because they are likely to already use some form of technology in their operations, it would therefore be easier for them to make improvements and maximize opportunities for profit. However, industries that have an emphasis on face to face interactions such as healthcare and hospitality would have a harder time figuring out how to utilize technology in a manner that improves rather than takes away from the services that they offer. With this in mind there needs to be more work done to design software and machinery in a manner that is easy for people to understand and manipulate. The less time it takes for someone to figure out how to use something and see the benefits of it, the greater the chances of them incorporating its use while performing business activities.

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  14. Alyssa Snyder

    There are many reasons for the economic payoff of technology to be so slow. I believe that the main reason for this is that many different jobs do not know how to efficiently run their technology due to a lack of training and thus it slows them down in the long run. For many industries, there was such a fast jump between different pieces of technology that were incorporated into their business that many people did not have the time to be properlly trained onto the new system.
    One place that I can think of where the technological advances have paid off would be Mcdonalds with their processing machines such as their automatic drink dispensers. They have had these electronics long enough that the economic value would have been realized, and the training that would be required to learn them is very minnimal. I also believe that many of the stores, especially retail ones that have introduced a POS system have realized their economic payoffs because it substantially decreases the time needed for every transaction.

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    1. Greg Benty

      I can think of a number of industries where there has been payoff from technology. Take Tim Horton’s for example. The drive thru times would not be where they are today without technology. When I worked at Tim Horton’s we always had a clock keeping track of the average window time at the drive thru. If we were working at a slow period we did not focus on meeting certain averages, but when we were in the morning rush we did. We were rewarded Tim cards if the average was under 30 on weekends and if the average was under 25 on weekdays. Technology allows us to take a customer’s order before they are at the window. As they are ordering we are serving the customer in front, and preparing the next customers order. The development of the headset allows us to maintain a flow in drive thru that allows us to serve more customers per hour. Without technology the drive thru would operate much slower than now. Think of credit cards now and how much they have advanced. Now a customer can roll through the drive thru order a double double, come to the window, tap his card on our debit machine, grab his coffee and head out faster than before. At Tim Horton’s they use tech to even punch in the orders, rather then memories thousands of codes, you just have to look for the button on the computer screen and punch in the order. This saves lots of time in training and is just one of the many reasons tech has improved working environment.

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  15. Raj Pannu

    I think with this new technology that is coming out constantly it is a learn and curve system. The older generation that is still working that didn’t grow up with the internet and all this new technology that is coming out are having a very difficult time adapting. Even with growing up in the age of the internet I find using some phones and computers very complex. Also with the large variety of technology that is coming out each one has its own unique thing about it. I am a apple user and that is what I have been using for as long as I can remember. If you were to give me a different phone other than an IPhone I would have some difficulty using it since I am just so use to how apple iPhone are. So with the older generation not growing up with these devices when they are forced to adapt to this new technology of course it will take them time to figure it out, but I believe once they can get a grasp on how to work it they will become more efficient in the work place. The first company that I can think of that has recently been experienced a payoff from new technology is fast food restaurants like McDonalds they now have a giant screen where you can order off of instead of going up to the counter and talking to a person, this has made McDonalds much more efficient since they can have four machines taking orders at one time rather than the one or two they usually have.

    Reply

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