Beyond IT and Productivity : Effects of Digitized Information Flows in the Logging Industry

Abstract: The IT and productivity paradox has been the subject of considerable research in recent decades. Many previous studies, based mainly on macroeconomic statistics or on aggregated company data, have reached disparate conclusions. Consequently, the question whether IT investments contribute to productivity growth is still heavily debated. More recent research, however, has indicated that IT contributes positively to economic development but that this contribution is not fully revealed when only productivity is measured.To explore the issue of IT and productivity further, the ITOP (Impact of IT On Productivity) research program was launched in 2003. An alternative research approach is developed with the emphasis on the microeconomic level and information flows in processes in specific industry segments. In the empirical study, the development of information flows is tracked over several decades. Effects of digitized information flows are hereby identified and quantified in order to determine their importance in terms of productivity.The purpose of this study is to explore effects of information technology by studying digitized information flows in key processes in the logging industry. The research shows that several information flows in the logging process have been digitized leading to new ways to capture, use, spread, process, refine and access information throughout the logging process. A large variety of effects have also been identified from this development.The results show that only a minor part of the effects identified have a direct impact on productivity and thus that a large number of significant effects do not. Effects with a major direct impact on productivity include increased efficiency in timber measurement registration, lower costs of timber accounting and increased utilization of harvesters and forest resources. Other significant effects with no direct impact on productivity are related to a more open timber market, increased timber customization, control, decision-making and access to information, as well as skill levels and innovation. The results thus demonstrate that it is questionable whether conventional productivity measures are sufficient for measuring the impact of IT.