Investing in the IT That Makes a Competitive Difference

by Andrew McAfee and Erik Brynjolfsson

IT’S NOT JUST YOU. It really is getting harder to outpace the other guys. Our recent research finds that since the middle of the 1990s, which marked the mainstream adoption of the internet and commercial enterprise software, competition within the U.S. economy has accelerated to unprecedented levels. There are a number of possible reasons for this quickening, including M&A activity, the opening up of global markets, and companies’ continuing R&D efforts. However, we found that a central catalyst in this shift is the massive increase in the power of IT investments.

To better understand when and where IT confers competitive advantage in today’s economy, ...

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