We have innovation on many different levels, from materials to hardware organization to software to marketing to organization design to overall regulation. Many seem to think the lowest hardware levels are key, and other levels mostly go along for the ride. But not only is software as important as hardware, neither help much without good firm practices:
US productivity growth accelerated after 1995 (unlike Europe’s), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in Europe also experienced a “productivity miracle.” US multinationals obtained higher productivity from IT than non-US multinationals, particularly in the same sectors responsible for the US productivity acceleration. Furthermore, establishments taken over by US multinationals (but not by non-US multinationals) increased the productivity of their IT. Combining pan-European firm-level IT data with our management practices survey, we find that the US IT related productivity advantage is primarily due to its tougher “people management” practices. … American firms have higher scores on “people management” practices defined in terms of promotions, rewards, hiring, and firing. (more)
Fixed; thanks
Dead link. The paper is "Americans Do IT Better: US Multinationals and the Productivity Miracle", Bloom et al 2012 https://www.aeaweb.org/arti... https://nbloom.people.stanf...
More 'automation as colonization wave' eh... You can't benefit from IT unless you reorganize how you do things, and that often means different people in different configurations and potentially less people.