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November 3, 2006
Changing productivity
The Wall Street Journal story this morning has an interesting anecdote on how productivity is shifting:
Instead of spending on information technology alone, businesses are focusing more on improving their operations -- investing in things like better warehouses, machines and logistics. Some of that investment helps them get more mileage out of previous advances in information technology. The flexibility of U.S. labor, product and capital markets also play a role by making it easier for companies to adapt and get the money they need to do so.
Take, for example, UPS. Together with an upgrade of its information systems, it is changing the way it packs trucks and plans routes. Among other things, this allows its drivers to avoid left turns, which burn up extra gas.
A perfect example of how technological innovation (IT) and non-technological innovation (different routes) combine to improve productivity.
Posted by Ken Jarboe at November 3, 2006 9:27 AM
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