Takeaway: Evidence is mounting that technologically illiterate managers are causing more damage to corporate productivity than a shortage of IT skills among staff.
Lacklustre IT skills among staff are often blamed for hampering corporate productivity but evidence is mounting that managers who are clueless about tech are causing greater damage to UK plc.
US firms are using IT to boost their productivity more effectively than UK companies, according to studies cited by the recent Technology Insights 2012 report by IT industry skills body e-skills UK.
The report references two recent papers: “One such study undertaken by the LSE [London School of Economics] found that, ‘US multinational firms are on average 8.5 per cent more productive than UK domestic-owned firms, and that almost all of this difference is due to the higher productivity impact of their use of ICT’,” the report said.
“Further research by the Office for National Statistics also concluded that over 80 per cent of this productivity advantage is explained by better use of IT.”
Dr Jonathan Liebenau, reader in Technology Management at the LSE, said the findings demonstrate the importance of managers knowing how to maximise returns from computing technology.
“A British manager would ask their employee: ‘Do a nice spreadsheet of this so I can understand the data and make some managerial decisions about it’,” he said.
“What does the American manager do? He doesn’t do 1,000 times more, he just asks for two per cent more effort. He says, ‘Do a spreadsheet and build me a little model so that we can have a dynamic demonstration of alternatives’. It’s little things like that that make the difference.
“It does make a big difference if the manager knows what question to ask. It’s not just, ‘What’s the output on last month’s investment?’ but, ‘Can you sit down with me and we’ll do a dynamic model that allows me to play around with different kinds of inputs for the coming quarter’.”
Other statistics support the idea that it is not access to IT that is slowing UK productivity gains. Britain placed eighth on the most recent technological readiness international competitiveness rankings by the World Economic Forum.
Liebenau said the UK’s relatively ready access to IT reinforces the argument that the gap between US and UK productivity stems from “a managerial failure more than a problem of skills shortage among employees”.
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