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Unformatted text preview: 47 Office for National Statistics Economic Trends 609 August 2004 E-business and labour productivity in manufacturing and services Peter Goodridge and Tony Clayton Office for National Statistics New firm level analysis based on data from e-commerce surveys has shown the value of using Information and Communication Technologies (ICT) to link business processes on labour productivity. Earlier work in this area focused on e-commerce (buying and selling over electronic networks). More recent surveys have broadened the use of electronic business processes. They show that the use of e-commerce by firms, after high levels of initial trial and error, has begun to stabilise. While adoption of e-business processes is now widespread among larger firms, their labour productivity effects vary by sector. This article summarises work based on the 2001/02 surveys. It outlines a research programme on other ICT indicators and their impacts, whose results will be reported later. Introduction Analysis of Office for National Statistics (ONS) micro-data suggests firms with automatic links between their e-commerce networks and operating business processes enjoy higher labour productivity. However this is not true for all process links, and depends on firm size and sector. Previous ONS work in this area has been limited to narrower analysis of e- commerce, the buying or selling of goods via electronic networks (Criscuolo and Waldron, 2003). However the potential of electronic networks lies in how they can transform the operations of an enterprise, not just its transactions, and e-commerce is increasingly seen as just one of many specific applications of e-business. International work in this area includes a study by Atrostic and Nguyen (2002). They show, using the 1999 US Bureau of Census Computer Network Use Survey (CNUS), that: computer networks in firms have a positive impact on Total Factor Productivity (TFP) only half such networks were used for buying or selling. Growing case evidence suggests that integration of business processes through computer networks, with organisational and human capital investments, promotes gains in labour productivity (Brynolffson and Yang, 1999). The concept of a firm with integrated systems linking production, distribution, procurement and sales functions making operations more efficient is supported by international case studies. Automatic processing and sharing of such information may help improve labour productivity if the technology is applied appropriately Up to now, statistical analysis of these effects has been limited by lack of large sample surveys, and also by rapid changes in ICT use by firms. Both these limitations are addressed in this article....
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This note was uploaded on 05/20/2010 for the course MARKETING 107 taught by Professor Vivian during the Spring '10 term at SCA NC.
- Spring '10