Technology gave its first big boost to productivity on the farm, its next, on the factory floor. Now comes the hard part: services, in which it is rarely obvious how to rationalize work. Our annual survey of corporate R&D spending, which you can read online at /dec06/research, puts the question concretely: How can we help a barber to cut more hair?
Barbers, teachers, doctors, lawyers, closet reorganizers, and their like fill 83 percent of all jobs in the United States, and nearly as many in Europe, so it matters that their productivity lags behind that of their brethren in industry and agriculture. Even engineers, with their calculators and CAD/CAM programs, do not always outwork professional forebears who had only slide rules and drawing tables.
Many management experts say we should devote more of our research efforts to figuring out how people think, work, and think about their work. The biggest company betting on this approach is IBM, ranked 10th in R&D spending in a list compiled for IEEE Spectrum by Standard & Poor’s.
Senior Editor Harry Goldstein and Ron Hira of the Rochester Institute of Technology, in New York state, took a close look at Big Blue’s effort. They found that it now devotes a quarter of its R&D budget to services, up from practically zero three years ago. It is hiring so many anthropologists, sociologists, and economists that it has created new, nonengineering titles for them, together with a new academic discipline, called ”services sciences, management, and engineering.” The company is trying to convince leading universities to offer courses in it.
Perhaps the first clear sign that such rethinking was in order came in the 1980s, when companies invested billions to put a PC on every desk, yet got no discernible return. Some industries, such as insurance, even registered losses. In 1987, the Nobel laureate economist Robert Solow complained, ”You can see the computer age everywhere but in the productivity statistics.”
You can see it there now. Still, people did take their sweet time in making the most of their computers. It seems they started by trying to transpose old modes of work—say, by using the word-processing software to write, print, and mail a letter—and only later appreciated new modes, such as e-mail.
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