The “Commoditization” of IT Lowers Corporate Spending in U.S., Technology Review’s Jason Pontin

By on 01/26/2008 8:11 AM @beet_tv

Investment in information technology has slowed in recent years and will slow more in the months ahead with the prospects of a recession, according to a report by Steve Lohr in today’s New York Times.

While this belt tightening may be tied to an economic cycle, Jason Pontin, editor of MIT’s Technology Review,  says that the issue is that information technology has become commoditized in the United States and Europe.

Moreover, the effect of technology on productivity has slowed.  Innovation to drive the economy may come from other sectors including "green" and biomedical, Pontin says.

He says that technology investment in India, China and Africa is booming and leading to extraordinary growth in productivity.

Some economists say that the IT revolution is over. IT drove productivity over the past 15 years at nearly 3 percent — and has dropped to around 1 percent.  Here’s Beet’s interview with Dartmouth economist Andrew Bernard who explains the relationship between technology and productivity.

We wonder when the next revolution will happen.

– Andy Plesser

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