| Long term growth in productivity is critically important to improving the standard of living of our society. Over the past ten years (1996–2005), average annual productivity growth in the non-farm business sector has been twice as high as it was in the prior fi fteen years (1981–1995). In the manufacturing sector, it has been even more spectacular, averaging about 4.4% since 1995.
There is much debate about the sources of productivity growth in the industrial sector from the 1990s to the present. However, there is general agreement among economists and business analysts that capital investment in information technology (IT) was one of the major factors. A signifi cant amount of time elapses between the development of a new technology and its diffusion throughout industry. The development of the microprocessor and its implementation in computers and industrial controllers began in the 1970s and early 1980s. The resulting productivity gains occurred with a time lag of two decades.
The 1990s saw an enormous increase in the number of industrial fi rms that implemented enterprise-wide information technology software. By some estimates, the number of companies investing in such systems had quadrupled when compared to the mid 1980s. These investments have had a signifi cant impact on the effi ciency of resource use within companies, the relationship between companies and their suppliers and customers, and the business strategies adopted by companies that use information technology as a competitive tool. For all these reasons, information technology has become an important subject in the academic training of engineers and industrial managers.
In order to place the current importance of IT into perspective, it is useful to review a little history. Thirty years ago, information technology was looked upon as just another labor saving tool, like any other form of mechanization. Early adoption of information systems was in the bookkeeping and payroll functions, where computers were substituted for accountants in maintaining and summarizing fi nancial records. In production operations, automatic control of processes based on analog electronics was being replaced by digital controllers, such as programmable logic controllers, which were more fl exible in supporting system maintenance and functional change. |
