A role of investment in intangibles: How can IT make it?

Research output: Working paperDiscussion paper

Abstract

The purpose of this paper is to demonstrate that the Japanese economy has fumbled their chance to reap the benefits of investment in information technology due to a reluctance to carry out drastic corporate reforms in business processes and human resource management associated with the introduction of new technology. For this purpose, we first review Solow’s productivity paradox and the new economy in the U.S., and then we compare these with the Japanese economy based on growth accounting analysis and an estimation of production function models. On top of that, we illustrate a series of firm-level questionnaire surveys to examine the decisive role of investment in intangibles, i.e., reforming organizational structures and human resource management, in line with IT investment. These analyses yield two observations. First, Japan’s investment in IT has been stagnant over the last two decades in spite of its potential to contribute to productivity improvement and consequent economic growth. Second, there is a strong complementary relationship between drastic corporate reforms and positive outcomes from IT investment, which Japanese firms have been fumbling. The results of this research suggest that the inertia of Japan’s integrated corporate system persists in the midst of innovation in information technology. Therefore, the Japanese private business sector needs to make an intense effort into investing in intangibles, i.e., a drastic redesign of business processes and human resource management in order to achieve the maximum effect of investments in information technology.
Original languageEnglish
Place of PublicationTokyo, JAPAN
PublisherInfoCom Research, Inc.
Pages1-20
Number of pages20
Volume2
Publication statusPublished - Jul 2015

Publication series

NameInfoCom Economic Study Discussion Paper Series
PublisherInfoCom Research, Inc.
No.2

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Intangibles
Human resource management
Business process
IT investment
Japanese economy
Japan
Production function
Investing
Productivity improvement
Questionnaire survey
Innovation
Redesign
Integrated
Business sector
New economy
Inertia
Growth accounting
Productivity paradox
Japanese firms
Economic growth

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

Cite this

Shinozaki, A. (2015). A role of investment in intangibles: How can IT make it? (pp. 1-20). (InfoCom Economic Study Discussion Paper Series; No. 2). Tokyo, JAPAN: InfoCom Research, Inc.

A role of investment in intangibles : How can IT make it? / Shinozaki, Akihiko.

Tokyo, JAPAN : InfoCom Research, Inc., 2015. p. 1-20 (InfoCom Economic Study Discussion Paper Series; No. 2).

Research output: Working paperDiscussion paper

Shinozaki, A 2015 'A role of investment in intangibles: How can IT make it?' InfoCom Economic Study Discussion Paper Series, no. 2, InfoCom Research, Inc., Tokyo, JAPAN, pp. 1-20.
Shinozaki A. A role of investment in intangibles: How can IT make it? Tokyo, JAPAN: InfoCom Research, Inc. 2015 Jul, p. 1-20. (InfoCom Economic Study Discussion Paper Series; 2).
Shinozaki, Akihiko. / A role of investment in intangibles : How can IT make it?. Tokyo, JAPAN : InfoCom Research, Inc., 2015. pp. 1-20 (InfoCom Economic Study Discussion Paper Series; 2).
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