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Reports of the New Economy's demise have been greatly exaggerated. Evidence from both the US and Europe indicates that IT was and is important to productivity growth, but that its primary role is as an enabler of innovation and competition. The shift from embrace to repudiation of a "new economy" has been rapid and dramatic. Before the NASDAQ bubble burst, assertions abounded that IT and the Internet were changing everything.
IT enabled impressive productivity gains in the US retail, retail banking, and semiconductor sectors during the 1990s. This report shows that IT was most effective when tailored to sector-specific business processes, deployed sequentially to build capabilities over time, and co-evolved with managerial and technical innovations incrementally.
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