Introduction of Economics of IT Flashcards
What is the “New Economy” characterized by?
The transition from a manufacturing-based economy to a service-based economy and then to a technology and innovation-based economy.
What evidence suggests a shift to the “New Economy”?
Changes in communication methods such as Email, Zoom, and YouTube.
Productivity since 2000 has grown at a substantially higher pace than in the late 1990s
What does the term “Goldilocks economy” refer to?
A state of the economy that is not too hot or too cold, characterized by low unemployment and low inflation rates.
What are the current conditions of the post-pandemic economy?
The economy is still
too hot: high inflation rates
too cold: high unemployment rates
What do the current post-pandemic conditions indicate about policymakers’ challenges regarding economic growth?
They indicate an imbalance with both inflationary and deflationary pressures complicating efforts for sustainable growth.
What is the primary cause of the current high unemployment and inflation rates?
Primarily due to other economic factors rather than the development of ICT.
What does productivity measure?
Productivity measures economic performance.
It indicates efficiency in converting inputs (labor, capital) into outputs (goods, services).
What are some benefits of IT in business processes?
IT automates repetitive tasks, reduces processing times, enhances teamwork, and aids in decision-making through efficient data management, and scales resources
What is the potential downside of productivity improvement through IT with regards to their products?
IT implementation could diminish brand value and customer loyalty.
What is the significance of Brynjolfsson and Hitt’s findings?
IT investments may not necessarily lead to productivity improvements
What factors can delay productivity improvements from new IT?
Factors include the cost of learning, poor IT management, and ineffective use of adopted technologies.
What is Moore’s Law?
Moore’s Law states that the number of transistors on a microchip doubles every 18-24 months.
What is the current limitation of Moore’s Law?
The limitation is the issue of cost-effectiveness, as cost reduction is no longer feasible.
What is the Hype Cycle and its stages?
A graphical representation of technology maturity and adoption.
Stages:
Technology Trigger
Peak of Inflated Expectations
Trough of Disillusionment
Slope of Enlightenment
Plateau of Productivity
What does the Plateau of Productivity indicate?
It indicates widespread adoption of technology and tangible benefits being experienced by users.
