Abstract
Information and Communication Technology (ICT) affects the global economy and the business world enormously. In particular, the impact of ICT on work organization has been in the spotlight since the widespread introduction of computerized systems two decades ago. However, the relationship between ICT and organizational factors has not been indentified clearly. This study aims to investigate possible complementary relationships between ICT diffusion and organizational factors such as: labor, firm organization, product differentiation and the demand for skilled labor. Utilizing detailed firm-level data in Korea, this research scrutinizes whether the relationship among the organizational factors in Korean firms is different from that of other technologically advanced countries. The results show that ICT demand is complementary to investment in human capital and product differentiation, but not to autonomous organizations. ICT is also found to contribute to productivity and profitability in addition to its effects on these relationships. The results do not show any synergic effect with other factors, however. Investment in ICT should be considered with other organizational factors with attention paid to synergistic effects. The implications could help practitioners as well as academicians in investing in ICT and in studying ICT investment respectively.
Similar content being viewed by others
Notes
This is also true when we use ICT-related training time as dependent variable
References
Acemoglu, D. (1998). Why do new technologies complement skills? Directed technical change and wage inequality. Quarterly Journal of Economics, 113(4), 1055–1089.
Acemoglu, D. (2002). Technical change, inequality, and the labor market. Journal of Economic Literature, 40(1), 7–72.
Acemoglu, D. (2003). Patterns of skill premia. Review of Economic Studies, 70(243), 199–230.
Acemoglu, D., Aghion, P., Lelarge, C., Reenen, J. V., & Zilibotti, F. (2006). Technology, information and the decentralization of the firm. NBER Working Papers, No. 12206.
Aghion, P., Caroli, E., & Garcia-Penalosa, C. (1999). Inequality and economic growth: the perspectives of the new growth theories. Journal of Economic Literature, 37(4), 1615–1660.
Aoki, M. (1990). Toward an economic model of the Japanese firm. Journal of Economic Literature, 28(1), 1–27.
Aoki, M. (2000). Information, corporate governance, and institutional diversity. New York: Oxford University Press.
Aoki, M. (2001). Toward a comparative institutional analysis. Cambridge: MIT Press.
Applebaum, E., & Batt, R. (1994). The new American workplace: Transforming work systems in the United States. London: ILR Press.
Arvanitis, S., & Loukis, E. N. (2009). Information and communication technologies, human, capital, workplace organization and labour productivity: a comparative study based on firm-level data for Greece and Switzerland. Information Economics and Policy, 21, 43–61.
Autor, D. H., Katz, L. F., & Krueger, A. B. (1998). Computing inequality: have computers changed the labor market? Quarterly Journal of Economics, 113(4), 1169–1213.
Bank_of_Korea. (2000, October). Impact of ICT on productivity. Monthly Bulletin.
Barro, R. J. (1999). Human capital and growth in cross-country regressions. Swedish Economic Policy Review, 6, 237–277.
Berman, E., Bound, J., & Griliches, Z. (1994). Changes in the demand for skilled labor within U.S. manufacturing industries. Quarterly Journal of Economics, 109(2), 367–398.
Berman, E., Bound, J., & Machin, S. (1998). Implications of skill-based technological change: international evidence. Quarterly Journal of Economics, 113(4), 1245–1279.
Black, S. E., & Lynch, L. M. (2005). Measuring organizational capital in the new economy, NBER Chapters, in: Measuring Capital in the New Economy, (pp. 205–236). National Bureau of Economic Research, Inc.
Borghans, L., & ter Weel, B. (2006). The division of labour, worker organization, and technological change. The Economic Journal, 116, F45–F72.
Bound, J., & Johnson, G. (1992). Changes in the structure of wages in the 1980s: an evaluation of alternative explanations. The American Economic Review, 82(3), 371–392.
Bresnahan, T. F. (1997). Computerization and wage dispersion: an analytical reinterpretation. The Economic Journal, 109(456), F390–F415.
Bresnahan, T. F., & Greenstein, S. (1997). Technical progress and co-invention in computing and in the uses of computers (pp. 1–83). Micro: Brookings Papers on Economic Activity.
Bresnahan, T. F., Brynjolfsson, E. T., & Hitt, L. M. (2002). Information technology, workplace organization and demand for skilled labor: firm-level evidence. Quarterly Journal of Economics, 117(1), 339–376.
Brynjolfsson, E. (1993). The productivity paradox of information technology: review and assessment. Communications of the ACM, 36(12), 67–77.
Brynjolfsson, E., & Hitt, L. M. (2000). Beyond computation: information technology, organizational transformation and business performance. The Journal of Economic Perspectives, 14(4), 23–48.
Brynjolfsson, E., Hitt, L. M., & Yang, S. (2002). Intangible assets: computers and organizational capital. Brookings Papers on Economic Activity, Micro, 1, 37–199.
Bygstad, B., & Aanby, H.-P. (2009). ICT infrastructure for innovation: a case study of the enterprise service bus approach. Information Systems Frontiers.
Caroli, E., & Reenen, J. V. (2001). Skill biased organizational change? Evidence from a panel of British and French establishments. Quarterly Journal of Economics, 116(4), 1449–1492.
Dos Santos, B. L. (2003). Information technology investments: characteristics, choices, market risk and value. Information Systems Frontiers, 5(3), 289–301.
Greenan, N., & Guellec, D. (1994). Coordination within the firm and endogenous growth. Industrial and Corporate Change, 3(1), 173–195.
Hur, J.-J., Seo, H.-J., & Lee, Y. S. (2002). ICT Investment and the demand for skilled workers. Kyong Je Hak Yon Gu, 50(4), 267–292.
Hur, J.-J., Seo, H.-J., Cheon, B.-Y., & Lee, Y. S. (2003, July). ICT and Wage Inequality. Paper presented at the KLI-KAEA Seminar on Labor in Knowledge-based Economy, Seoul, Korea.
Ichniowski, C., Kochan, T. A., Levine, D. I., Olson, C., & Strauss, G. (2000). What works at work: Overview and assessment. In C. Ichniowski, D. I. Levine, C. Olson, & G. Strauss (Eds.), The American workplace. Skills compensation and employee involvement (pp. 1–37). Cambridge: Cambridge University Press.
Kleist, V. F. (2003). An approach to evaluating e-business information systems projects. Information Systems Frontiers, 5(3), 249–263.
Kohli, R., Sherer, S. A., & Baron, A. (2003). IT investment payoff in e-business environment: research issues. Information Systems Frontiers, 5(3), 239–247.
Leem, C. S., Yoon, C. Y., & Park, S. K. (2004). A process-centered IT ROI analysis with a case study. Information Systems Frontiers, 6(4), 369–383.
Lindbeck, A., & Snower, D. J. (2000). Multi-task learning and the reorganization of work: from tayloristic to holistic organization. Journal of Labor Economics, 18, 353–376.
Lindbeck, A., & Snower, D. J. (2003). The firm as a pool of factor complementarities. IZA Discussion Paper, No. 882.
Middendorf, T. (2006). Human capital and economic growth in OECD countries. Jahrbucher fur Nationalokonomie und Statistik, 226(6), 670–686.
Milgrom, P., & Roberts, J. (1990a). The economics of modern manufacturing: technology, strategy and organization. The American Economic Review, 80(3), 511–528.
Milgrom, P., & Roberts, J. (1990b). Rationalizability, learning and equilibrium in games with strategies complementarities. Econometrica, 58(6), 1255–1277.
Milgrom, P., & Roberts, J. (1992). Economics, organization and management. New Jersey: Prentice Hall.
Milgrom, P., & Roberts, J. (1995). Complementarities and fit strategy, structure and organizational change in manufacturing. Journal of Accounting and Economics, 19, 179–208.
Milgrom, P., Qian, Y., & Roberts, J. (1991). Complementarities, momentum, and the evolution of modern manufacturing. The American Economic Review, 81(2), 511–528.
Mookherjee, D. (2006). Decentralization, hierarchies, and incentives: a mechanism design perspective. Journal of Economic Literature, 44, 367–390.
Murphy, M. (2002). Organizational change and firm performance. OECD.
Nelson, R. (1994). The co-evolution of technology, industrial structure and supporting institutions. Industrial and Corporate Change, 3(1), 47–63.
Nevo, S., Wade, M., & Cook, W. D. (2008). An empirical study of IT as a factor of production: the case of Net-enabled IT assets. Information Systems Frontiers, 10.
OECD. (2004). The economic impact of ICT- measurement, evidence and implications. Retrieved. from.
Scheepers, H., & Scheepers, R. (2008). A process-focused decision framework for analyzing the business value potential of IT investments. Information Systems Frontiers, 10, 321–330.
Sherer, S. A., Kohli, R., & Baron, A. (2003). Complementary investment in change management and IT investment payoff. Information Systems Frontiers, 5(3), 321–333.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Seo, HJ., Lee, Y.S., Hur, JJ. et al. The impact of information and communication technology on skilled labor and organization types. Inf Syst Front 14, 445–455 (2012). https://doi.org/10.1007/s10796-010-9276-7
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10796-010-9276-7