Because investment in information technology is now done primarily for improving the bottom line. That is the ONLY reason why U.S. CEOs will invest – not for speed, or for being up to date - but for profit. And as the February 9^th issue of Business Week points out: “…companies have learned that information technology isn’t a silver bullet. New information technology must be combined with organizational change to achieve real productivity gains.”

    Systems that put every company in the same data collection and operating mode do not create any competitive advantage for any one company. Systems that are flexible, secure and adapted for each company’s special needs, will be the future of information technology. And as the needs change, so must the information technology system.

    And that brings me to the issue of productivity being the only way to create wealth.

    In a recent study that will be published in June, we were able to pinpoint the main reason for the “jobless recovery” in the U.S.

    It followed from the dramatic cost cutting of U.S. companies during, and following, the 8-month recession of 2001. One company’s cost is another company’s revenue. The cost cutting companies had, on the average, lower productivity improvement than the U.S. business sector, and lower profits and growth as well. From 1998 through 2002, employment in those companies decreased by about 2%, while the U.S. labor force expanded by 1.2%.

    The most productive companies, however, had higher profits, higher growth, and they increased employment by 34% over the same 5-year period!

    The myth that productivity destroys jobs is effectively demolished by this study. It is lack of productivity that destroys jobs.

    What characterized the most productive companies?

    They shared one key common characteristic: They strove for, and achieved, earned monopoly advantages! They offered something no other company could offer.

    And that is what should determine where U.S. investment should go. The U.S. must invest in performance, in innovation, in high value-added activities, where the return beats low cost labor everywhere.

    If certain tasks can be performed more cheaply and more effectively elsewhere, they should be performed elsewhere! A company should invest in what it can do better than anyone else. And, THAT is what would save, and CREATE, high paying American jobs.

    When new technology was embraced by farming, no one bemoaned the loss of millions of backbreaking jobs that allowed freed people to build an industrial superpower that created unimaginable prosperity for the U.S.

    The U.S. is poised for another turn of the upward spiral. This time, the whole world is helping - China, India, Mexico, and other nations are taking over tasks that will lift them as surely as they will lift the U.S. It is the greatest anti-poverty program the world has ever seen. The driver of this transformation is productivity – finally coming into its own, and finally addressing the problems most challenging in every economy: inflation, unemployment, and growth.