Erik Brynjolfsson on Big Data: A revolution in decision-making improves productivity

MIT Sloan Prof. Erik Brynjolfsson

There is a fundamental change underway in the way that companies make decisions. Instead of relying on a leader’s gut instincts, an increasing number of companies are embracing a new method that involves data-based analytics. This ‘Big Data’ revolution is occurring mainly because technology enables firms to gather extremely detailed information from and propagate knowledge to their consumers, suppliers, alliance partners, and competitors.

Companies that use this type of ‘data driven decision making’ actually show higher performance. Working with Lorin Hitt and Heekyung Kim, I analyzed 179 large publicly-traded firms and found that the ones that adopted this method are about 5% more productive and profitable than their competitors.  Furthermore, the study found a relationship between this method and other performance measures such as asset utilization, return on equity and market value. There is a lot of low-hanging fruit for companies that are able to use Big Data to their advantage. Read More »

Erik Brynjolfsson: New e-book outlines promise and peril of digital revolution

MIT Sloan Prof. Erik Brynjolfsson

From Economics of Information Blog

Andy McAfee and I have just released a short e-book, Race Against the Machine. In it, we try to reconcile two important facts. 1) Technology continues to progress rapidly. In fact, the past decade has seen the fastest productivity growth since the 1960s, but 2) median wages and employment have both stagnated, leaving millions of people worse off than before. This presents a paradox: if technology and productivity are improving so much why are millions being left behind?

In the book, we document remarkable advances in digital technologies in particular. Innovations like IBM’s Watson, Google’s self-driving car, Apple’s Siri are turning science fiction into reality. Machines are doing more and more tasks that once only humans could do.

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Big data drives security, risk discussion at MIT CIO affair

From Enterprise CIO Forum

I’ve  sat through the first two two sessions at the MIT Sloan CIO Symposium, expecting to hear all about the wonderful opportunities doing digital business.

Was I wrong!  The sessions, entitled 1) “Opportunities in the Digital Business World” and 2) “What every CIO should Know about the Future impact of Digital Business,”  focused on security, risk, privacy and how to manage infinite oceans of data were the dominant topic. We heard words like “headaches” and “hacker.”

Certainly, no one has corned the market for a playbook that explains how CIOs deal with vast amounts of data, all that threatens it and how to exploit it.

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Riding the Rising Information Wave–Are you swamped or swimming? MIT hosts experts

MIT Sloan Prof. Erik Brynjolfsson

This week, two conferences on related topics are scheduled for successive days at MIT—the annual MIT Sloan CIO Symposium today and the annual meeting of the MIT Center for Digital Business Thursday. Attendees at both events will include executives responsible for their organizations’ information services.

These leaders have very important jobs these days. Information management is no longer an obscure, technical department in companies. The success of firms can well hinge on how information managers do their jobs.

Every 1.2 years, the volume of business data worldwide doubles. In the course of the two days that the conferences are being held—actually any two days this year—businesses around the world will produce more data than all of the world’s businesses produced in all of history before 2003.

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