As someone who has always been a big fan of Erik Brynjolfsson's careful work assessing how it is exactly that information and communications technologies raise productivity, I wasn't sure whether I'd really like this short book with Adam Saunders, Wired for Innovation. A quick glance suggested it simply summarized his previously published papers, and I've already read those. Would there be anything new?

The answer is that yes there is, a bit, but anyway it's extremely useful to see the arguments and analysis collected in one volume. This is also very concisely done – if anything, a little too concise at just 128 pages of text.

The underlying argument of Brynjolfsson's work with a number of co-authors is that to derive productivity benefits from investment in ICTs, firms need to make parallel substantial investments in reshaping the organization and ways of working. After all, different individual firms derive very different benefits from their spend in technology, depending on how they incoroprate it into the business. This volume sets out that evidence, and makes some additional points.

One is that the measurements and statistics available fail to capture much of the benefit of ICTs. GDP measures the value of internet access by how much people pay their ISPs. Nowhere do economic statistics capture the value people derive from looking at any material on the internet for free – YouTube videos, blogs, use of Wikipedia, whatever it may be. The payment of cash for a physical newspaper is counted but not the value of reading the (still) free online version. This book advocates using measures of consumer surplus – those that already exist, for example valuing the benefit of the variety of titles available at online bookstores, suggest the measures would be large. Time use diaries also make a start at better measurement, as time spent in activities is probably a better indicator of value than money spent, at least at present.

This debate on measurement is set in the context of the fact that GDP never measures the benefit of the increasing variety of goods and serices, new goods, or improving quality, even with hedonic pricing. Equally, the book argues, moentary values are unlikely ever to tell a complete story about the value of online activities because so much more of our spending and time now go on experience goods. Information is a pure experience good, which people can't value until they've consumed it, so it has a strong public good characteristic.

I also greatly enjoyed a section (p100ff) on previous examples of disruptive technologies which defied early expectations that they would destroy the capacity for honest businesses to make money. For example, book publishers strongly argued against the development of lending libraries; journal publishers opposed photocopiers. In each case, the business model had to evolve but the profits continued – journal publishers, for example, started to charge higher prices for those titles most likely to be widely photocopied. The price paid by libraries covered any possible loss of revenue from copying – and indeed, there was in reality next to no cannibalisation because individuals who read photocopies would never have subscribed to the whole journal, absent the copying technology.

Finally, I highly commend the box in Chapter 4 summing up the 7 steps organisations need to take to see the productivity fruits of investment in ICTs (based on a 2005 article by Brynjolfsson and Hitt). Some of them will seem like common sense but few organisations do them.

So, if you are not familiar with this micro productivity literature, and even if you are, this is a very valuable read. There are sample chapters on the MIT Press website  – after all, this is an experience good too.