The Effect of Organizational Innovation and Information and Communications Technology on Firm Performance

A key lesson from the U.S. literature on the impact of ICT on productivity is that ICT can only be effective if appropriate organizational structures are in place. This article by Surendra Gera of Industry Canada and Wulong Gu of Statistics Canada provides Canadian evidence to support this view. Using the Workplace and Employee Survey, the authors find evidence that firms that implement organizational changes and introduce ICT have a higher incidence of productivity improvement, increased sales and profits, and product and process innovation than firms that do not follow this path. Their findings suggest that to be successful firms typically need to adopt ICT as part of a system or cluster of mutualy reinforcing organizational approaches.