Trends Report

Tech Spending Can Improve Productivity In Some, But Not All, Industries

Introducing Forrester’s PROWFIT Model For Assessing Tech Spending’s Impact On Productivity

January 31st, 2022
Christopher Gilchrist, Principal Analyst
Christopher Gilchrist Principal Analyst
Andrew Bartels, null
Andrew Bartels
With contributors:
Matthew Guarini , Rachel Kwon , Michael Kearney , Kara Wilson , Jen Barton

Summary

Improving individual worker efficiency and overall productivity has prompted companies to invest in IT. We have shown before that the relationship between US productivity and tech spending is now weak. Yet, this does not mean we should stop pushing for efficiency but rather that tech execs should know the impact that tech investment can have on productivity. But what may be true for the US economy may not be true for specific industries. To help, Forrester has created a four-factor model — incorporating past productivity, gross output, workforce makeup, and tech spending — to assess whether tech investment in your industry can build productivity growth or will have little impact.

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