Does It Matter?

C H A P T E R   4

Vanishing Advantage

Information Technology’s Changing Role in Business

IN THE MID-1990s, at the dawn of the great Internet gold rush, two academic studies appeared that examined the connection between information technology and competitive advantage. The first, published in MIS Quarterly in 1996, was by Erik Brynjolfsson and Lorin Hitt of the Massachusetts Institute of Technology.¹ Brynjolfsson and Hitt had earlier conducted a groundbreaking study of the impact of information technology investments on business productivity, which concluded that computer systems did, at least eventually, lead to gains in productivity.² They then decided to see what happened to those productivity gains: Were companies able to hold onto them, in ...