Let me introduce what I consider to be a major challenge of the 1990s for executives in both private and public organizations with a paradoxal observation on the 1970s and 80s. On the one hand the past decades may be characterized as an era of accelerating technological progress. In particular information technology (IT) — the basic, all-pervasive innovation of the third quarter of this century — has progressed quite spectacularly, offering unprecedented opportunities for raising productivity rates in both the private and public sector and, consequently, for also raising macro-economic growth rates.1 On the other hand, in contrast with the accelerating technological progress, growth rates in all Western countries have declined quite dramatically in this period. In the European Community the growth of GDP/employment declined from 4.4 per cent in the 1960s to 1.4 per cent in the 1980s (in the OECD from 4.1 per cent to 1.4 per cent). In the USA the decline was somewhat less pronounced, from 2.6 per cent in the 1960s to 0.7 per cent in the 1980s; Japan tumbled from 8.8 per cent to 2.9 per cent.2 The challenge of the 90s is to do better, that is, to capitalize on IT’s potential to increase the effectiveness of individual organizations and, consequently, to increase productivity growth on the macro level.
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