Digital transformation and IT investment

Business investment has all but disappeared in the last five years. Therefore, it is understandable that the appeal for more investment in the drive to digital transformation will unlock innovation and a new route to productivity — namely, greater organisational efficiency and better use of existing resources and assets. However, it is not that simple, as a review of the data illustrates.

In order to pivot the economy to a new business cycle, a renewed stage of capital IT investment is seen as a prerequisite. The general output of such investment could lead to better customer experiences and organisational effectiveness, as these two items are typically claimed as the objectives of such a strategy. This putative result is unqualified — it is an assumption based on data and experiences which date back 20 years, and is not related to the current state of technological investment and stock.

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