ABSTRACT
A manager of a management information systems department in a firm is concerned with measuring the success of the department. Since the inception of the use of information technology (IT) in business, one primary area of IT application has been in transaction processing to speed up clerical work and to cut labor costs. Researchers have observed another surprising aspect during the productivity slow-down in economy. Since the late 1980s, the productivity of the manufacturing sector has been rising while the productivity growth of the service sector has become negative. The growth accounting framework uses a similar formulation but differs in that it is defined in terms of rates of change for output and inputs. An industry-level study of productivity is useful, especially from the viewpoint of separating the manufacturing and service sectors, because the intensity and uses of IT investments and the productivity growth in the two sectors have been very similar.
