Start Date
12-13-2015
Description
As digitization of human behaviors become more prevalent, we examine whether data-analysis capabilities can help with process- and innovation-oriented firm practices. Using firm level data on employee data analysis capabilities combined with a survey of organizational practices for 330 large firms, we find that while neither data skills nor process-related practices affect productivity directly, they have a substantial positive interaction. Specifically, firms with process-related practices receive a greater marginal benefit for the presence of or acquisition of data-related skills in their workforce. However, we do not find the same complementarities between data-related skills and innovation-oriented practices and at times the interaction can even be negative. These results are also unique to data-related skills and not IT skills generally. Overall these results highlight the potential tradeoffs of using data analytics at firm, similar to the tradeoffs between exploitation and exploration.
Recommended Citation
Wu, Lynn and Hitt, Lorin, "How Do Data Skills Affect Firm Productivity: Evidence from Process-driven vs. Innovation-driven Practices" (2015). ICIS 2015 Proceedings. 14.
https://aisel.aisnet.org/icis2015/proceedings/EconofIS/14
How Do Data Skills Affect Firm Productivity: Evidence from Process-driven vs. Innovation-driven Practices
As digitization of human behaviors become more prevalent, we examine whether data-analysis capabilities can help with process- and innovation-oriented firm practices. Using firm level data on employee data analysis capabilities combined with a survey of organizational practices for 330 large firms, we find that while neither data skills nor process-related practices affect productivity directly, they have a substantial positive interaction. Specifically, firms with process-related practices receive a greater marginal benefit for the presence of or acquisition of data-related skills in their workforce. However, we do not find the same complementarities between data-related skills and innovation-oriented practices and at times the interaction can even be negative. These results are also unique to data-related skills and not IT skills generally. Overall these results highlight the potential tradeoffs of using data analytics at firm, similar to the tradeoffs between exploitation and exploration.