MIT Sloan by xiaoyounan


									GIvInG TO MIT SlOAn

      MIT Sloan
                The New Initiative on the Digital Economy

                The digiTizaTion of The economy                     institutions for the digital economy is the
                is one of the most critical issues of our           grand challenge for our time, and for MIT in
                time. While digital technologies are rapidly        particular.
                transforming both business practices and
                                                                    The Initiative for the Digital Economy
                societies and are integral to the innovation-
                                                                    The Initiative for the Digital Economy (IDE) is
                driven economies of the future, they are also
                                                                    a major effort addressing the impact of digital
                the core driver of the great economic paradox
                                                                    technology on businesses, the economy,
                of our time. On one hand, productivity, wealth,
                                                                    and society. Drawing upon MIT Sloan’s
                and profits are each at record highs; on the
                                                                    strengths in technology and innovation, its
                other hand, the median worker in America
                                                                    internationally recognized faculty, and over a
                is poorer than in 1997, and fewer people
                                                                    decade of research and partnership with MIT
                have jobs. Rapid advances in technology
                                                                    Sloan’s Center for Digital Business, the new
                are creating unprecedented benefits and
                                                                    Initiative will analyze the broad sociological
                efficiencies, but there is no economic law that
                                                                    changes brought about by digital technology.
                says everyone, or even a majority of people,
                                                                    Many of the key issues are described in a
                will share in these gains. While technology
                                                                    recent book by Professor Erik Brynjolfsson
                is advancing rapidly, organizations and
                                                                    and Dr. Andrew McAfee, Race Against the
                skills advance slowly. What’s more, the gap
                                                                    Machine - How the Digital Revolution is
                between swiftly evolving technology and the
                                                                    Accelerating Innovation, Driving Productivity,
                slower pace of human development will grow
                                                                    and Irreversibly Transforming Employment
                quickly in the coming decades, as exponential
                                                                    and the Economy. In the book, they outline
                improvements in artificial intelligence,
                                                                    the relevant issues the new initiative will
                robotics, networks, analytics, and digitization
                                                                    address, as follows:
                affect more and more of the economy and
                society. Inventing effective organizations and

                for more informaTion
                 MIT Sloan Office of External Relations             On the Web at:
                 1-617-253-1557 |
                  “The substantive outcomes from this Initiative will light a path for our students and
                   faculty, and enable them to be at the forefront of the decision-making for technology,
                   business, and policy issues that could well determine our living standards, the viability
                   of manufacturing and services, and the overall health of our economy.”

                                     Erik Brynjolfsson, Schussel Family Professor of Management Science,
                                     Director of the MIT Center for Digital Business

Productivity, Employment, & Inequality – How                  MIT Sloan, with its tradition of combining rigor and
can we accelerate the transformation of institutions,         relevance, is uniquely qualified to lead intellectually
organizations, and human skills to keep up with the           in this area and, indeed, has a responsibility to do so.
quickening pace of digital innovation?                        Embracing the MIT mission, to bring knowledge to
                                                              bear on the world’s great problems, and the MIT Sloan
New Digital Business Models – What new business               mission, to develop principled, innovative leaders who
models are made possible by digitization and how can          improve the world and to generate ideas that advance
entrepreneurs more quickly implement them in ways             management practice, this Initiative has three main
that create widespread benefits?                              goals:

Big Data – How can we harness the remarkably fine-            1. To rigorously analyze the potential of digital
grained, real-time data now available to answer age-old       technologies to transform businesses, the economy,
questions and identify new opportunities?                     and society;

Education in the Digital Economy – Can education              2. To engage students and faculty in educational
be made more effective by taking a digital approach?          programs relevant to the digital revolution, keeping
                                                              MIT Sloan at the forefront of management education;
Technology & Innovation – What technologies and
innovations will drive our economies in the future?           3. To make grounded recommendations to industry
                                                              leaders and policymakers about the digital economy
Impact of Automation on the Economy and Society –
                                                              and job growth.
Can automation bring manufacturing jobs back to
America? What new jobs and skills will be needed as           Support
digitization becomes more pervasive?                          Partnership with MIT and MIT Sloan alumni and friends
                                                              is critical to the success of this Initiative. Expanded
The Economics of Information – How do the
                                                              funding will enable a new wave of faculty hiring,
economics of digital industries differ from traditional
                                                              curriculum development, fellowships, and will support
economics? What new business models are possible?
                                                              additional groundbreaking research by our faculty and
What are the implications for competition, innovation,
                                                              graduate students. In order for MIT and MIT Sloan to
incentives, and consumer welfare? What rules will
                                                              be successful in this area, there must be this organized
maximize welfare and what is the appropriate role
                                                              initiative to focus attention, resources, and energy. If we
of government and other institutions?
                                                              are successful, we can have a truly meaningful impact
                                                              on living standards, employment, and society.
                                                                                                                            InIT_DE _2012.12.07

                                                           organize themselves, and compete. At a higher level,
                                                           his work also focuses on how computerization affects
                                                           competition, society, the economy, and the workforce.
                                                           In addition to having numerous papers published,
                                                           Professor McAfee also writes a blog, which is widely
                                                           read, becoming at times one of the 10,000 most popular
                                                           in the world. He received his Doctorate from Harvard
                                                           Business School, and completed two Master of Science
                                                           and two Bachelor of Science degrees at MIT. He speaks
                                                           frequently to both academic and industry audiences,
Erik Brynjolfsson is the Director of the MIT Center        and has taught in executive education programs around
for Digital Business, the Schussel Family Professor of     the world.
Management at MIT Sloan, and Chairman of the MIT
Sloan Management Review. His research examines             Both Brynjolfsson and McAfee are digital optimists,
the effects of information technologies on business        noting that even as Americans listed "jobs and
strategy, productivity and performance, Internet           unemployment" as the country’s most pressing
commerce, pricing models, and intangible assets.           problem, corporate investments in software and
At MIT, he teaches courses on the Economics of             equipment have reached a historic peak as innovation
Information. Professor Brynjolfsson was among the first    is accelerating. The past decade has had the strongest
researchers to measure the productivity contributions      productivity growth since the 1960s.
of IT and the complementary role of organizational
                                                           With this Initiative, Brynjolfsson and McAfee will bring
capital and other intangibles. His research also
                                                           MIT Sloan thought leadership to address the workplace
provided the first quantification of the value of online
                                                           transformations and prospects for growth brought by
product variety and developed pricing and bundling
                                                           digital technology. Digital advancement, Brynjolfsson
models for information goods. Brynjolfsson’s research
                                                           says, is “creating trillions of dollars of wealth as it
has appeared in leading economics, management,
                                                           increases productivity, and that’s good news.” However,
and science journals, and has been recognized with
                                                           he continues, “our skills and our organizations need to
nine Best Paper awards and five patents. Professor
                                                           adapt faster to keep up with the new technologies –
Brynjolfsson holds Bachelors and Masters degrees from
                                                           and so must MIT Sloan.” With the generous support of
Harvard University in Applied Mathematics and Decision
                                                           individual, foundation, and corporate philanthropy, IDE
Sciences and a PhD from MIT in Managerial Economics.
                                                           will be able to focus its resources on these opportunities
He has also taught at Harvard and Stanford.
                                                           and pressures.
Andrew McAfee is the Associate Director and Principal
Research Scientist at the MIT Center for Digital
Business. His research investigates how information
technology (IT) changes the way companies perform,

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