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  3. American Economic Review
  4. May 2016
  5. The Rapid Adoption of Data-Driven Decision-Making

The Rapid Adoption of Data-Driven Decision-Making

  • Erik Brynjolfsson
  • Kristina McElheran
American Economic Review
vol. 106, no. 5, May 2016
(pp. 133-39)
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Abstract

We provide a systematic empirical study of the diffusion and adoption patterns of data-driven decision making (DDD) in the U.S. Using data collected by the Census Bureau for a large representative sample of manufacturing plants, we find that DDD rates nearly tripled (11%-30%) between 2005 and 2010. This rapid diffusion, along with results from a companion paper, are consistent with case-based evidence that DDD tends to be productivity-enhancing. Yet certain plants are significantly more likely to adopt than others. Key correlates of adoption are size, presence of potential complements such as information technology and educated workers, and firm learning.

Citation

Brynjolfsson, Erik, and Kristina McElheran. 2016. "The Rapid Adoption of Data-Driven Decision-Making." American Economic Review, 106 (5): 133-39. DOI: 10.1257/aer.p20161016

Additional Materials

JEL Classification

  • D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • L60 Industry Studies: Manufacturing: General
  • M10 Business Administration: General
  • M50 Personnel Economics: General