Big Data Investment, Skills, and Firm Value
Management Science, Forthcoming
37 Pages Posted: 17 Jul 2013 Last revised: 7 Jan 2014
Date Written: January 4, 2014
Abstract
This paper considers how labor market factors have shaped early returns to investment in big data technologies. It tests the hypothesis that returns to early investments in Hadoop — a key big data infrastructure technology — have been concentrated in select labor markets due to the importance of aggregate corporate investment levels within a labor market for producing a supply of complementary technical skills during the early stages of technology diffusion. The analysis uses a new data source — the LinkedIn skills database — enabling direct measurement of firms’ investments into emerging technical skills such as Hadoop, Map/Reduce, and Apache Pig. Productivity estimates indicate that from 2006 to 2011, firms’ Hadoop investments were associated with 3% faster productivity growth, but only for firms a) with significant existing data assets and b) in labor networks characterized by significant aggregate Hadoop investment. Evidence for the importance of labor market concentration disappears for investments in mature data technologies, such as SQL-based databases, for which the skills are diffused and readily available through universities and other channels. These findings underscore the importance of geography, corporate investment, and channels for technical skill acquisition for explaining differences in productivity growth rates across labor markets during the spread of new IT innovations.
Keywords: big data, IT value, skills, IT spillovers, Hadoop, IT labor
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Productivity of Information Technology Investments: New Evidence from IT Labor Data
By Prasanna Tambe and Lorin M. Hitt
-
Measuring R&D Spillovers: On the Importance of Geographic and Technological Proximity
-
Strength in Numbers: How Does Data-Driven Decisionmaking Affect Firm Performance?
By Erik Brynjolfsson, Lorin M. Hitt, ...
-
Valuing IT-Related Intangible Assets
By Adam Saunders and Erik Brynjolfsson
-
Job Hopping, Information Technology Spillovers, and Productivity Growth
By Prasanna Tambe and Lorin M. Hitt
-
Human Capital Investments and Employee Performance: An Analysis of IT Services Industry
By Ravi Bapna, Nishtha Langer, ...
-
Digital Dark Matter and the Economic Contribution of Apache
By Shane M. Greenstein and Frank Nagle
-
Geographic and Technological R&D Spillovers within the Triad: Micro Evidence from US Patents
By Luigi Aldieri and Michele Cincera