The Macroeconomic Benefits of Intelligent Enterprise

Abstract

New information technologies, including e-commerce and the Internet, have brought fundamental changes to 21s t century businesses by making more and better information available quickly and inexpensively. Intelligent enterprises are those firms that make the most from new information technologies and Internet business solutions to increase revenue and productivity, hold down costs, and expand markets and opportunities. In this chapter, the macroeconomic benefits that intelligent enterprises can have on the U.S. economy are explored. We find that the U.S. economy has become less volatile, with demand volatility nearly matching sales volatility, particularly in the durable goods sector. Evidence also suggests that firms are utilizing new information technologies to lower inventory levels relative to sales, leading to higher productivity growth, lower prices, and more competitive markets.