European business technologists see higher spending on IT as helping narrow the productivity gap between the United States and Europe, survey finds.

Information Week , Carried this peice titled "IT: The Productivity Equalizer", it gives a view of how IT spending effects productivity.

Excerpts:
Few would disagree that IT plays a significant role in worker productivity. And many experts have credited growing worker productivity in the United States, in part, to smart deployment of IT by American companies. Indeed, much of the so-called jobless expansion of the U.S. economy this decade came from American companies exploiting their IT investments

According to a survey released Monday by the IT services firm Siemens Business Services, more than half -- 53% -- of surveyed European CIOs and chief technology officers say they need to increase spending on IT to catch up with American productivity levels. One in four contend their companies need to outspend Americans on IT to equal U.S. productivity levels.

Productivity in Europe is improving, albeit at a slower pace than in the U.S. Productivity in the EU-15 rose 1.3% in 2004, up from an anemic 0.9% in 2003. U.S. nonfarm productivity rose 4% last year, according to the U.S. Labor Department. On average, an analysis by the Conference Board shows, the productivity level of the EU-15 was at 92% of the U.S. level in 2004.

Among the CIOs and CEOs surveyed by Siemens, one-quarter said they would need to increase IT investments by 10% or more for their companies to match U.S. productivity levels. Another 39% said investments of between 5% and 10% would help narrow the productivity chasm.

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Prashanth Rai