Last week I suggested that technology might be useful in helping drive productivity forward.

This week, I am changing my view after further reflection.

Yes, over time firms have used technology to improve their business performance.  But there is some evidence to suggest the pattern is now somewhat changed.  It seems as though well-performing firms are using investment in technology to increase the performance advantage they already have.  In effect, they are realising some of the value they have created to fund the next stage of development – a virtuous circle of improvement.

Firms who cannot realise that funding stream have to work much harder or take greater risks to fund their development – and may spend some time playing ‘catchup’ before they can break into the circle.