When I was first poking my nose into economics as a teenager I came across the famous definition that it is the study of allocating finite resources. Since then I’ve worked in government, at a regulator and for multiple companies, and I can stand very firmly behind the opinion that academic economics has a very poor understanding of how resources are allocated within a commercial organisation, and how decisions are made.
However, there is a field that has been developing quietly over the past twenty or so years that seeks to understand firms as a collection of resources and how these resources can be optimally combined to improve firm performance.
My first encounter with it was while studying the relationship between investment in ICT and productivity. A number of studies looked at complementary business changes/characteristics alongside the introduction of things like email, e.g. email had more of an impact on organisations that had a flatter structure. Lowering the costs to communication makes more of an impact when you can be more effective by communicating with more people.
Now everyone wants to be data driven, but being more data driven is so much more complex than dashboards and data literacy classes. I am looking at how organisations can improve their decision-making by not only investing in fancy tech and data infrastructure, but changing how they make decisions and investing in organisational learning. It is not a simple story, and every organisation has different challenges, but there are common themes that can be used to help drive improvement.
Maybe there will be studies we can publish in the future, and someone can revisit this Economist article.