Paper: Recession DOES make a difference in IT spending

Anna Pavlova: Adjustment Costs, Learning-by-Doing, and Technology Adoption under Uncertainty. New paper by one of the “young turks” in financial research at the MIT Sloan School about the effects of recession and organizational capability on technology adoption. Basically, the model shows that, under uncertainty, the rate of adoption of technology is critically dependent on capital expenditure and organizational capability.

This formally describes what many of us suspected already: companies with better technological capabilities will be better able to adopt new technologies even in down times. I wonder what this says about the wisdom of technology outsourcing strategies.