Dr. Andrew P McAfee

Principal Research Scientist
Associate Director, Center for Digital Business (CDB)

Primary DLC

MIT Sloan School of Management

MIT Room: E94-1519

Assistant

Esther Simmons
esimmons2@gmail.com

Areas of Interest and Expertise

Enterprise 2.0 (Business Use of Emergent Social Software Platforms or ESSPs)
Competitive Impact of Information Technology
Cloud Computing
Semantic Web
Technology Product Usability

Research Summary

Andrew McAfee's work currently falls into a few areas:

Enterprise 2.0 -- McAfee coined this phrase in 2006 to describe the business use of emergent social software platforms (ESSPs) -- novel technologies that support collaborative work without pre-defining its structure. Structure in this context means workflows, roles and responsibilities, interdependencies, and decision rights. ESSPs like wikis, blogs, social bookmarking and social networking software, Twitter, and prediction markets first became popular on the Internet and came to be labeled “Web 2.0.”

Enterprise 2.0 refers to the use of these same tools by organizations in pursuit of their goals. Organizations have a long history of using technology to try to facilitate collaboration, but a generally poor track record with these tools. McAfee hypothesize that this is because the technologies they deployed, such as groupware and knowledge management systems, imposed too much structure; they pre-defined how people were going to work together.

ESSPs, in contrast, do not pre-define how collaboration will happen. Instead, they let people begin working together as equals and accept all types of contribution. This sounds like a recipe for chaos, but it is not. A fundamental and powerful property of all ESSPs is that they allow structure to emerge over time based on people’s interactions, even though they’re not pre-defined.

McAfee's work on Enterprise 2.0, which has consisted of field research and case studies, indicates that the new technologies of collaboration can solve longstanding and vexing challenges around knowledge capture and sharing, locating expertise, opening up innovation processes, and harnessing the ‘wisdom of crowds.’

McAfee book on Enterprise 2.0 will be published in the fall of 2009 by Harvard Business Publishing. I’ll also have an article on the topic in the November issue of Harvard Business Review. Two previous articles on Enterprise 2.0 have appeared in Sloan Management Review. I also blog frequently about this subject.

Competitive Impact of Information Technology -- It’s pretty clear that IT in general improves a company’s productivity, but what are its other effects on the world of business? In particular, how does it affect competition? Does technology allow some companies to get ahead and stay ahead of their rivals in an industry, or does it benefit all competitors equally?

McAfee's colleagues Erik Brynjolfsson, Feng Zhu, Michael Sorell have documented two very interesting patterns. First, competition in U.S. industries accelerated substantially beginning in the middle of the 1990s, just as important new technologies like the Web and commercial enterprise software became available to corporations. High performing companies pulled farther away from low performers in measures like profit margin and ROA, turbulence increased, and concentration began to increase after many years of decline.

The second interesting pattern is that all of these changes have been more pronounced in industries that spend more on IT. In both the manufacturing and service sector the trend is clear: greater technology spending is associated with more intense competition at the industry level.

While the data cannot ‘prove’ that IT is responsible for the changes in competition we observe, McAfee believes that the patterns we observe are not coincidences, and that IT is in fact increasing the pace of business competition. It is doing so in two broad ways. First, tools for analytics, open innovation, crowdsourcing, and so on are increasing the number of good business ideas. Second, communication and workflow technologies are impact or leverage of many of these ideas; thanks to IT, innovations that were formerly local can now be spread globally throughout a company.

McAfee's research in this area has been a mix of field work and analysis of publicly available data. He and his collaborators have published articles from this work in the Wall Street Journal and Harvard Business Review, and have a working paper describing our results available for download from SSRN.

What Makes a Company Good at IT?

McAfee and his colleagues are in the early stages of a research effort to understand what makes some companies better able to exploit IT than their rivals. They are conducting a survey on this topic, which we will combine with publicly available data and case studies.

Recent Work

  • Video
    March 24, 2021Conference Video Duration: 24:22

    2021-Vienna-Humans-versus-Machines-Panel-1

    Claudia Unterweger
    Harald Mahrer
    President, Austrian Federal Economic Chamber
    Andrew McAfee
    Principal Research Scientist
    MIT Sloan School of Management
    Dorothee Ritz
    General Manager, Microsoft Austria
    Hubert Rhomberg
    Managing Director of Rhomberg Holding GmbH
    November 6, 2019Conference Video Duration: 38:3

    Andrew McAfee - 2019 Citi-NY

    More From Less: How We Innovated Our Way Into a Healthier Relationship with Our Planet

    Want some good news about the environment? In America, we have finally learned to grow our economy while taking less from the Earth year after year: less water, timber, and metal; fewer minerals and resources; even less energy. This talk is a show and tell about this profound change. Andy McAfee will show the evidence that we've started getting more from less and tell how it happened. The unlikely heroes of the tale are the cost pressures that come from intense competition and powerful digital tools that reduce the need for resources. In short, prices and processors are now letting us tread more lightly on the Earth. The story is full of surprises and also insights. In particular, it gives us a playbook for dealing with the major challenges still ahead of us: global warming, pollution, and species loss.

    2019 MIT Citi Conference in NYC
    October 31, 2019Conference Video Duration: 38:3

    MIT-Citi 2019 - Andrew McAfee

    More From Less: How We Innovated Our Way Into a Healthier Relationship with Our Planet

    Want some good news about the environment? In America, we have finally learned to grow our economy while taking less from the Earth year after year: less water, timber, and metal; fewer minerals and resources; even less energy. This talk is a show and tell about this profound change. Andy McAfee will show the evidence that we've started getting more from less and tell how it happened. The unlikely heroes of the tale are the cost pressures that come from intense competition and powerful digital tools that reduce the need for resources. In short, prices and processors are now letting us tread more lightly on the Earth. The story is full of surprises and also insights. In particular, it gives us a playbook for dealing with the major challenges still ahead of us: global warming, pollution, and species loss.

     

    October 4, 2017Conference Video Duration: 38:41

    Andrew McAfee - 2017 Management

    The Big Shift: Management and Strategy in the Second Machine Age

    How does the work of running a successful company change when:
    * Algorithms outperform human experts in more and more domains?
    * Computers can be creative and personable?
    * Asset-light platforms spread across industries?
    * Even extremely sophisticated products become commoditized?
    * Many organizations can be bested at their core competence by an online crowd?
    * Blockchains, smart contracts, and other technologies of extreme decentralization promise the demise of the corporation?
    Drawing on insights from Machine | Platform | Crowd, his most recent book with Erik Brynjolfsson, Dr. McAfee will address these and other questions. He'll provide a vision, sure to spark lively discussion, of what successful companies will look like in as we move deeper into a time of brilliant technologies.

    2017 MIT Innovations in Management Conference