The Rapid Adoption of Data-Driven Decision-Making

Abstract

We provide a systematic empirical study of the diffusion and adoption patterns of data-driven decision making (DDD) in the U.S. Using data collected by the Census Bureau for a large representative sample of manufacturing plants, we find that DDD rates nearly tripled (11%-30%) between 2005 and 2010. This rapid diffusion, along with results from a companion paper, are consistent with case-based evidence that DDD tends to be productivity-enhancing. Yet certain plants are significantly more likely to adopt than others. Key correlates of adoption are size, presence of potential complements such as information technology and educated workers, and firm learning.