UCL School of Management is delighted to welcome Professor Pradeep Chintagunta, Chicago, to host a research seminar discussing:
Is (Smart) Technology Really Making Us Dumber? Marketing Analytics Improves the Mental, Managerial and Financial Performance of Entrepreneurs.
The literature in economics on the interplay between technology and human capital suggests that the adoption and usage of technology can potentially have a positive effect on the human capital of users – for example, by rearranging connections in their brains. On the other hand, due to issues such as analysis paralysis, conﬁrmation bias, information overload and brain drain, other research has suggested a negative effect of technology. This paper sheds light on this tension by studying the impact of a particular Ed-Fintech solution (a marketing analytics technology) on the performance of emerging market ﬁrms and their entrepreneur-managers. We test the efﬁcacy of this technology using a randomized controlled ﬁeld experiment in which 550 Rwandan ﬁrms were assigned to one of three groups: Treatment (received a marketing analytics solution for nine months); Placebo (only received a smartphone and mobile internet access without any analytics); or Control (did not receive any intervention). We ﬁnd novel evidence of changes at an individual entrepreneur level. First, technology interaction is initially low for treatment entrepreneurs, but by the third month an organic feedback loop sets in that raises daily usage rates to 90-95% as these managers become more reliant on data and analytics in their businesses. Second, as per objective ability and psychological tests, the Ed-Fintech solution has a positive causal impact on the mental performance of entrepreneurs (i.e., their aptitude improves in areas related to reasoning, memory, logic and calculations). In addition, greater interaction with the marketing analytics solution also leads to changes at an overall business level. One, the managerial performance of ﬁrms improves through spillovers from the online technology to ofﬂine business practices in accounting and product management. Two, we ﬁnd a positive effect of Ed-Fintech (with marketing analytics) on the ﬁnancial performance of ﬁrms as the treatment group increases monthly sales by 36.4% and monthly proﬁts by 29.2% (on average). Taken together, these results offer new insights for stakeholders interested in enhancing productivity within businesses, increasing ﬁrm growth, or achieving greater ﬁnancial inclusion.