There has been a lot of talk about technology companies facing a squeeze. But a more worrying international trend has emerged. US companies, once viewed as early adopters in corporate computing and the internet, are now falling behind global competitors in driving productivity and earnings growth because of technology shortfalls.

The reason behind this surprising shift is that US companies dedicate the majority of their fresh capital to fortifying older systems while companies in Europe and Asia invest in more up-to-date systems. Newer systems, during this second wave of web-based innovations, outperform older technology. These technologies have improved substantially in the past five years, making them easier to implement. As a result, more business processes will be online, driving higher levels of productivity.