Prof. Bill Lazonick.

We can define economic development as sustained productivity growth that is equitably shared among the population on a stable basis. Underpinning economic development are innovation processes that, by generating higher quality products at lower unit costs, can raise standards of living. In general, investment in these innovation processes is carried out by business enterprises that must compete for markets to survive. The foundation of a theory of economic development is, therefore, a theory of innovative enterprise. In this lecture, I will lay out the key concepts – strategic control, organizational integration, and financial commitment – in the theory of innovative enterprise to provide a framework for analyzing the social conditions that enable innovation to occur. Then I will discuss the implications of the theory of innovative enterprise for understanding productivity growth, income distribution, and employment stability in a national economy as a whole. Finally, drawing on the history of economic development over the past century, I will highlight changes over time and across nations in the characteristics of innovative enterprise and, relatedly, national paths to equitable and stable economic growth.

William Lazonick is professor of economics and director of the Center for

Industrial Competitiveness at University of Massachusetts Lowell. He is co-founder and president of The Academic-Industry Research Network. He is the author or editor of 13 books, including Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States (2009) winner of the 2010 International Joseph A. Schumpeter Prize. His article, "Innovative Business Models and Varieties of Capitalism," received the Henrietta Larson Award from Harvard Business School for best article in Business History Review in 2010. His Harvard Business Review article “Profits Without Prosperity: Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off” received the HBR McKinsey Award for outstanding article in Harvard Business Review in 2014. Lazonick is currently completing a book, The Theory of Innovative Enterprise, to be published by Oxford University Press.

The Public debate will be chaired by Antonio Andreoni and animated by IDP members and fellows including Mushtaq Khan, Chris Cramer, Ben Fine, Machiko Nissanke, Carlos Oya, Massoud Karshenas, Christine Oughton, Robert Wade (LSE), Akbar Noman (Columbia University, IPD) Mike Best (Mass Lowell), Moazam Mahmood (International Labour Organisation) and representatives from BNDES, London Office

Speaker(s):

Bill Lazonick (University of Massachusetts Lowell), Antonio Andreoni (SOAS)

Event Date:

30 June 2015

Released by:

SOAS Economics Podcast