The Innovative Enterprise

Professor Bill Lazonick (Professor in the Department of Regional Economic and Social Development at University of Massachusetts Lowell and Director of the UMass Lowell Center for Industrial Competitiveness)

CA117, J.E. Cairnes School of Business and Economics, NUI Galway 18:00 :: 4th March 2009

William Lazonick is Professor in the Department of Regional Economic and Social Development at University of Massachusetts Lowell and Director of the UMass Lowell Center for Industrial Competitiveness. He is also affiliated with the Institute of International Business of Stockholm School of Economics and the CNRS Groupe de Recherche en Economie Theorique et Appliquee of Universite Montesquieu Bordeaux IV. Previously, he was Assistant and Associate Professor of Economics at Harvard University (1975-1984) and Professor of Economics at Barnard College of Columbia University (1985-1993), and Distinguished Research Professor, INSEAD (1996-2007). He has also been on the faculties of the University of Tokyo (1996-1997), Harvard Business School (1984-1986), and University of Toronto (1982-1983), and was a visiting member of the Institute for Advanced Study in Princeton (1989-1990). Numerous governmental agencies and private foundations in Europe, the United States, and Japan have funded his research.
He is the author or editor of twelve books, including Competitive Advantage of the Shop Floor (Harvard University Press, 1990) and Business Organization and the Myth of the Market Economy (Cambridge University Press, 1991), and some 100 academic articles. He is currently completing a book, Sustainable Prosperity in the New Economy?: Business Organization and High-tech Employment in the United States. He is regularly invited to speak at academic conferences, research institutes, universities, government agencies, and corporate associations throughout the world.

Abstract of presentation to be delivered at CISC
National University of Ireland, Galway, March 5, 2009

Innovation is the process of transforming inputs into outputs to generate higher quality, lower cost products than were previously available at prevailing factor prices. As such, innovation drives the development of an economy. While governments and other non-business organizations make investments that enable innovation to occur, in a modern economy the generation of higher quality, lower cost goods and services depends on business investment. A theory of innovative enterprise is, therefore, essential to the analysis of the performance of the economy. Such a theory must seek to explain under what conditions the activities of business enterprises result in innovation and the impacts on economic growth, income distribution, and financial stability of the economy in which these enterprises operate. The first part of my presentation will lay out the elements of a theory of innovative enterprise.

How have the characteristics of innovative enterprises changed over time? To address this question, one requires a conceptual framework for analyzing how a business enterprise transforms productive resources into goods and services that customers want at prices they can afford. To make this productive transformation, the enterprise must engage in three generic activities: strategizing, financing, and organizing. The types of strategy, finance, and organization that support the innovation process change over time and can vary markedly across industrial activities and institutional environments at any point in time. The innovative enterprise must, therefore, be analyzed in comparative-historical perspective. This analysis seeks to provide empirical substance to the concepts of strategic control, financial commitment, and organizational integration which combined represent the social conditions of innovative enterprise. The second part of my presentation will present and illustrate a framework for analyzing the social conditions of innovative enterprise in the comparative-historical experiences of the advanced economies.

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