Investment in infrastructure can bring growth and social benefits. This column highlights the infrastructure opportunities open to depressed economies, stressing that the main obstacles are governance-related. To bring opportunities to life will require an overhaul of infrastructure governance – a root cause of infrastructure projects’ poor productivity.
Josh Lerner of Harvard Business School talks to Romesh Vaitilingam about his book "The Architecture of Innovation: The Economics of Creative Organizations". They discuss a variety of issues around the challenges of innovation, including corporate venturing, venture capital-based enterprises, patents and public investment in science. The interview was recorded in Washington, DC, at the annual meeting of the Toulouse Network on Information Technology in September 2012.
Zoning policies and land use regulations are widespread. This column presents recent research suggesting that regulations have in fact gone too far. Land use regulation is the outcome of competing property owner and land developer pressure groups, and it seems that local authorities respond well to lobbying, in addition to more traditional welfare and electoral considerations. The most over-restrictive regulation is in highly desirable places, New York and San Francisco being some of the worst offenders.
Governments around the world are fostering industrial ‘clusters’, hoping to create agglomeration economies. Using the political division of Germany in 1949, this column argues that heightened firm density can raise costs for incumbent firms in addition to the often-cited agglomeration benefits. This is important for policymakers contemplating efforts to promote their local areas by targeted cluster initiatives and bidding to attract large firms. Policy efforts that are neutral in orientation – such as physical infrastructure investments or improving the generation and dissemination of knowledge – may be more effective alternatives.
Surprisingly, manufacturing in some advanced economies is experiencing something of a renaissance. This column argues that the renaissance will unfold in new, unexpected ways. Manufacturing value added will continue to rise, but the impact on jobs will be muted – particularly for the unskilled. A range of innovations has opened a once-in-a-generation opportunity to build new platforms, but better skills and new strategies will be needed.
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Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford