The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, October 24, 2023: David Soskice from London School of Economics and Political Science will present the paper “Innovation Drivers, Coalitions and Veto-players in the Company and the Metro-City: A Comparative Political Economy (and Dosian) Approach to Successes and Failures in Response to the Second Digital Revolution".
As increasingly understood, a 2nd Digital Revolution – complex software based – has occurred in the last decade or so based on extraordinary increases in computing power, internet speed and mobile access. This is associated with a whole range of associated technologies (web 2.0, 3.0, 4.0, multi-sided platforms, the IoT, wireless network and LEO satellites, 5g and 6g, quantum computing, blockchains, cloud and edge computing, Industrie 4.0, and now Gen AI; as well as related breakthroughs in the life-sciences, energy, etc). But two key paradoxes: Why then have we seen such limited improvements in the advanced economies in labor productivity growth and living standards? And why, when communications costs are virtually zero, have large areas of advanced countries declined economically and socially?
The basic argument is that we are in a huge software revolution where successful innovation and diffusion requires companies to be able to develop complex ‘systemic customised communicative software’. (Thus quite different to the off-the-shelf Office type software world of the late C20th.) This requires highly-skilled cooperative employees – with social, creative, specialised and software skills; also that there are innovation-drivers among managers and owners, prepared to change existing routines in the company; together with similarly-skilled innovation-driven relational managers; the absence of veto players; and long-run non risk-averse innovation-driven owners. Putting or holding together such companies it will be argued can seldom take place outside innovative metro-cities with appropriate social and skill networks, closely linked to research university systems.
Finally, we argue that these arrangements work differently across metro cities in different (successful) advanced economies, illustrated by the US, Sweden, Germany and Switzerland; and we explain too while they are much less successful (again in different ways) in the UK and Canada, France and Italy. A new richer varieties of capitalism is suggested!
The Seminar will be held in Aula 10: for online partecipation use this link.