Eilert Sundt lecture 2005

Competing in Capabilities: Globalization and Industrial Development

Professor John Sutton,
London School of Economics, UK

Thursday 27. October,
14.15 - 16.00, Auditorium 1,
Eilert Sundts hus, Blindern
 

The concept of a firm's "capability", though widely explored in the business school literature, has as yet barely entered mainstream economics. Yet this concept promises to prove useful over a number of fronts, including in particular the area of Industrial Development. The lectures introduce a simple formulation of the "capability" concept, and employ it to ask a series of questions about the current globalization process, and its impact on developing countries.

The capability concept, at one level, simply involves a broadening of the standard productivity concept to a world of differential products in which the quality of a firm's products is a key determinant of its success. At a deeper level, however, it concerns the idea that productivity and quality in turn rest upon the set of interlocking elements of "know how" possessed by the individuals comprising the firm. Other implications relate to the recent heated debate which has developed in response to the appearance of various well-published rankings of countries' "competitiveness". The issue here is whether it is a firm's (or country's) absolute level, or its relative level of capability, that is pertinent to its success. But the most important series of questions relate to Industrial Development: how fast, and how effectively, are capabilities being transferred to firms in developing countries as part of the current "globalization" process? Can these latecomers become leaders in their respective global markets? If so, over what timescale? What are the policy measures that may help (or hinder) the process? And what are the implications of all this for the advanced industrial economics?

The lecture is public and open to all.

John Sutton is the Sir John Hicks Professor of Economics, and Convener (Head) of the Economics Department at the London School of Economics, where he directs the Economics of Industry Group at STICERD. A graduate of University College Dublin and Trinity College Dublin, he has been a Visiting Associate Professor at Tokyo University, a Marvin Bower Fellow at the Harvard Business School, and a Visiting Professor of Economics at Harvard University. He taught at the University of Sheffield before joining LSE in 1977.

He has written widely in the areas of microeconomic theory and Industrial Organisation. His books include Sunk Costs and Market Structure (MIT Press, 1981), Technology and Market Structure (MIT Press, 1998), and Marshall's Tendencies: What Can Economists Know? (MIT and Leuven University Press, 2000). He has been a consultant for the World Bank since 2000, and served on the Advisory Committee on Access to the Japanese Market (Tokyo) from 1995 to 2002. He is currently a member of the Group of Economic Advisors to the President of the European Union, and of the Enterprise Strategy Group (Ireland). He is a Fellow of the Econometrics Society, and the British Academy, and President of the Royal Economic Society.