Corporate obsession with stock-price performance the “financialization” of American industry has weakened the nation’s competitiveness and contributed to the economic crisis, according to William Lazonick, Economics professor.
The International Joseph Schumpeter Society has awarded Lazonick the 2010 Shumpeter Prize for his book on the subject, “Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States,” published by the Upjohn Institute for Employment Research. One of just two recipients of the biennial award, Lazonick will share in the 10,000 (about $12,000) prize.
In the book, Lazonick analyzes the transformation of the characteristic business organization of the U.S. high-tech industry. He shows how a business model that was an engine of innovation in the 1980s and 1990s has resulted in inequitable income distribution and unstable employment in the 2000s. He argues that the engine of innovation has stalled.
Lazonick, director of the UMass Lowell Center for Industrial Competitiveness, currently is conducting a research project, funded by the Ford Foundation, on financial institutions’ impact on innovation and development. The study includes the United States, Japan and China. Lazonick is also affiliated with the University of Bordeaux in France, at which he is engaged in a research project on finance, innovation and growth, funded primarily by the European Commission.
The Schumpeter Prize is awarded every two years in recognition of a recent scholarly contribution in economics, particularly the study of innovation and economic development. This year, the theme of the Prize was “Innovation, Organization, Sustainability and Crises.”