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2001. Venture Capital and Clean Technology: Opportunities and Difficulties

Author:
Martin Kenney and Andrew Hargadon
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
In the last half - century, venture capitalists have financed many of the most important new U.S. technology-based firms and industries. Most recently, venture capital has been touted as a key investor and driver of a new clean technology future. This paper examines the characteristics of successful venture capital investing and the structure and dynamics of clean technology markets to predict whether venture capital is the best model for financing a clean technology transition. We identify the following three key characteristics of technologies and markets in which venture capital can be successfully invested. First, the firm's markets must be large and rapidly growing. Second, the firm's solutions must be scalable, with the particular characteristic that a firm's growth in revenue (and valuation) significantly outpaces the capital cost of achieving that growth. Third, there must be the potential for large and rapid payoff, as either a public stock offering or acquisition by another firm. In the U.S. clean technology market, with the exception of energy being a large market, in nearly all cases these characteristics do not hold. For these reasons, a venture capital model for funding clean technology innovation is unlikely to be successful and the imposition of venture capital goals on clean technology firms may even be harmful to their survival. The current Obama Administration's strategy of providing enormous loan guarantees to a few chosen venture capital ‐ financed firms is misguided because it is likely to truncate the chaotic business model search that characterizes the formation of new industries.
Topic:
Climate Change, Economics, Energy Policy, International Trade and Finance, and Markets

2002. Who Captures Value in Global Supply Chains?

Author:
Jyrki Ali-Yrkkö, Petri Rouvinen, Timo Seppälä, and Pekka Ylä-Anttila
Publication Date:
02-2011
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
Available statistics tell us little about the economic consequences of increasing global dispersion of production processes. In order to shed light on the issue, we perform grass roots detective work to uncover the geography of value added in the case of a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. In the case when the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even in the case when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it had rather little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the physical goods flows. It is rather services and other intangible aspects of the supply chain that dominate. While final assembly – commanding 2% of the value added in our case – has increasingly moved offshore, the developed countries continue to capture most of the value added generated by global supply chains.
Topic:
Economics, Globalization, Industrial Policy, International Trade and Finance, and Markets
Political Geography:
China, Europe, and Finland

2003. Barcode Empires: Politics, Digital Technology, and Comparative Retail Firm Strategies

Author:
Bartholomew C. Watson
Publication Date:
02-2011
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
Like other service sectors, information technology has dramatically altered the growth and character of the retail trade sector in the affluent economies. Nevertheless, significant variation exists in the typical strategies of retail firms in different countries. This article explores this variation and proposes both an ideal type and an explanation. It argues that the problems of markets and hierarchies in retailing were set in motion by a series of political fights starting in the 1960s and 1970s. This demonstrates that once again that technical outcomes are not determined by the technology itself, but by social and political rules. Future technology platforms, such as e-commerce of mobile commerce, should be expected to follow similar political logics. As retailing firms spread around the globe, this has important implications for national competition policy.
Topic:
Economics, International Trade and Finance, Science and Technology, and Communications

2004. Decision-Making under Uncertainty: Using Case Studies for Teaching Strategy in Complex Environments

Author:
Dr. Volker Franke
Publication Date:
01-2011
Content Type:
Journal Article
Journal:
Journal of Military and Strategic Studies
Institution:
Centre for Military, Security and Strategic Studies
Abstract:
Today's strategic environment is increasingly characterized by threats that "are both diffuse and uncertain, where conflict is inherently unpredictable, and where our capability to defend and promote our national interests may be restricted by political, diplomatic, informational and economic constraints. In short, it is an environment marked by volatility, uncertainty, complexity, and ambiguity (VUCA)." Decision-makers, both civilian and military, who want to operate effectively in this environment must consider a wide range of social, political and cultural factors and demonstrate cognitive flexibility, adaptability and the ability to make decisions "on the fly."
Topic:
Climate Change and Economics

2005. Allies Yet Rivals: International Politics in 18th Century Europe.

Author:
Gavin Weins
Publication Date:
01-2011
Content Type:
Journal Article
Journal:
Journal of Military and Strategic Studies
Institution:
Centre for Military, Security and Strategic Studies
Abstract:
Alliances have, and likely always will have, a common feature of international diplomacy for a number of reasons. First, the primary objective of any government is defence and states will attempt to heighten security through international agreements. Second, military and economic power is unevenly distributed among states and weaker powers will unavoidably gravitate toward stronger powers in search of increased protection and commercial benefits. Third, an alliance can occasionally be the most effective means of tying the hands of a rival. Despite the variety of objectives that encourage the formation of alliances and the numerous forms that international agreements can assume, Marco Cesa argues that international relations theory has consistently recognized the existence of only one type of alliance: those agreements between states that are designed to confront an aggressive and dangerous “common enemy.” Above all, this viewpoint has one-dimensionally characterized alliances as unions of separate forces, policy-coordination organizations, or as takers of joint action against some third party. The “internal” dimensions of alliances, or the complex negotiations between allies, have consequently been overshadowed by the “external” dimensions, or the measures implemented by the allies to confront the threatening power. Nevertheless, states are almost always involved in ambiguous and clandestine diplomatic manoeuvres against not only enemies, but allies as well. Through an examination of this “darker side” of alliances, Cesa attempts to highlight the shortcomings of traditional international relations theory and, at the same time, offer an alternative framework for the examination of inter-ally relations.
Topic:
Economics and Government
Political Geography:
Europe

2006. Globalization and Unemployment

Author:
Michael Spence
Publication Date:
07-2011
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
Jobs growth was slow in May, renewing pessimism about the U.S. economy. Spence, a Nobel Prize-winning economist writes that economic growth and employment in the United States have started to diverge, increasing income inequality and reducing jobs for less-educated workers.
Topic:
Economics, Globalization, Poverty, and Labor Issues

2007. The New Digital Economy: How it will transform business

Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
International leaders face an era of unprecedented change. The recession and financial crisis that ended in 2009 caused a seismic shift that has reshaped the global business landscape. The world economy is now characterized by sluggish growth in the West, a shift in power to the East, and value-driven customers and rising risks everywhere. At the same time, the downturn has hastened the adoption of key technologies—mobility, cloud computing, business intelligence and social media—that are transforming businesses and sparking a new wave of wealth creation, particularly in the emerging world.
Topic:
Economics, International Trade and Finance, Markets, and Science and Technology

2008. Are the advanced economies facing a lost decade?

Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Oxford Economics
Abstract:
Recent weeks have seen a slew of weaker-than-expected data releases from the major economies, raising doubts about whether the expansion in the developed nations is sustainable. One reason for the apparent loss of momentum has been the moderation of growth in the emerging markets, as central banks have tightened monetary policy in response to rising inflation. The weakening trend in growth indicators can also be linked to temporary adverse factors, including supply chain disruptions form the Japanese earthquake and tsunami, as well as the sharp rise in oil prices earlier this year.
Topic:
Economics, Globalization, International Trade and Finance, and Financial Crisis
Political Geography:
Japan

2009. Balancing growth and stability in EU financial reform

Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Oxford Economics
Abstract:
The financial crisis has forced a reappraisal of the regulatory architecture, globally and in the EU and its member states. Around the world, policymakers are proposing significant changes to rules governing the financial sector, with the goal of making the financial system more resilient. Given the large and visible costs of financial instability for Europe, it is natural for European policymakers to make the avoidance of financial crises a high priority. But it is also important to recognise that regulation carries a range of costs that can dilute the economic benefits of a competitive and dynamic financial services sector. The academic literature has robustly established that financial development is not only the consequence of economic growth but also a driver. If the EU is to achieve the ambitious goals for unleashing private enterprise and creating jobs set out within the Europe 2020 agenda, then it cannot afford to overlook the role of the financial system in fostering innovation and growth. As supervisory authorities consider a broad set of proposals to strengthen the regulatory infrastructure, a n important quest ion that arises is how to assess the aggregate impact of these various measures. Although each may look sensible in isolation, they could still impose a larger - than - expected burden on the financial system when take n in the aggregate. The focus of policy reforms should be on forcing financial institutions to internalise the social costs of their risk - taking decisions rather than suppressing financial innovation. Credible policies to allow the failure of financial institutions would encourage market monitoring of risk - taking, reducing the need for additional prudential regulation and minimising costs to the taxpayer in the event of bankruptcy. Policymakers should aim to put in place an objective, sustainable and flexible regulatory regime, as the design of the regulatory framework will play a significant role in the future development of both the financial industry and the wider economy. International consistency in the regulatory reform agenda is also important so as not to risk fragmentation of global capital markets, which bring significant economic benefits to companies and consumers alike. The economic and social purpose of financial markets is the efficient allocation of capital, and the regulatory agenda must be framed around this goal. At a time when the European economy is struggling to recover lost ground, changes to the regulatory regime should not unduly restrict the potential of the financial sector to contribute to the continents future prosperity.
Topic:
Development, Economics, Globalization, International Trade and Finance, and Financial Crisis
Political Geography:
Europe

2010. Emerging challengers in knowledge-based industries? The case of Indian pharmaceutical multinationals

Author:
Gert Bruche
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The growth of outward foreign direct investment (FDI) from developing countries and of a new generation of “emerging multinational enterprises” (EMNEs) has stimulated a flurry of publications. EMNEs have been portrayed as on their way to adulthood, latecomers that leapfrog into advanced positions, emerging giants, and challengers of conventional multinational enterprises (MNEs) from advanced economies.
Topic:
Development, Economics, and Foreign Direct Investment
Political Geography:
South Asia and India