The Myrdal Prize for 2010 has been awarded to Professor Andrew Tylecote for his book with Francesca Visintin entitled Corporate Governance, Finance and the Technological Advantage of Nations http://www.routledge.com/books/details/9780415569361/
Andrew Tylecote comments:
Everyone knows now that for most firms and countries competitive advantage depends largely on technology. (That’s not new: it was true for Sheffield when it made most of the world’s steel, around 1850.) What even experts on technology tend to overlook is how much it depends on finance (to provide the funding that technological innovation requires) and corporate governance (= power – that decides what gets funded). Our book shows how countries’ differing systems of corporate governance and finance have shaped their technological advantage; so that for example Britain excels in pharmaceuticals, Germany in machinery, Japan in robotics. It also shows how the development of corporate governance and finance has lagged behind the revolution which has been sweeping through technology for the last twenty or so years. We argue that obsolete systems of corporate governance and finance have been, and remain, a drag on this revolution: not till they are reformed will innovation be properly funded and governed. The delay is dangerous indeed. Not only does innovation require investment, it engenders it. Investment generates demand in the economy. As we wrote in the Preface (in January 2007):
‘…the result [of too little innovation] is underinvestment. In the face of a cornucopia of opportunity, the rate of investment in developed countries is low by historical standards. This represents … a real macroeconomic danger. Demand … is being maintained by the consumers and government of the United States, and …the United Kingdom, spending more than they earn. Colour has been put back into the pallid cheeks of the German and Japanese economies by demand for equipment from China, which is spending to catch up. If …either of these locomotives falters – let alone both – deep recession must follow, unless…meantime we have hitched up the best locomotive of all.’
One of those locomotives has faltered; and deep recession has followed. The reforms proposed in our book will help to generate the innovations that alone can drive a durable recovery. In explaining their award of the Myrdal Prize for 2010, the Committee called this book ‘excellent and timely’.
Professor Colin Williams, Associate Dean for Research, comments, “It is pleasing to see further evidence and confirmation of our continuing ability in the School to produce truly world-class research. What is perhaps more important however, is that in these times of financial crisis, Professor Tylecote has produced a very timely reminder of the consequences of withdrawing investment and finance, and we would do well to take heed of the important lessons that are reported in this book”.