“Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.”
— Peter Drucker, Innovation and Entrepreneurship (1985)
This course will introduce you to the innovator’s and entrepreneur’s disruptive role in society. The point is not that you need a special talent. It’s that you can identify and address a need.
Everyone has an opinion on what works and doesn’t work. Everyone can see how small or dramatic changes might improve matters. The problem is that few people agree on how to tackle problems. The challenge is thus to organize and make a difference. This class will focus on the influences and processes advancing or inhibiting change.
- Markets in theory and practice. Perfect competition to monopoly; monopolistic rents via regulation vs innovation. Policy in theory and practice. Tiebout competition, transaction costs (implicit norms vs explicit rules, weak and strong social networks, risk and uncertainty). Both: Public choice, bureaucracy, interest groups and regulatory capture; tragedy of the commons in action; anti-commons blocking action; Intrinsic v extrinsic motivation. Free riders v entrepreneurs
- Different goods (private goods in markets; public goods in politics). Both: latent demand, substitution across goods or markets, incremental vs disruptive innovation
- Political, Economic, Social, Technology, Legal and Environmental (PESTLE) influences. Market case study on phones: fixed vs mobile; number portability and cross connection charges. Policy case study on labor: migration (Poland in EU), remittances (Western Union vs bitcoin), transport (“Chinatown” buses vs Ryanair), etc.
- Top down (IP protocol) vs bottom up (www pages). Lean/frugal innovation. Coase: bargaining vs policies (i.e., property rights vs regulations); the transaction costs boundary between the firm and market. Specialization rising in market size
- Individual student presentations w/discussants
- Synthesis week: Reconciling conflicting or unclear ideas (lessons from week 5)
- Student group (five groups of four) project presentations
- Last essay due. Sample: “It takes a village to raise a child… or launch an idea. Apply your new knowledge and experience to addressing this new challenge.”
After completing this course you will be able to:
Discriminate between incremental vs disruptive innovation
Explain the tensions among monopoly rents, innovation and social welfare
Compare past entrepreneurial cycles with current entrepreneurial activities
Identify a challenge
Investigate PESTLE influences on the challenge
Explore the opportunities and threats in dealing with the challenge
Propose a solution for dealing with the challenge
Evaluate barriers and provide a constructive critique to the proposed solution
Once available, timetables will be published here.
Individual presentation of ideas and literature (10%)
Individual presentation + critique (20%+ 20%)
Group project/presentation (15%)
Final essay (20%)
There will be a Blackboard site available for this course. Students will be enrolled at least one week before the start of classes.
Coase, Ronald (1937). “The Nature of the Firm.” Economica 4(16):386-405
Coase, Ronald (1960). “The Problem of Social Cost.” Journal of Law and Economics (3):1-44
Micklethwait, John and Adrian Wooldridge (2005). The Company: A History. Modern Library
Roth, Alvin E. (2015). Who Gets What — and Why: The New Economics of Matchmaking and
Market Design. Eamon Dolan/Houghton Mifflin Harcourt
Williamson, Oliver (2000). “The New Institutional Economics: Taking Stock, Looking Ahead.”
Journal of Economic Literature (38):595–613
This course is open to LUC students and LUC exchange students. Registration is coordinated by the Curriculum Coordinator. Interested non-LUC students should contact firstname.lastname@example.org.
Dr. David Zetland (email@example.com).