William Lazonick, professor in the Department of Regional Economic and Social Development and director of the Center for Industrial Competitiveness at the University of Massachusetts Lowell (and past president of the Business History Conference), has been named a co-winner of this year's Schumpeter Prize, awarded by the International Joseph A. Schumpeter Society. Professor Lazonick was honored for his recent book, Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States (Upjohn Institute, 2009). The prize is awarded every two years to recognize a recent scholarly contribution related to the work of Joseph Schumpeter; this year the theme of the prize competition was “Innovation, Organization, Sustainability and Crises.” According to the Society's press release,
Lazonick’s book analyzes the transformation of the mode of business organization that characterizes US high-tech industry. He shows how a business model that was an engine of innovation in the 1980s and 1990s has resulted in an inequitable income distribution and unstable employment. Lazonick argues that, with increasing inequity and recurring instability in the 2000s, the engine of innovation has stalled. At the root of the problem is the corporate focus on stock-price performance, manifested in large-scale stock buybacks and the explosion of executive pay. This book is essential for understanding how the “financialization” of US industrial corporations has weakened the US economy and contributed to the current crisis.A press release from UMass Lowell is available here. An introductory chapter of the book is available on the Upjohn Institute Website.