Enterprises
Brandon Williams
Development Economics
October 29, 2024
Enterprises
Development Economics
October 29, 2024
What Capital is Missing? (2010)
- Inputs to growth studied in the economics literature:
- Access to finances for capital and the health of the financial system
- Human capital: labor markets and education
y=Ak^{\alpha}l^{1-\alpha}
measure of our ignorance about the causes of economic growth"
- Moses Abramovitz
Enterprises
Development Economics
October 29, 2024
What Capital is Missing? (2010)
- Inputs to growth studied in the economics literature:
- Access to finances for capital and the health of the financial system
- Human capital: labor markets and education
- What about managerial capital?
- Initially studied in the theory literature through the 1980s
- Two ways it could affect production function:
- Improvements to marginal productivity
- Better allocation of other inputs
- Open Questions to better understand this:
- What is the impact of managerial capital? How does it interact with other elements of the production function?
- Can managerial capital be taught, and how?
- What is the impact of managerial capital? How does it interact with other elements of the production function?
Enterprises
Development Economics
October 29, 2024
Organizational Barriers to Tech Adoption (2017)
- Soccer ball production in a cluster in Pakistan (30 million balls!)
- Technology "implementing the densest packing of pentagon in a plan known to mathematicians" generates a 1% cost reduction
- Randomly allocate to some companies, and give some the dollar value equivalent (plus control)
- Take up is shockingly low--why?
Enterprises
Development Economics
October 29, 2024
Organizational Barriers to Tech Adoption (2017)
Organizational Barriers to Tech Adoption (2017)
- Soccer ball production in a cluster in Pakistan (30 million balls!)
- Technology "implementing the densest packing of pentagon in a plan known to mathematicians" generates a 1% cost reduction
- Randomly allocate to some companies, and give some the dollar value equivalent (plus control)
- Take up is shockingly low--why?
- Results seem to indicate is working well and as expected
- Workers resist implementation and misinform about its benefits
Enterprises
Development Economics
October 29, 2024
Organizational Barriers to Tech Adoption (2017)
- Take up is shockingly low--why?
- Results seem to indicate is working well and as expected
- Workers resist implementation and misinform about its benefits
- Misaligned incentives generated by a piece-rate that naturally suffers when a new technology has to be adopted
- Model: if technology does not increase piece-rate time/pay, then workers will mislead about its usefulness
- If employers can cover the cost of adopting tech for workers, then workers can be induced to reveal the truth
- Employers may not adopt this conditional contract:
- Fear of changing pay structure
- Damaging morale
- Ratchet effect: fear of losing future pay for tech innovation
Enterprises
Development Economics
October 29, 2024
Organizational Barriers to Tech Adoption (2017)
- Take up is shockingly low--why?
- Results seem to indicate is working well and as expected
- Workers resist implementation and misinform about its benefits
- Misaligned incentives generated by a piece-rate that naturally suffers when a new technology has to be adopted
- How do we fix this misalignment?
- Randomly give companies the chance to compensate employees who effectively learn the new tool
- Doing so spurred adoption among the firms
Enterprises
Development Economics
October 29, 2024
Organizational Barriers to Tech Adoption (2017)
Enterprises
Development Economics
October 29, 2024
Organizational Barriers to Tech Adoption (2017)
- Take up is shockingly low--why?
- Results seem to indicate is working well and as expected
- Workers resist implementation and misinform about its benefits
- Misaligned incentives generated by a piece-rate that naturally suffers when a new technology has to be adopted
- How do we fix this misalignment?
- Randomly give companies the chance to compensate employees who effectively learn the new tool
- Doing so spurred adoption among the firms
- Did this simply cover the cost of technological implementation?
- Did this send a stronger signal about the efficacy of the product?
Enterprises
Development Economics
October 29, 2024