Research

My work is focused on the economics of innovation; finance and economic growth; and the role of the State in modern capitalism.

My speciality is in industrial economics and the economics of growth and this is the focus of my work as R.M. Phillips Professor in the Economics of Innovation at the University of Sussex (SPRU).

My research is funded by the Ford Foundation, the Institute of Economic Thinking, and the European Commission. I have most recently been awarded two large grants from the European Commission's Horizon 2020 programme.  The first, DOLFINS- Distributed Global Financial Systems for Society, is a cross-institution partnership led by the University of Zurich, aiming to address the global challenge of improving the financial system to better serve society, placing scientific evidence and citizens participation at the centre of the policy process in finance.  It aims to improve the link between long run ‘inclusive’ growth and the structure of the financial system.

The second, ISIGrowth – Innovation-fuelled, Sustainable, Inclusive Growth – led by the University of Pisa, will examine the relationship between innovation, employment dynamics and growth in an increasingly globalised, financialised economy.  We aim to develop comprehensive policy recommendations across areas including innovation policy, fiscal policy, industrial policy, education policy and cohesion policy to achieve smart, sustainable and inclusive growth.

The primary interest of my research is the feedback between the innovative efforts of companies (in both organisational and technological change) and the impact this has on their growth and the structure of the industry in which they compete. The effect of these dynamics on how the stock market values firms, and the potential “bubble” type dynamics (such as the dot.com bubble) is also a key concern. In some industries innovation leads to a more concentrated market structure (with very few companies), while in others it opens up the process of competition allowing the industry to be inhabited by many companies. I undertake empirical work which sheds light on questions like:

  • Under which conditions are small vs large firms better innovators?
  • Under which conditions does innovation lead to a more concentrated vs. competitive industry structure, or a more stable vs. unstable one?
  • How can financial markets be restructured to reward rather than penalize innovative firms?

My recent work has linked these questions to the dynamics of stock price volatility, uncovering the possible links between innovation and stock price bubbles. Here the main questions are:

  • Does innovation affect the degree to which a company’s stock price is more volatile than its underlying earnings (the ‘excess volatility’)?
  • Does innovation affect the degree to which a company’s stock price is more volatile than its underlying earnings (the ‘excess volatility’)?
  • Are technology driven bubbles different from real-estate driven ones?
  • Innovation is extremely uncertain: how does the division of ‘innovative labour’ map into the division of returns from this risk taking behaviour?

My recent book, The Entrepreneurial State: debunking public vs. private sector myths, challenges the image of the lethargic, regulating state versus the dynamic business sector—using historical examples to show how some of the most high risk and courageous investments that led to revolutions in IT, biotechnology and nanotechnology, were sparked by public sector institutions. It offers a new way of thinking about political economy in the 21st century.

All of my current projects focus on the economic dynamics of organisational and technological change and the effect this has on economic growth. In some I lead and in others I work as a collaborator.