Wednesday, October 29, 2008

Bhide's New Book: The Venturesome Economy

I've been reading an advanced copy of Amar Bhide's new book, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. I must say that it is a thought-provoking manuscript that challenges much of the conventional wisdom about globalization and innovation. Bhide approaches the issue of globalization and innovation from a slightly different perspective than many other scholars, journalists, and pundits. For many years, Bhide has studied entrepreneurship. Thus, he approaches the issue of globalization and innovation by studying venture capital-backed businesses.

Bhide's main propositions are sure to prompt reaction and dissent from some quarters, but I find it refreshing to see him so eloquently argue that the United States and other western industrialized nations need not fear globalization. Here are a few of Bhide's propositions:

  • "A nation's venturesome consumption - the willingness and ability of intermediate players and individual consumers to take a chance on and effectively use new know-how and products - is at least as important as, if not more important than, its capacity to undertake high-level research."
  • "An increase in the world's supply of high-level know-how provides more raw material for mid-and ground-level innovations that increase living standards in the United States."
  • "Techno-nationalist prescriptions to protect the U.S. lead in high-level know-how may do more harm than good by impairing the performance of the other players in the innovation game who use high-level know-how."
  • Perhaps most importantly, Bhide argues that, "The development of scientific knowledge or cutting-edge technology is not a zero-sum game."

What makes the book fascinating to me is that Bhide approaches the issues of globalization and innovation from a very different perspective than traditional economists. As a business school professor, Bhide examines how venture capital-backed enterprises function. He's looking at the reality of young, innovative companies, rather than studying abstract conceptual models of the economy that are often based on assumptions that may not line up with reality. While economists clearly have much to offer to this debate about globalization, Bhide brings a new vantage point to the table. His book surely informs us in new ways, and it is certain to make us reconsider many of the key arguments being made in the popular press about globalization.