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The Theory of the Experimentally Organized Economy and Competence Blocs

PublicationArticle (with peer review)
Dan Johansson, Experimentell ekonomi, Företagandets villkor, Kompetensblock, Svenska tillväxtsskolan

Abstract

This article presents the theory of the experimentally organized economy and competence blocs. The theory assumes that information is immense and that economic actors are boundedly rational. This makes practically all economic activities to some extent uncertain and unpredictable; they become experimental in nature. Economic growth is, hence, viewed as an evolutionary process of the discovery, use and selection of knowledge. So-called competence blocs—the minimum set of agents with different, but complementary competencies required to generate and commercialize new combinations—are identified as necessary for efficient resource allocation. The incentives given by the institutions to the actors in the competence bloc are crucial for economic performance.

Johansson, D. (2010). ”The theory of the experimentally organized economy and competence blocs: an introduction.”Journal of Evolutionary Economics, 20(2): 185-201.

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The Turnover of Firms and Industry Growth
Article (with peer review)Publication
Johansson, D.
Publication year

2005

Abstract

In a dynamic setting, every firm can be regarded as a “business experiment” with the objective to search and explore new business opportunities. It is suggested that the growth of an industry is enhanced by new-firm entry, since a positive correlation between the number of successes, i.e. fast-growing firms, and the number of business experiments is to be expected. Exit is necessary to sort out the firms that the market rejects. Hence, it is rather the entry and exit of firms that jointly should have a positive effect on growth, rather than the number of entries in isolation. This paper tests the hypothesis that a high turnover rate of firms has no, or a negative, effect on industry growth. The analysis is based on an extensive data set covering all Swedish IT firms that existed between 1994 and 1998. The turnover rate of firms is found to have a significantly positive effect on industry growth.

Economics without Entrepreneurship or Institutions
Article (with peer review)Publication
Johansson, D.
Publication year

2004

Published in
Abstract

A teacher’s words reflect the theory and methods he uses. Words reveal theoretical structures, the problems identified as relevant, and how those problems should be analyzed. I investigate whether entrepreneurship-rich and institutions-rich theories are represented in Ph.D. programs in economics. I analyze textbooks for the presence of terms that fall naturally into two sets. One set deals with the knowledge and discovery: entrepreneur, innovation, invention, tacit knowledge, and bounded rationality. The other deals with social rules: institutions, property rights, and economic freedom. When the words appear I examine the meaning. I examine the textbooks used in required courses in microeconomics, macroeconomics and industrial organization in all Ph.D. programs in economics in Sweden. The investigation is not specific to Sweden, however, because Ph.D. programs in Sweden are virtually identical to programs in the United States. The same textbooks are used, and nearly all of the textbooks examined are written by economists in the United States. I find that (i) all programs are in the tradition of “mainstream” economics; (ii) by and large, the eight expressions scarcely appear in the textbooks; and (iii) when they do appear, their meaning is diluted or distorted, compared to their meaning in theories where the idea is more central. In my judgment, the results constitute powerful evidence that today’s doctoral programs do not train young economists to identify and analyze important economic issues in a relevant way.

Related content: Working Paper No. 58

Is Small Beautiful? The Case of the Swedish IT Industry
Article (with peer review)Publication
Johansson, D.
Publication year

2004

Abstract

In this paper, the net job contribution of new and small firms in the Swedish Information Technology (IT) industry is investigated. The analysis is based on an extensive data set covering all IT firms in Sweden between 1993 and 1998. The smallest firms and new firms have experienced an extraordinarily fast growth and have created all net jobs in the industry, while large and old firms were major job losers. Private firms and independent firms, furthermore, grew faster than firms owned by the government and firms in enterprise groups. The results raise questions about Swedish economic policy and institutions, which have systematically disfavoured exactly those firms that the analysis shows have generated most of the growth in employment. The conducted policies (mainly introduced in the late 1960s and early 1970s) may partly explain the low economic growth observed in Sweden during the last three decades.

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