The Theory of the Firm and the Markets for Strategic Acquisitions

Five problems are addressed: (1) the role of competent actors in the venture capital and exit markets supporting the industrialization of winning technologies in small innovative firms, (2) the competence of the large firm to integrate large-scale operational efficiency with small-scale innovative capability through distributed development work and integrated production and (3) the importance of viable markets for strategic acquisitions, both in making this possible and in allowing a flexible choice for the small firm between growing aggressively on its own through own acquisitions, or being acquired strategically itself. We (4) find that the less developed markets in continental Europe may be a disadvantage compared to the US in ushering in a future New Economy. We finally (5) discuss what becomes of the Coasian theory of the firm when production is constantly outsourced in, or insourced from the market as the relative efficiency of coordination through management and over the market changes.competence bloc; experimentally organized economy; heterogeneity; Marshallian industrial district receiver competence; strategic acquisitions

The Pharmacia Story of Entrepreneurship and as a Creative Technical University - An Experiment in Innovation, Organizational Break Up and Industrial Renaissance

While innovative technology supply has been the focus of much neo Schumpeterian modeling, few have addressed the critical and more resource demanding commercializing of the same technologies. The result may have been a growth policy focused on the wrong problem. Using competence bloc theory and a firm based macro to macro approach we abandon the assumed linear relation between technology change and economic growth of such models, and demonstrate that lack of local commercialization competences is likely to block growth even though innovative technology supplies are abundant. The break up, reorganization and part withdrawal of Pharmacia from the local Uppsala (in Sweden) economy after a series of international mergers illustrate. Pharmacia has “released” a wealth of technologies in local markets. Local commercialization competence, notably industrially competent financing has, however, not been sufficient to fill in through indigenous entrepreneurship the vacuum left by Pharmacia. Only thanks to foreign investors, attracted by Pharmacia technologies, that have opted to stay for the long term the local Uppsala economy seems to be heading for a successful future. The Pharmacia case also demonstrates the role of advanced firms as “technical universities” and the nature of an experimentally organized economy (EOE) in which business mistakes are a natural learning cost for economic development.Competence Bloc Theory; Commercialization of Innovations; Experimentally Organized Economy; Innovation and Entrepreneurship; Pharmaceutical industry

Competence in Health Care - An Industrial Systems Analysis Using Competence Bloc Theory to Compare European and US Health Care

While European health care systems are mostly public and similar the contrast is large to the US health industry based to a large extent in the market. Using competence bloc theory the industrial potential of Swedish and European health care is assessed and compared with US health industry. To get the the analysis properly framed health industry is defined to include health insurance, health care and the supporting biotech, pharmaceutical and medical instrument industries. A gradually aging industrialized world makes wealthy customers demand the sophisticated life quality enhancing medical support new technology offers. The overwhelming influence of substitute customership in Europe, through politicians, social insurance, doctors etc., however, holds back development through suppressing the preferences of the true customer (the patient), discouraging innovative product competition and entrepreneurship. The larger part of cost escalation in US health care can be attributed to quality improvements, and luxury health care has stimulated innovative product development. While Swedish health care so far has been a technological winner, commercial competence to become internationally competitive is lacking. It appears politically difficult to recognize that private for profit health care may be both more efficient and profitable than publicly run services. However, once competition for profit has been introduced public providers have to improve performance and the differences will disappear.Health care; Biotechnology; Competence blocs; Experimentally Organized Economy; Entrepreneurship; Industrial Systems analysis; Science Based Industry; Substitute Customers; University Entrepreneurship

Kristapurāṇa: Reshaping Divine Space

If a place is simply a physical location, the word space can be used for something shaped by mental processes. Physical places influence our lives by putting limits to the physically practicable, whereas spaces exercise their influence through mental processes like shaping our beliefs, values and sentiments. A space may be a mental superstructure based on an actual place, but, since its power is mental, it is not necessary that this place physically exists. One such space, with power to affect the lives of human beings, is heaven. Belief in heaven has had and still has great impact on many people’s thinking and acting. Heaven can be regarded as a part of a more general conceptual space inhabited by (ideas of) the divine and/or spiritual. I will refer to this as divine space

Resource Policy in an Endogenously Growing Economy

In a decentralized open economy model with an endogenous growth sector and a renewable resource sector a steady state-balanced growth equilibrium will at best be attained by chance. An interior equilibrium where both sectors exist and the resource sector is in equilibrium while the other sector grows can be achieved by the help of government policy. The optimum equilibrium is unstable in the decentralized economy and active government policy is needed to enforce it. Apparently contradicting policies may be needed to first move the economy to the optimal equilibrium and then to keep it there. In the current model the resource good is exported in exchange for a foreign consumption good. Hence a tariff on imports will have the same qualitative effects as a harvest fee.

The Effects of Accessibility to University Education on Enrollment Decisions, Geographical Mobility, and Social Recruitment

This paper focuses on how accessibility to higher education affects university enrollment decisions in Sweden. The analysis refers to the autumn semester of 1996 and is based on approximately 835,000 individuals aged 1929. The empirical results show that the probability of enrollment increases with accessibility to university education. The findings also reveal that accessibility adds to the likelihood of enrollment within the region of residence. Both these results are robust with regard to different specifications of accessibility. Moreover the empirical results indicate that the enrollment decisions of individuals with a less privileged background are more sensitive to accessibility to university education than those of individuals from a more advantageous background. The influence of accessibility on enrollment decreases significantly with individual ability, parental education, and parental earnings.University enrollment; accessibility; geographical mobility; social recruitment