Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2017
  • Working Paper
  • HBS Working Paper Series

Business History, the Great Divergence and the Great Convergence

By: Geoffrey Jones
  • Format:Print
  • | Language:English
  • | Pages:34
ShareBar

Abstract

This working paper provides a business history perspective on debates about the Great Divergence, the rise of the income gap between the West and the Rest, and the more recent Great Convergence, which has seen a narrowing of that gap. The literature on the timing and causes of the Great Divergence has focused on macro analysis. This working paper identifies the potential for more engagement at the micro level of business enterprises. While recognizing that the context of institutions, education, and culture plays a role in explanations of wealth and poverty, the paper calls for a closer engagement with the processes of how these factors translated into generating productive firms and entrepreneurs. The challenges of catching up were sufficiently great in the Rest that initially, minorities held significant advantages in raising capital and trust levels, which enabled them to flourish as entrepreneurs. Yet by the interwar years, there is evidence of a more general emergence of modern business enterprise in Asia, Latin America, and Africa. Many governmental policies after 1945 designed to facilitate catch-up ended up crippling such emergent business enterprises without putting effective alternatives in place. The second wave of globalization from the 1980s provided more opportunities for catch-up from the Rest. Firms from emerging markets had the opportunity to access the global networks that replaced large integrated firms. There were also new ways to access knowledge and capital, including through management consultancies and hiring graduates from business schools. The upshot was the rise to global prominence of firms based in the Rest, including Foxcomm, Huawei, HNA, Cemex, and TCS.

Keywords

Business History; Economics; History; Wealth and Poverty; Developing Countries and Economies; Economic Growth

Citation

Jones, Geoffrey. "Business History, the Great Divergence and the Great Convergence." Harvard Business School Working Paper, No. 18-004, July 2017.
  • SSRN
  • Read Now

About The Author

Geoffrey G. Jones

General Management
→More Publications

More from the Author

    • 2025
    • Faculty Research

    An Appraisal on 'Teaching the Early History of IB at Harvard Business School'

    By: Geoffrey Jones
    • 2025
    • Faculty Research

    Institutional Entrepreneurship and Climate Change

    By: Ann-Kristin Bergquist and Geoffrey Jones
    • February 2025
    • Asian Business & Management

    Deep Responsibility, SDGs, and Asia: A Historical Perspective

    By: Geoffrey Jones
More from the Author
  • An Appraisal on 'Teaching the Early History of IB at Harvard Business School' By: Geoffrey Jones
  • Institutional Entrepreneurship and Climate Change By: Ann-Kristin Bergquist and Geoffrey Jones
  • Deep Responsibility, SDGs, and Asia: A Historical Perspective By: Geoffrey Jones
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.