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• Article | American Economic Review | Summer, 2018

  Innovation, Reallocation and Growth

  Daron Acemoglu, Ufuk Akcigit, Harun Alp, Nicholas Bloom and William R. Kerr

  We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using U.S. Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4% improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents. Subsidies to the R&D of incumbents do not achieve this objective because they encourage the survival and expansion of low-type firms.

  Keywords: entry; Growth; industrial policy; innovation; R＆D; Reallocation; selection; Market Entry and Exit; Growth and Development; Innovation and Invention; Research and Development; Performance Productivity;

  Citation:

  Acemoglu, Daron, Ufuk Akcigit, Harun Alp, Nicholas Bloom, and William R. Kerr. "Innovation, Reallocation and Growth." American Economic Review 108, no. 11 (November 2018): 3450–3491.  View Details

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• Book | 2018

  The Gift of Global Talent: How Migration Shapes Business, Economy & Society

  William R. Kerr

  The global race for talent is on, with countries and businesses competing for the best and brightest. Foreign talent has transformed U.S. science and engineering, reshaped the economy, and influenced society at large. But America is bogged down in thorny debates on immigration policy, and the world around the United States is rapidly catching up, especially China and India. The future is uncertain, and the global talent puzzle deserves close examination. This book combines insights and lessons from business practice, government policy, and individual decision-making to give voice to data and ideas that should drive the next wave of policy and business practice.

  Keywords: Immigration; Policy; Labor; Economy; Talent and Talent Management; United States;

  Citation:

  Kerr, William R. The Gift of Global Talent: How Migration Shapes Business, Economy & Society. Stanford, CA: Stanford Business Books, 2018.  View Details

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• Article | Harvard Business Review

  Navigating Talent Hot Spots

  William R. Kerr

  Innovation clusters like San Francisco and Boston have long had an outsize impact on the global economy, and their influence keeps growing. In 2017, for instance, America’s ten largest tech hubs accounted for 58% of U.S. patents. Globally, cities such as Tokyo, Paris, Beijing, Shenzhen, and Seoul produced a similar proportion. The increased geographic concentration of innovation activity poses a challenge for firms based in suburban industrial parks. To stay relevant, they need to tap into urban hotbeds, but setting up operations there can be extremely expensive. In his work on global talent flows, Harvard Business School’s Kerr has seen organizations try three solutions: At one extreme, they can relocate their headquarters to a hub, as GE recently did (but make them much smaller). A less expensive strategy is to create an innovation lab or corporate outpost in a talent cluster, as Walmart did with Walmart Labs. The most conservative strategy is to run executive retreats and immersions in talent clusters—a tactic Vodafone uses effectively. These three options aren’t mutually exclusive. Given the need to stay in touch with multiple clusters, companies may want to try them all. Each one involves substantial risks that executives must manage. But together they offer a good playbook to firms that are finding themselves outside the action as the clout of a handful of cities grows.

  Keywords: Talent and Talent Management; Innovation and Invention; Urban Scope; Industry Clusters; Innovation and Management;

  Citation:

  Kerr, William R. "Navigating Talent Hot Spots." Harvard Business Review 96, no. 5 (September–October 2018): 80–86.  View Details

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