Insights from a Columbia Professor

I am a regular Listener of Econtalk, where an Economics scholar (Russell Roberts) talks with luminaries of the field about various aspects of political economy. This week I listened with interest to Prof Amar Bhide of Columbia business school talk about outsourcing and venturesome economy. I was hooked early on when he talked about the fears of Americans regarding innovation in other countries, and the supposed lack of basic science research at home (link to the episode page).

He said that there are multiple levels of innovation, but they may be divided into three basic ones. Taking the example of shipping, the Archimedes’ Principle regarding buoyancy is critical, but not sufficient to build a ship. You need technical expertise of various kinds for that. And then you need to run the shipyard, and that requires a different set of skills altogether. His point was that basic research is all well and good, but the knowledge, once created, is there for all to use. What is much more critical for prosperity is the application of that knowledge, and that requires skills that are much more local. Leading a team of workers to either build, or manage requires much more local knowledge, and contributes much more to the profits than basic research. We may agree or not with him, (I do, with the caveat of health care) but the idea leads to interesting paths.

I think its obvious from his exposition that the three basic tiers of wealth creation are basic sciences, technical sciences (like medicine and engineering), and management sciences. And it is interesting to see that almost all of my classmates are moving from technical sciences to management, implicitly agreeing with his theory that this will lead to them contributing more than they do now (and presumably receiving more too 🙂 )

And now, look at this EPGP course. One of the major explicit differentiators for the course is the focus on India and emerging economies. This ties in well with Prof Bhide’s thoughts that the management needs to be much more focused on the local factors that any other branch. There is going to be a local focus throughout the course while teaching us general principles. Sure, there are differences between different emerging economies, and that’s why we will have full-time immersion into these counties for several weeks, giving us a first hand experience of how business is done there. This fantastic aproach is one of the reasons I’m excited to pursue this course.

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