Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities
This paper argues that the increased flow and management of knowledge permitted by knowledge-based capital, supported by appropriate policies, can be an important factor in reducing the decision risk facing enterprises due to uncertainty and imperf...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/07/18015946/resource-reallocation-innovation-converting-enterprise-risks-opportunities http://hdl.handle.net/10986/15892 |
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okr-10986-158922021-04-23T14:03:26Z Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities Dutz, Mark A. ENTERPRISE SECTOR ENTREPRENEUR EXPERIMENTATION GLOBAL COLLABORATION INNOVATION JOBS KNOWLEDGE-BASED CAPITAL POVERTY REDUCTION RISK MANAGEMENT SHARED PROSPERITY SHOCKS UPGRADING SKILLS This paper argues that the increased flow and management of knowledge permitted by knowledge-based capital, supported by appropriate policies, can be an important factor in reducing the decision risk facing enterprises due to uncertainty and imperfect information, helping improve the resilience of development outcomes. Enterprises are conceptualized as information platforms that manage risk through investments in knowledge-based capital and complementary assets, providing them with the knowledge, protection/enabling, insurance, and coping/leveraging abilities to make better decisions in response to shocks. Investments in knowledge-based capital allow enterprises to better convert voluntary but risky reallocation and innovation decisions into productivity and wealth-enhancing opportunities. They can help the enterprise sector as a whole and most people to self-protect and realize better jobs, earnings, and consumption outcomes by adapting to shocks. However, absent appropriate policies, knowledge-based capital can have adverse distributional effects -- including a skewed industrial concentration of productivity gains and more unequal consumption and income-earning outcomes between rich and poor people. The paper discusses the role of policy in facilitating risk management by enterprises, ultimately to reduce poverty and boost shared prosperity. Insufficient enterprise risk-taking is costly for the enterprise sector and the economy as it results in too little experimentation and learning. The paper argues that governments should create business environments that stimulate entrepreneurial risk-taking to invest in market and social opportunities that combine new technologies with appropriately-skilled workers. Policies allowing people to better confront and manage their risks include: (1) spurring entrepreneurial experimentation; (2) supporting skills upgrading; and (3) promoting mechanisms for joint learning through global collaboration. 2013-09-26T20:33:56Z 2013-09-26T20:33:56Z 2013-07 http://documents.worldbank.org/curated/en/2013/07/18015946/resource-reallocation-innovation-converting-enterprise-risks-opportunities http://hdl.handle.net/10986/15892 English en_US Policy Research Working Paper;No. 6534 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ENTERPRISE SECTOR ENTREPRENEUR EXPERIMENTATION GLOBAL COLLABORATION INNOVATION JOBS KNOWLEDGE-BASED CAPITAL POVERTY REDUCTION RISK MANAGEMENT SHARED PROSPERITY SHOCKS UPGRADING SKILLS |
| spellingShingle |
ENTERPRISE SECTOR ENTREPRENEUR EXPERIMENTATION GLOBAL COLLABORATION INNOVATION JOBS KNOWLEDGE-BASED CAPITAL POVERTY REDUCTION RISK MANAGEMENT SHARED PROSPERITY SHOCKS UPGRADING SKILLS Dutz, Mark A. Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities |
| relation |
Policy Research Working Paper;No. 6534 |
| description |
This paper argues that the increased
flow and management of knowledge permitted by
knowledge-based capital, supported by appropriate policies,
can be an important factor in reducing the decision risk
facing enterprises due to uncertainty and imperfect
information, helping improve the resilience of development
outcomes. Enterprises are conceptualized as information
platforms that manage risk through investments in
knowledge-based capital and complementary assets, providing
them with the knowledge, protection/enabling, insurance, and
coping/leveraging abilities to make better decisions in
response to shocks. Investments in knowledge-based capital
allow enterprises to better convert voluntary but risky
reallocation and innovation decisions into productivity and
wealth-enhancing opportunities. They can help the enterprise
sector as a whole and most people to self-protect and
realize better jobs, earnings, and consumption outcomes by
adapting to shocks. However, absent appropriate policies,
knowledge-based capital can have adverse distributional
effects -- including a skewed industrial concentration of
productivity gains and more unequal consumption and
income-earning outcomes between rich and poor people. The
paper discusses the role of policy in facilitating risk
management by enterprises, ultimately to reduce poverty and
boost shared prosperity. Insufficient enterprise risk-taking
is costly for the enterprise sector and the economy as it
results in too little experimentation and learning. The
paper argues that governments should create business
environments that stimulate entrepreneurial risk-taking to
invest in market and social opportunities that combine new
technologies with appropriately-skilled workers. Policies
allowing people to better confront and manage their risks
include: (1) spurring entrepreneurial experimentation; (2)
supporting skills upgrading; and (3) promoting mechanisms
for joint learning through global collaboration. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Dutz, Mark A. |
| author_facet |
Dutz, Mark A. |
| author_sort |
Dutz, Mark A. |
| title |
Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities |
| title_short |
Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities |
| title_full |
Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities |
| title_fullStr |
Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities |
| title_full_unstemmed |
Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities |
| title_sort |
resource reallocation and innovation : converting enterprise risks into opportunities |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/07/18015946/resource-reallocation-innovation-converting-enterprise-risks-opportunities http://hdl.handle.net/10986/15892 |
| _version_ |
1764431883549016064 |