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W W W . T H E A I R N E T . O R G I S S U E 2 , A U G U S T 2 0 1 2

Presidents Message
Welcome to this second edition of theAIRnews. For me, the past few months have been both busy and gratifying. A few highlights: On May 29-31, four of us Marie Carpenter, Matt Hopkins, ner Tulum, and I participated in the annual conference of the Industry Studies Association at the University of Pittsburgh where theAIRnet put on a session on Impatient capital in high-tech industries. Then, on June 6, I was in Paris, at Marie Carpenters soutenance pour lhabilitation pour diriger la recherche that is, the defense of her second thesis which in France gives a faculty member the right to supervise PhD students. This event was of particular importance to theAIRnet not only because Marie is theAIRnet President one of our founders and board members but also because, building as it did on her recent WILLIAM LAZONICK book on France Telecom (La bataille des tlcoms. Vers une France numrique, Economica, 2011), her HDR exemplifies the type of scholarly research for which theAIRnet stands. After some further work in Paris with Marie and Henrik Glimstedt on our comtech project, I was off to a conference on financial markets and corporate governance in London. While there I had dinner with Mariana Mazzucato, lucky to actually catch her on her own home turf. I also took the opportunity to meet in person for the first time another London denizen, Alain Rizk, one of our most recent AIR associates. From London the next stop was Ljubljana, where I teach a PhD course on the theory of innovative enterprise. There, as always, I had the pleasure of conversations with Tea Petrin (featured in this issue of theAIRnews) and Patricia Kotnik, both professors of economics at the University of Ljubljana. I returned to my home base in Cambridge MA at the end of June just in time for the annual conference of the Society for the Advancement of Socio-Economics (SASE), whose current president is Mari Sako of Oxford University and an AIR associate. Mari had asked me to organize a special SASE session, Does the financial economy dominate the productive economy?, in which Robert Boyer, Ron Dore, and Michael Faust joined me as contributors. Not one to sit still for too long, at the beginning of July I found myself in Brisbane, Australia at the biannual Schumpeter Conference, where I presented the latest Lazonick-Mazzucato version of The Risk-Reward Nexus in the Innovation-Inequality Relationship, as well as Who Needs a Theory of Innovative Enterprise?, which summarizes a book that I am writing for Oxford University Press. That was just a warm-up for two weeks in Sydney, where Thomas Clarke and Roy Green had invited me to be a visitor at University of Technology Sydney. I was kept busy (some of my activities there are listed later in the newsletter), and enjoyed every minute of it. And last but certainly not least, back in the USA I spent a day in New York City where, with a wonderful view of Central Park, I had a stimulating conversation with George Soros and Rob Johnson. A grant from their Institute for New Economic Thinking has been of utmost importance for the development of theAIRnet.

Meet AIR Associates

Professor Tea Petrin is a director and researcher of theAIRnet. She is professor and chair of the Entrepreneurship Department at the Faculty of Economics, and a member of the Senate at the University of Ljubljana in Slovenia. Dr. Petrin has been a visiting and Fulbright professor at various research universities in the US. Her academic research has provided the foundation for studies on small business and entrepreneurship as well as on proactive industrial policy in Slovenia and former Yugoslavia. In various roles, TEA PETRIN Dr. Petrin has advised national and international public administrations and governments such as UNDP/UNIDO, International Bank for Reconstruction and Development, and the European Commission / DG Enterprise. She worked as a professional in EUR FAO Rome (1994-97). (please turn to page 8)
theAIRnet is a 501(c)(3) tax exempt non-profit corporation, incorporated and registered in Massachusetts.

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UPCOMING EVENTS

Mary Adams organizes web-based meeting on Intangible Capital On August 14, AIR associate Mary Adams is organizing a web-based meeting on How social media and new platforms are turning IC/KM into a distributed process. More information about the event can be found online at www.icknowledgecenter.com. William Lazonick speaks at events in Argentina, S. Korea, France & New York Invited speaker, The State and Industrial Development conference on Central Banks & Financial Systems for Development, Central Bank of the Argentine Republic, Buenos Aires, October 1-2, 2012 Invited speaker, Job-Creating Growth Panel, and For the Better Workplace Panel, World Knowledge Forum, Seoul, South Korea, October 9, 2012 Keynote speaker, The Governance of Innovative Enterprise, Conference on the Governance of a Complex World, University of Nice-Sophia Antipolis, November 1-3, 2012 Organizer, Conference on Finance, Business Models, and Sustainable Prosperity, Ford Foundation Headquarters, New York City, December 6-7, 2012.

Martyn Roetter is invited to broadband policy and mobile networks events Marty Roetter will be speaking at a New America Foundation event, "Is it working? Evaluating and assessing broadband policy," to be held at the New America Foundation, Washington, DC, September 19-20, 2012. Roetter will present his work, Global Benchmarking 2012 Broadband Policies, Plans and Progress, at a byinvitation experts workshop. Roetter will also present his work on Quality of Service and Experience in Mobile Networks at the TECNOCIMIENTO Forum in Bogota, Colombia on August 23, 2012. Mariana Mazzucato will be at the Future Industry Forum event in London On September 20, 2012, Professor Mazzucato will give the presentation "The State as market-maker and shaper" at the Future Industry Forum event in London.

William Lazonick is the featured speaker at Hammer Forum at UCLA William Lazonick will be speaking at Hammer Forum of UCLA on August 16, 2012. Lazonick, along with the Silicon Valley philanthropist and venture capitalist Andy Rappoport, will focus on the topic, Capitalism in Crisis: Makers and Takers, moderated by journalist Ian Masters.

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RECENT EVENTS

theAIRnet researchers presented at the ISA event in Pittsburgh, PA On May 31, AIR associates presented their research at the Industry Studies Association 2012 Annual Conference in Pittsburgh, in a session on impatient capital in U.S. high-tech industries organized by theAIRnet. William Lazonick, The Rise of Impatient Capital in US High-Tech Industries Bob Bell, Marie Carpenter, Henrik Glimstedt, William Lazonick From Innovation to Financialization: How Cisco Became Focused on Its Stock Price & Lost Its Way William Lazonick, Mustafa Erdem Sakin, and ner Tulum, Productless IPOS and the Sustainability of the US Biopharmaceutical Industry Matt Hopkins and William Lazonick, Soaking up the Sun and Blowing in the Wind: Clean Energy Needs Patient Capital

William Milberg was a panelist at the New School for Social Research event On April 17, AIR associate William Milberg participated the event Do Budget Cuts Lead to Growth? What the US Should Learn From Austeritys Fallout in Europe and Latin America, presenting his work on Madmen in authority and the scientific foundations of austerity policies at the New School for Social Research.

William Lazonick was the featured speaker at the following events in Australia "The Economics of 'Organizational Success' and the Path to Sustainable Prosperity," Conference on Investment, Innovation and Competitiveness: What Will It Take for Australia to Lead the Pack?, Committee for Economic Development of Australia, Shangri-La Hotel, Sydney, July 6, 2012. "Sustainable Prosperity in the New Economy?," Public lecture forum, UTSpeaks: Endless Prosperity? Can Australia Find a Business Model to Keep the Good Times Going?, University of Technology Sydney, July 12, 2012. "Social Conditions of Innovative Enterprise," seminar presentation to the Innovation Division, Department of Industry, Innovation, Science, Research, and Tertiary Education, Government of Australia, Canberra, July 16, 2012. "Impatient Capital in High-Tech Industries," Centre for International Finance and Regulation, Sydney, Australia, July 18, 2012. "Innovative Enterprise and the Stock Market," Woolley Centre for the Study of Capital Market Dysfunctionality, Investment Roundtable Meeting #9, University of Technology Sydney Business School, July 19, 2012.

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RECENT EVENTS

Patricia Kotnik participated in various meetings in Europe AIR associate Patricia Kotnik has presented the results of her study on, ICT use and exports: preliminary examination, at the 11th Comparative Analysis of Enterprise Data Conference, on April 26-28, 2012 in Nuremberg, Germany. On July 3-4, Kotnik participated the ESSLimit Network analytical and project steering group meeting, held at the Tinbergen Institute in Amsterdam, Netherlands. Kotnik presented the preliminary cross-country results on the impact of ICT use on internationalization of firms at this event. In July 2012, Patricia Kotnik attended the Working Group Meeting of ClusterCOOP project in Torino, Italy. At the meeting, Kotnik presented the methodology her team has set up at the University of Ljubljana that will be used by the project partners to identify emerging industries in their countries, using quantitative and qualitative data.

Dan Breznitz was panelist at the CONNECT Innovation Institute event AIR associate Dan Breznitz attended the CONNECT Innovation Institute event on Reviving U.S. Prosperity Americas Two Systems of Innovation and What it Means for San Diego, in San Diego, California. Breznitz and the other panelists shared the key findings and recommendations of the study, Americas Two Systems of Innovation: Recommendations for Policy Changes to Support Innovation, Production and Job Creation, on May 29, 2012.

Chris Mackin participated the IAFEP Conference/Beyster Fellows Symposium On July 13, Chris Mackin participated in the International Association for the Economics of Participation Conference, in association with the Beyster Fellows Symposium, hosted by the School of Management and Labor Relations (SMLR) at Rutgers University.

Mari Sako gives the Presidential Address at SASE The 24th annual meeting of the Society for the Advancement of Socio-Economics (SASE) took place at MIT on June, 28-30, 2012. SASEs President Mari Sako, an AIR associate, gave her presidential speech Professionals between Market and Hierarchy in Comparative Political Economy, which will appear in SocioEconomic Review January 2013.

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RECENT EVENTS

Mariana Mazzucato gave speeches in Italy and UK Panel member, East Forum 2012, The Challenges of Economic Growth-New Approaches to Industrial Policy, July 12, 2012, Rome, Italy Invited speaker, After Austerity: where next for the UK economy?, June 26, 2012, London, United Kingdom Invited panel member, The European Movement and the Konrad Adenauer Stiftung EU Summit Briefing, June 25, 2012, London, United Kingdom Panel member, Science Question Time - Growth, 18 June 2012, London, United Kingdom, Institute of Physics in London. 8 June 2012, London, United Kingdom Panel member, Green innovation: How can the UK do better?, May 23, 2012, which is part of the series "The catalyst debates" hosted by the Green Alliance. Guest Speaker, How the left can get Europe growing again, hosted by Policy Network, May 16, 2012, Westminster, London, United Kingdom William Lazonick was invited speaker at various events in London and Paris Featured speaker, Impatient Capital in High-Tech Industries, Tlcom Ecole de Management, Paris, June 12, 2012 Featured speaker, How We Became the 99 Percent, and What We can Do About It, CEPN and CEPREMAP, Paris, June 12, 2012 Invited speaker, The Financialization of the US Corporation, The Future of Financial / Securities Markets, Seattle University School of Law, London, June 15, 2012 Tea Petrin attended various meetings and workshops on entrepreneurship On July 11, Tea Petrin attended the European Entrepreneurship Colloquium to present the research results of the Spin-off Phenomenon Project (the project consortium includes institutions such as University of Cambridge, KU Leuven, ETH Zurich, TUM Munich). The colloquium was hosted by The University of Cambridge Judge Business School, July 8 to 14, 2012. Tea Petrin attended the Academic Advisory Board meeting of EFER (European Forum for Entrepreneurship Research) in conjunction with the Entrepreneurship Colloquium to discuss future EFER conferences on July 12, 2012. On July 24, Petrin attended the workshop in Vienna organized by United Nations Industrial Development Organization (UNIDO) for high level government officials,in as the invited presenter of Slovenian Industrial Policy designed and implemented during her term as Minister for Economy between 1999 and 2004.

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theAIRnet IN THE MEDIA

Chris Mackin interviewed by WZBC and The Straddler Magazine Chris Mackin was interviewed by The Straddler for the Summer 2012 Issue of the magazine. In this opinion piece Occupy by Analogy: Christopher Mackin in conversation with The Straddler, Mackin sets the stage for his take on Democratic Capitalism by analyzing the symbiotic relationship between employees and employers and by drawing attention to the fracture between employment and ownership structures of business organizations. He later participated in the WZBC radio show "Sounds Of Dissent" on July 7. The show host Amy Gruder interviewed Mackin and Brendan Martin on Republic Windows & the Case for Worker Ownership. Mariana Mazzucato appears on BBC, SKY News and Bloomberg TV Mariana Mazzucato appeared on Bloomberg TV, BBC Newsnight and SKY News to discuss about the global economic crisis, the state of European economies, and policy prescriptions for rapid economic recovery and sustainable growth. Reviews and videos of Mazzucatos TV appearances can be found online at www.marianamazzucato.com William Lazonick appeared on Australian television On July 10, William Lazonick gave an interview on Australian Broadcasting Corporation (ABC), the leading nationwide television network. Lazonick discussed the adverse effects of stock buybacks on corporate innovation and competitiveness. U-T San Diego featured Dan Breznitz and Peter Cowhey report U-T San Diego article by Barbara Bry and Neil Senturia featured the CONNECT Innovation Institute report, Innovation, Production and Sustainable Job Creation: Reviving U.S. Prosperity, authored by AIR associate Dan Breznitz and Peter Cowhey. The article, Creative strategies can boost manufacturing, discusses the findings and recommendations of the research study on American manufacturing. Fred Block reviewed Krugmans latest book in Dissent Magazine On May 15, Fred Block reviewed Paul Krugmans latest book End This Depression Now! in Dissent Magazine. In his review End This Depression, But How?, Block argues that Krugman successfully defines policy prescriptions for finding way of out the current depression but fails to accurately identify the reasons caused this crises at the first place.

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News from AIR associates

Breznitz and Murphee awarded with BISA Susan Strange Book Award AIR associates Dan Breznitz and Michael Murphys book, Run of the Red Queen: Government, Innovation, Globalization, and Economic Growth in China, has been recently awarded the 2012 British International Studies Association (BISA) Susan Strange Prize. The prize recognizes an outstanding book within the international relations field among BISA members. http://www.theairnet.org/V2/home/ news.php

Dan Breznitz testifies to the US-China Economic/Security Review Commission On May 10, Dan Breznitz testified before the Senate U.S.- China Economic and Security Review Commission. In his testimony, Breznitz presented his views on changes in US-China economic relations and provided insight into rising Chinese competition and the nations innovative capabilities.

Tea Petrin assumes new roles in intergovernmental organization

Tea Petrin has recently been appointed as a member of the Committee for Development Policy, Economic and Social Council by the Secretary General of the United Nations (Jan. 1, 2013-Dec. 31, 2015). Petrin will also be serving as a member of the European Commission's new High Level Group on the Modernization of Higher Education (Sept. 2012-Dec. 31, 2012).

Mansfield Foundation US-Japan Network for the Future selects Kenji Kushida Kenji Kushida has been named a participant for the second cohort of the Mansfield Foundation US-Japan Network for the Future. The program is intended to build and enhance a network of Japan specialists that can bring diverse expertise and perspectives to the bilateral policy-making process in the mid- and long-term.

theAIRnet welcomes the new associates We are pleased to welcome Fred Block, Roy Green, Ron Hira, Masahiro Kotosaka, Jamee Moudud, Alain Rizk, and Yifei Sun as AIR associates. Their bios can be found at http://www.theairnet.org/V2/people.php

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RECENT PUBLICATIONS
Fred Block and Matthew R. Keller. The Vital Role of Government in U.S. Economic Innovation. Scholars

Strategy Network Policy Briefs, Economic Growth & Innovation, April 2012
Kenji E. Kushida. Entrepreneurship in Japan's ICT Sector: Opportunities and Protection from Japan's

Telecommunications Regulatory Regime Shift. Social Science Japan Journal 15, no. 1 (2012): 3-30.
Kenji E. Kushida, Jonathan Murray, John Zysman. The Gathering Storm: Analyzing the Cloud Computing

Ecosystem and Implications for Public Policy. Communications and Strategies, no. 85 (2012): 63-85.
Alan Pearce, Martyn Roetter, Barry Goodstadt. Has Google Gone Silent in Defending the Open Internet

Ecosystem? Bureau of National Affairs (BNA) Insight, May, 2012.

Mari Sako. Technology Strategy and Management - Business Models for Strategy and Innovation.

Communications of the ACM 55, no. 7 (2012): 22-24. WORKING PAPERS, PRESENTATIONS & PROCEEDINGS
Xiao Jian and William Milberg. Vertical Specialization and Industrial Upgrading; A Preliminary Note.

Capturing the Gains Working Paper 10, April 2012

Kenji E. Kushida. Japans Fukushima Nuclear Disaster: Narrative, Analysis, and Recommendations.

Shorenstein APARC Working Papers, June 2012

William Lazonick. Who Needs a Theory of Innovative Enterprise?, paper presented at the conference of the

International Schumpeter Society, University of Queensland, July 2-5, 2012.

William Lazonick. Financialization of the US Corporation: What We Have Lost, and How It Can be

Regained. Paper presented at the conference on The Future of Financial/Securities Markets, Seattle University School of Law, held at the University of London, UK, June 15, 2012.
William Lazonick, Yin Li. Chinas Path to Indigenous Innovation. Paper presented at the annual

conference of the Society for the Advancement of Socio-Economics, MIT, June 28, 2012.
Chris Mackin. Political Metaphors and Workplace Governance. International Association for the

Economics of Participation, Rutgers University, July 13, 2012.

Mariana Mazzucato. Rebalancing What? Reforming Finance for Creative Destruction Not Destructive

Creation. Policy Network Paper, June 24, 2012

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MEET OUR MEMBERS TEA PETRIN

She has been Slovenias representatives on the European Small Business Council, a member of the International Small Business Council, the European Association for Industrial Economics Research, and a member of the editorial board of Review of Industrial Organization. Dr. Petrin is the former Minister for Economic Affairs (and later Minister of Economy) within the Slovenian Government (1999-2004). During her term, she introduced new policies for Industrial Competitiveness and Entrepreneurship. She was also Ambassador of the Republic of Slovenia to the Netherlands (2004-08). She is the Vice-President of the Board of Advisors of The Competitiveness Institute and a member of the Academic Advisory Board of the European Forum of Entrepreneurship Research. She chaired the European Cluster Policy Group, European Commission/DG Enterprise and Industry (2009-2010), and is a member of the Synergies Expert Group, European Commission/DG Research (2010-2011). Dr. Petrin has been appointed by the Secretary General of the United Nations as a member of the Committee for Development Policy, Economic and Social Council (Jan. 1, 2013-Dec. 31, 2015). Recently, Dr. Petrin received the Golden Placate Award from the University of Ljubljana for her achievements in education and for contributing to the universitys reputation.

theAIRnet Mission The Academic-Industry Research Network theAIRnet is devoted to the proposition that a sound understanding of the dynamics of industrial development requires collaboration between academic scholars and industry experts. We engage in up-to-date, in-depth, and incisive research and commentary on issues related to industrial innovation and economic development. Our goal is to understand the ways in which, through innovation, businesses and governments can contribute to equitable and stable economic growth or what we call sustainable prosperity.

Comments? Suggestions? New Ideas? Share with us at info@theAIRnet.org

12 Newport Road Cambridge, Massachusetts 02140 USA www.theAIRnet.org We are on the web! Follow us @ Phone: 617-576-0880 Mobile: 781-308-7948 Fax: 781-803-3366 Email: info@theAIRnet.org

Dear members of theAIRnet community, please send information on your news and events to be published in theAIRnews and on the website. Please send your materials to Oner Tulum at oner.tulum@theAIRnet.org