One of the classes that I am taking this semester is ESD.103 - Science, Technology, and Public Policy, a course that applies theories of political economy to explore the issues at the intersection of technology, public policy, and business. This course is taught by Prof. Ken Oye who is very articulating and has been providing great cases and examples in class. I find this class very insightful although I wish he could structure his frameworks with the cases in a more concise and coherent way.
Yesterday, Prof. Oye made an interesting case in class on how regulation can actually improve on competitiveness in the economy. As someone who is keen on apply public policy and economics in the private business sector, I find this case very intriguing. In particular, Prof. Oye mentioned that regulations can increase the value of proprietary intellectual properties of private firms. Here is the case, which we discussed yesterday: suppose company X developed and patented methods to improve its products as a matter of good corporate citizenship and to get a head of anticipated regulatory standards. Its competitors, mostly from overseas, found it difficult to meet the new tightening standards although they have been enjoying high profit margin on their products because of lower costs. It now seems likely that the regulators will raise standards and require every manufacturer to produce products that meet this new standards. If you were in company X situation, what would you have done?
A. Resist tighter standards.
B. Indifferent about the whole matter.
C. Support more stringent standards.
Choice C is the rational choice. In reality, however, most companies tend to support status quo industry association position and resist tighter standards.
| 10/6/2006 6:08:08 PM (Eastern Daylight Time, UTC-04:00) |
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