Strategy Forum / Panelist

John Van Reenen

Department of Economics

London School of Economics and Political Science

United Kingdom

John Van Reenen, OBE, is Ronald Coase School Professor at the London School of Economics and a Digital Fellow of Initiative for the Digital Economy at MIT. Until 2020 he was Gordon Billard Professor MIT Economics Department and Sloan Management School. He won the 2009 Jahnsson Award (European equivalent of Clark Medal).

Voting History

Statement Response
The U.S. Federal Trade Commission’s proposed ban on noncompete agreements will impact innovation and entrepreneurship outside of existing technology hubs. Disagree “Noncompetes are quite prevalent in low-tech sectors and are being used as a way of enhancing employer monopsony power. There are many other (much better) ways to promote innovation.”
The diametric experiences of Disney and UEFA illustrate that firms should refrain from making political statements in support of particular stakeholders. Disagree “Firms should be able to express positions, just as individuals can, as they are major influencers in public life.”
BP’s decision to dial back plans for cutting oil and gas production shows that short-term financial performance pressure will make it difficult for many firms to transition their strategies toward more sustainable business models. Agree “We cannot rely on the goodwill of large companies to deliver a transition to net zero. It must happen through tough policies — carbon taxes, regulation, and clean-innovation subsidies.”
Digital platform companies like Uber and Netflix have lost their first-mover advantage. Disagree “They have lost some of their advantage but still benefit from a wide network and switching costs.”
The use of generative AI will restore competition in search. Agree “It’s unclear, but Bing does seem to be making some rapid progress with OpenAI collaboration.”
New salary transparency laws will cause companies to increase bonus pay and other nonreportable perks as a share of total compensation. Agree “There’s lots of evidence that pay transparency can cause embarrassment and anger — although altogether, it’s probably a good thing.”
Artificial intelligence is reducing wasteful holiday giving (i.e., deadweight loss) by helping online retailers to better match people to presents. Disagree “I haven't seen much evidence of this matching!”
Charging for user verification will lead to increased user engagement and trust on Twitter. Strongly disagree “People will simply get irritated and not do it. They’ll either leave or suffer identity impersonation, or both.”
Corporate investments in diversity, equity, and inclusion should be expected to generate a monetary return on investment. Agree “Probably some underinvestment in seeking out the most talented. For more, see the section “Inventors’ Careers: The Potential for Lost Einsteins” in our research published in the May 2019 issue of The Quarterly Journal of Economics, titled “Who Becomes an Inventor in America? The Importance of Exposure to Innovation.””
The era of dominance for Tesla in the EV market is coming to an end. Agree “Other entrants are encouraged into the market as it expands.”
Online education and specialized degrees will supplant the traditional two-year full-time MBA.  Disagree “Face to face will remain important (although there are increasingly more hybrid options).”
Starbucks’s plans to increase wages for nonunionized workers is a shortsighted strategy. Disagree “Lots of evidence that raising wages can be beneficial for morale, retention, attracting better workers, etc. (efficiency wage theory).”
Sanctions against Russia will cause multinational companies to consider human rights protections in supply chains more broadly. Agree “Effect will likely be rather minor.”
Blockchain is more likely to be a sustaining innovation than a disruptive innovation in the financial sector. Disagree “It is likely to be disruptive in a broadly negative way from a welfare perspective.”
The field of strategic management has overlooked the role of corporate purpose in driving business performance. Disagree “Unclear if purpose is really so important.”
Socially responsible mutual funds are more of a marketing tool than a solution to environmental and social problems. Agree “To tackle climate change, we need a carbon tax, tougher regulation, and higher green R&D subsidies. For more, see my recent research, “Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence From the Auto Industry.””
When hackers take data hostage, companies should pay the ransom. Strongly agree “Creates a terrible moral hazard.”
Relaxing the rules around physical presence in the office will improve employee productivity and firm performance. Agree “It will add to flexibility for workers and reduce turnover, thus saving firms money. Frees up expensive office space.”
The COVID-19 pandemic has permanently changed how companies should think about business strategy. Agree “It has changed technology strategy — see my piece here”
The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Agree