The rise or fall of management

Flip Chart Fairy Tales

Chris Dillow wonders whether managerial control has stifled innovation:

Could it be that the spread of managerialism and the pursuit of “efficiency” in the static sense of trying to maximize output for given inputs has squeezed out innovation?

Two things suggest an affirmative answer. One is casual empiricism: the growth of managerialism has been followed by a decline in trend labour productivity growth. The other is a paper from David Audretsch and colleagues, which shows that since the late 70s innovation has tended to come less from incumbent firms and more from new ventures.

I will leave the second bit of this, productivity and innovation, for another day. For now, though, I’m not convinced that we have seen a growth in managerialism, if we define that as hierarchy, control and the close management of people.

For at least the past 100 years, firms have employed professional managers with the aim…

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