IKD: Innovation, Knowledge and Development
An Inter-Faculty Research Centre
The FIES project has been co-funded by the EC Network of Excellence Dynamics of Institutions and Markets in Europe (DIME, 2007-2012) and the FP7 project on Finance, Innovation and Growth (FINNOV, 2009-2012)
Driven by industrial innovation, in the last half of the 20th century, the populations of the advanced nations of North America and Europe attained, on average, very high standards of living. Yet, in the 21st century, large numbers of people in these nations are economically insecure. Such is particularly the case in the United States, the world's largest economy, where, even before the 2007 financial crisis, employment income had become unstable and retirement income unpredictable.
Home ownership can complement employment and retirement income as a source of economic security. Yet, again especially in the United States, the rise in subprime mortgages that preceded and precipitated the financial crisis reflected a lack of stable and remunerative employment opportunities for large segments of the population. The fact that banks and insurance companies were willing and able to use the subprime mortgage market as a foundation for making mammoth bets on financial derivatives reveals how the fortunes of the rich and poor have become inextricably joined, for better or, as we can now see, for worse.
In between the rich and poor in a highly unequal economy is the disappearing "middle class". In an age of corporate cost-cutting and offshoring, often in the name of "maximizing shareholder value", economic insecurity confronts not only the poor but also large numbers of better educated people with ample work experience and considerable skills. The movement of emerging economies such as those of China and India into higher value-added activities has created new competition for the jobs of well-educated and highly experienced workers in the advanced nations, while fiscal tightening at home threatens to drive up unemployment.
The purpose of the Financial Institutions and Economic Security project is to delve into the role of financial institutions in supporting or undermining economic security in the advanced nations of the West, and the implications for industrial innovation and economic performance.
Davies, B., Ginn, J., and Minns, R. (2010) Funded pensions: what are they for? (PDF document, 105 KB)
A highlight of the FIES project in 2009 was the IKD Conference on Financial Institutions and Economic Security (FIES) held in London, UK on 21-22 May 2009. The FIES conference considered the influence of financial institutions on employment security, retirement security, and housing security, analysing a range of examples from North America and Europe. The FIES conference report, videos of the presentations and a series of policy briefs are available for your review below.
IKD FIES Conference Report (PDF document, 60 KB)
Prof Mariana Mazzucato, Open University
Linking Economic Security to Corporate and Financial Change
Prof William Lazonick, University of Massachusetts Lowell
Economic Insecurity: Employment, Retirement, Housing (and Health)
How Shareholder Value Undermines Employment Security
Keith Smith, Imperial College Business School
Financial Institutions and Economic Security
Andrew Tylecote, University of Sheffield
Financial Markets' 'Great Distraction'
Matthieu Montalban, Groupe de Recherche en Economie Theoretique et Appliquee
France Resists Financialisation
Jürgen Kädtler, Socialogisches Forschungsinstitut Göttingen
Germany's Uneasy Shift to Shareholder Value
Janet Williamson, Trades Union Congress
Defending 'Stakeholders' Against the Maximising Shareholders
Christian Weller, University of Massachusetts (Boston)
Why Many Americans Can't Afford to Retire
Challenging the Link Between Financialisation and Insecurity
Lazonick, W. "The Buyback Boondoggle", Business Week, August 13, 2009
Lazonick, W. "Everyone is paying the price for share buy-backs", Financial Times, September 25, 2008
Jonquil Lowe, firstname.lastname@example.org