Nick Bloom is an Assistant Professor of Economics at Stanford University, having previously worked at the Centre for Economic Performance, and the Institute for Fiscal Studies. His main research interests are on measuring and explaining management and organisational practices across firms and countries, and trying to use this to explain differences in firm and country level growth. He also works on innovation and IT, looking at factors that effect these such as competition, tax, learning and Government regulations. A third area of research is on the causes and consequences of uncertainty, arising both from one-off events like the 9/11 terrorist attack and the Cuban Missile crisis, and also from slower-moving uncertainty fluctuations over the business cycle. He previously worked as a policy advisor at HM Treasury and as a management consultant at McKinsey & Company. He is a graduate of Cambridge University, with a PhD from University College London.
Recent work has highlighted the incredible dispersion of productivity in developing countries and how this contributes to their lower aggregate productivity levels. Low productivity in developing countries leads to lower wages and ultimately much lower consumption. Why is there such a large spread of productivity and what policies can address this?
A long-standing question in social science is to what extent differences in management cause differences in firm performance. To investigate this we ran a management field experiment on large Indian textile firms. We provided free consulting on modern management practices to a randomly chosen set of treatment plants and compared their performance to the control plants. We find that adopting these management practices had three main effects. First, it raised average productivity by 11 per cent through improved quality and efficiency and reduced inventory.
Firm capabilities are crucial to economic development in poor nations, and therefore understanding how firms differ and how they evolve is a crucial component for any robust theory of growth. For instance, why do firms in developing countries struggle to grow and increase productivity, even though the hard and soft technologies are available?