Person:
Dutz, Mark Andrew

Macroeconomics, Trade and Investment Global Practice, The World Bank

Fields of Specialization

Industrial organization economics, Productivity

Departments

Macroeconomics, Trade and Investment Global Practice, The World Bank

Last updated March 13, 2023

Biography

Mark Dutz is Lead Economist in the Macroeconomics, Trade and Investment Global Practice of the World Bank Group. He is responsible for work on productivity growth and its interaction with poverty reduction and shared prosperity. He is co-editor of Making Innovation Policy Work: Learning from Experimentation (2014) and Promoting Inclusive Growth: Challenges and Policies (2012), and lead author of The Jobs of Tomorrow: Technology, Productivity and Prosperity in Latin America and the Caribbean (2018), and Unleashing India’s Innovation: Toward Sustainable and Inclusive Growth (2007). Dr. Dutz has taught at Princeton University and has published articles in journals and monographs in applied microeconomics, including on competition, innovation, productivity and international trade issues, and their linkages with growth and inclusion. He holds a Ph.D. in economics from Princeton University and a Masters’ in Public Affairs from Princeton’s Woodrow Wilson School.

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Now showing 1 - 10 of 27

Resource Reallocation and Innovation : Converting Enterprise Risks into Opportunities

(World Bank, Washington, DC, 2013-07) Dutz, Mark A.

This paper argues that the increased flow and management of knowledge permitted by knowledge-based capital, supported by appropriate policies, can be an important factor in reducing the decision risk facing enterprises due to uncertainty and imperfect information, helping improve the resilience of development outcomes. Enterprises are conceptualized as information platforms that manage risk through investments in knowledge-based capital and complementary assets, providing them with the knowledge, protection/enabling, insurance, and coping/leveraging abilities to make better decisions in response to shocks. Investments in knowledge-based capital allow enterprises to better convert voluntary but risky reallocation and innovation decisions into productivity and wealth-enhancing opportunities. They can help the enterprise sector as a whole and most people to self-protect and realize better jobs, earnings, and consumption outcomes by adapting to shocks. However, absent appropriate policies, knowledge-based capital can have adverse distributional effects -- including a skewed industrial concentration of productivity gains and more unequal consumption and income-earning outcomes between rich and poor people. The paper discusses the role of policy in facilitating risk management by enterprises, ultimately to reduce poverty and boost shared prosperity. Insufficient enterprise risk-taking is costly for the enterprise sector and the economy as it results in too little experimentation and learning. The paper argues that governments should create business environments that stimulate entrepreneurial risk-taking to invest in market and social opportunities that combine new technologies with appropriately-skilled workers. Policies allowing people to better confront and manage their risks include: (1) spurring entrepreneurial experimentation; (2) supporting skills upgrading; and (3) promoting mechanisms for joint learning through global collaboration.
Promoting Inclusive Growth : Challenges and Policies

(Paris: OECD and the World Bank, 2012-05) de Mello, Luiz ; Dutz, Mark A. ; de Mello, Luiz ; Dutz, Mark A.

Countries worldwide face challenges of high unemployment, unsustainable public finances and lower potential output. It is pertinent therefore to understand future challenges and devise policies accordingly. This document contains the proceedings of a conference co-hosted by the Organisation for Economic Co-operation and Development (OECD) and the World Bank in 2011. The policy issues highlighted herein include financial development, social policies, innovation, regulation, and political economy issues. The importance of structural reform, and exploiting synergies among policy domains are explored. It is understood that structural reforms can do much to unleash opportunities for investment and to allow countries to tap new sources of growth. They can also address issues of inclusiveness and social cohesion, ensuring that the benefits of sustained growth are shared equitably. Exploiting synergies among policy domains is also essential. For example, innovation calls for investment in human resources and appropriate competition policies to encourage entrepreneurship. Innovation is a key pillar of green growth, which is about greening old activities by harnessing knowledge and new technologies that can also create jobs and promote welfare in an environmentally sustainable manner.
Public and Private Investments in Innovation Capabilities : Structural Transformation in the Chilean Wine Industry

(World Bank Group, Washington, DC, 2014-07) Dutz, Mark A. ; O'Connell, Stephen D. ; Troncoso, Javier L.

This paper assembles novel data on the Chilean wine industry to investigate the role of investments in knowledge capital on sales growth in domestic and international markets. The study uses archival data collected from the Government of Chile to compile and categorize public expenditures and programs supporting the Chilean wine industry over the period of 1990-2012 into investment in different types of knowledge capital. These spending categories are related to industry-level sales growth. The paper finds that the most important correlate is spending on research and development. The study also uses data from a new survey of Chilean wine firms to capture information on firm-specific investments in knowledge capital. The findings show that investments in collaboration capital, in particular hiring foreign consultants, as well as participation in international wine fairs are the strongest correlates of growth in export sales, while spending on aspects of branding (local advertising and brand design) are the strongest correlates of domestic market sales growth.
Does More Intense Competition Lead to Higher Growth?

(World Bank, Washington, DC, 2000-04) Dutz, Mark A. ; Hayri, Aydin

The relationship between the intensity of competition in an economy and its long-run growth is an open question in economics. Theoretically, there is no clear-cut answer. Empirical evidence exists, however, that in some sectors more competition leads to more innovation, and accelerates productivity growth. To complement those findings, and capture economy-wide effects, the authors conduct a cross-country study. They examine the impact on growth of various measures having to do with intensity of domestic competition - beyond the effects of trade liberalization. Their results indicate a strong correlation between long-run growth, and effective enforcement of antitrust, and competition policy.
Regulatory Reform, Competition, and Innovation: A Case Study of the Mexican Road Freight Industry

(World Bank, Washington, DC, 2000-04) Dutz, Mark A. ; Hayri, Aydin ; Ibarra, Pablo

Discussions of competition and regulatory reform typically focus on price and quantity effects. But improving certain infrastructure services can also stimulate entry, and competition in user industries downstream, allowing new firms to enter, incumbent users to offer new products, and rivalry to intensify. The authors present a case study of how innovations in road freight services affect selected downstream users of those services after regulatory reform. After a period of rigid regulation, and heavy government interference, Mexico in 1989 developed a new policy framework for road transport, with free entry, and market-based price setting. The result: faster, more reliable trucking has allowed user companies to offer new, previously unavailable products, and to reach new areas with existing products. Cheaper, more customer-responsive trucking services have allowed logistical innovations in user firms, and some user firms have decided not to keep their own fleets of trucks, but to outsource trucking services on the open market, thereby converting fixed costs to variable costs. For one fertilizer company, the benefits of reform included a ten percent improvement in operating margin. Successful reform requires careful planning and execution, and political support at high levels. Regulatory reform also profoundly changes the sectoral institution formerly responsible for the regulation. Enough resources should be provided to help organizations in the reformed industry make the transition to the post-reform environment - helping with such tasks as defining the organizations new role, and facilitating the redeployment of staff. The national competition agency can help greatly in laying the groundwork for reform by making a compelling case for the reforms expected benefits. After reform, the competition agency should also help with enforcement, to ensure that the cozy, cartel-like behavior stimulated by tight entry restrictions does not persist. In Mexico, three strong interventions were required to discipline attempted anti-competitive practices in the trucking industry in the years following reform.
Competition and Innovation-Driven Inclusive Growth

( 2011-10-01) Dutz, Mark A. ; Kessides, Ioannis ; O'Connell, Stephen ; Willig, Robert D.

The paper investigates the strength of innovation-driven employment growth, the role of competition in stimulating and facilitating it, and whether it is inclusive. In a sample of more than 26,000 manufacturing establishments across 71 countries (both OECD and developing), the authors find that firms that innovate in products or processes, or that have attained higher total factor productivity, exhibit higher employment growth than non-innovative firms. The strength of firms' innovation-driven employment growth is significantly positively associated with the share of the firms' workforce that is unskilled, debunking the conventional wisdom that innovation-driven growth is not inclusive in that it is focused on jobs characterized by higher levels of qualification. They also find that young firms have higher propensities for product or process innovation in countries with better Doing Business ranks (both overall and ranks for constituent components focused on credit availability and property registration). Firms generally innovate more and show greater employment growth if they are exposed to more information (through internet use and membership in business organizations) and are exporters. The empirical results support the policy propositions that innovation is a powerful driver of employment growth, that innovation-driven growth is inclusive in its creation of unskilled jobs, and that the underlying innovations are fostered by a pro-competitive business environment providing ready access to information, financing, export opportunities, and other essential business services that facilitate the entry and expansion of young firms.
Green growth, technology and innovation

( 2012-01-01) Dutz, Mark A. ; Sharma, Siddharth

The paper explores existing patterns of green innovation and presents an overview of green innovation policies for developing countries. The key findings from the empirical analysis are: (1) frontier green innovations are concentrated in high-income countries, few in developing countries but growing; (2) the most technologically-sophisticated developing countries are emerging as significant innovators but limited to a few technology fields; (3) there is very little South-South collaboration; (4) there is potential for expanding green production and trade; and (5) there has been little base-of-pyramid green innovation to meet the needs of poor consumers, and it is too early to draw conclusions about its scalability. To promote green innovation, technology and environmental policies work best in tandem, focusing on three complementary areas: (1) to promote frontier innovation, it is advisable to limit local technology-push support to countries with sufficient technological capabilities -- but there is also a need to provide global technology-push support for base-of-pyramid and neglected technologies including through a pool of long-term, stable funds supported by demand-pull mechanisms such as prizes; (2) to promote catch-up innovation, it is essential both to facilitate technology access and to stimulate technology absorption by firms -- with critical roles played by international trade and foreign direct investment, with firm demand spurred by public procurement, regulations and standards; and (3) to develop absorptive capacity, there is a need to strengthen skills and to improve the prevailing business environment for innovation -- to foster increased experimentation, global learning, and talent attraction and retention. There is still considerable progress to be made in ranking green innovation policies as most appropriate for different developing country contexts -- based on more impact evaluation studies of innovation policies targeted at green technologies.
Biotechnology Innovation for Inclusive Growth : A Study of Indian Policies to Foster Accelerated Technology Adaptation for Affordable Development

(World Bank, Washington, DC, 2012-04) Vijayaraghavan, K. ; Dutz, Mark A.

This paper describes and analyzes a series of complementary policy initiatives in India to adapt and commercialize existing global biotechnologies to meet local needs in healthcare, agriculture, industry and the environment in a more affordable manner. This evolving approach has been implemented through six complementary elements, namely (1) translational research; (2) technology access through global consortia; (3) commercialization supported by public-private partnerships, broadly interpreted; (4) skills development; (5) regulation; and (6) institutional governance, including special purpose vehicles, for effective project management. The paper focuses on two public-private partnership initiatives, the Small Business Innovation Research Initiative and the Biotechnology Industry Partnership Program, which together have allocated more than US$70 million in public funding to almost 150 projects, contributing to a total public-private investment of more than $170 million over the past five years. The authors' key recommendation, to ensure effective resource use and better policy impact, is for these innovation-support initiatives to adopt more continuous monitoring with quicker feedback from learning to implementation, and more rigorous impact evaluation including approaches that allow the results of firms benefiting from support to be compared with an appropriate group of firms not benefiting from support.
Unleashing India's Innovation : Toward Sustainable and Inclusive Growth

(Washington, DC: World Bank, 2007) Dutz, Mark A.

India's recent growth has been impressive, with real GDP rising by over eight percent a year since 2004 -- accompanied by a jump in innovative activities. Growth has been driven by rapid expansion in export-oriented, skill-intensive manufacturing and, especially, skill-intensive services. The book is structured as follows: Chapter 1 reviews the Indian context and enabling environment. Chapter 2 analyzes knowledge creation and commercialization. Chapter 3 discusses knowledge diffusion and absorption. Chapter 4 encourages inclusive, pro-poor innovation. Chapter 5 addresses the need for stronger skills and education for innovation. Chapter 6 examines ways of improving information infrastructure. Chapter 7 suggests approaches to enhance innovation finance.
Economywide and Sectoral Impacts on Workers of Brazil’s Internet Rollout

(World Bank, Washington, DC, 2017-04) Dutz, Mark A. ; Ferreira Mation, Lucas ; O'Connell, Stephen D. ; Willig, Robert D.

This paper is a study of the effect of Brazil's staggered Internet rollout between 2000 and 2014 on municipality employment and wages. The study uses a new, annual data set on Internet availability from the Brazil school census, with the assumption that the share of schools that have Internet access in each municipality reflects the general accessibility of Internet connections. These data are combined with Brazil's rich, matched employer-employee survey, which contains annual occupation and wage earnings information for all formally-employed workers in Brazil across all sectors, including primary, secondary, and tertiary industry groups. Contemporaneous and lagged effects are considered. The analysis finds that increased Internet access has no statistically significant net effect on aggregate employment, and has a negative effect on average wages, with a reduction in measures of wage dispersion. Brazil’s Internet rollout results in employment shifts from sectors with more limited expansion opportunities (wholesale and retail trade, public administration, and largely publicly-owned utilities, which jointly comprise almost half of the formal workforce in 2010) to sectors with more output expansion opportunities. The employment effects are positive and most pronounced in the manufacturing, transport and storage, finance and insurance, and hospitality industry groups. In the manufacturing sector, Internet access induces positive employment and wage effects in medium- and high-skill occupations.