Commencement speeches give leaders the opportunity to contribute something of great value to a group of students preparing to study. More common in America, these speeches have been known to be delivered by great leaders from a range of fields. The commencement address delivered at MIT a few weeks ago provides a few interesting reminders of the role of economics in our modern world; that economics allows us to understand what we have done to work towards our current state of prosperity with indications as to what we might need to do to build towards the future.
… taking full advantage of new information and communication technologies may require extensive reorganization of work practices, reassignment and retraining of workers, and ultimately some reallocation of labor among firms and industries. Regulations that raise the costs of hiring and firing workers and that reduce employers’ ability to change work assignments–like those in a number of European countries, for example–may make such changes more difficult to achieve. Likewise, in product markets, a high degree of competition and low barriers to the entry of new firms in most industries in the United States provide strong incentives for firms to find ways to cut costs and to improve their products. In some other countries, in contrast, the prominence of government-owned firms with a degree of monopoly power, together with a regulatory environment that protects large incumbent firms and makes the entry of new firms difficult, reduces the competitive pressure for innovation and the application of new ideas. Competition is one of the key benefits of free and open trade; companies that are exposed to global competition tend to be much more efficient and to produce goods of higher quality than companies that are sheltered from international competition.
A successful society needs low costs for hiring and firing – yet, we also need to protect workers from exploitation… don’t we? Competition builds discipline and outcome-focused achievers by keeping our leaders hungry without letting them starve… yet, how much does it cost to have product, service and labour disruptions?
Some observers point to the depth, liquidity, and sophistication of American financial markets as contributing to recent productivity gains. Sizable markets for venture capital and ready access to equity financing facilitate start-up enterprises, which are often the best means of bringing new technologies to the market.
Better access to money tends to facilitate the commercialisation of new value, without ignoring the importance of actually having something of value to commercialise.
a key question each of you will face repeatedly in your lives is how to use the talent and education that you have been given and the knowledge that you have attained. With respect to your professional lives, I hope that when you make career choices, you will look first for opportunities that excite you intellectually, that allow you to use your creative powers to the fullest extent, and that let you continue to learn and grow. I hope you will not be afraid to be unconventional, to do something nobody else has thought of before. Remember that the path to success and fulfillment may not be well marked, the scaling of some predetermined ladder; it may instead be a road without signs or maps. And remember that it is OK to fail–really: New opportunities will always arise for those who seek them. If you remain nimble in searching out new and unexpected opportunities, it will not only benefit you, but it will also benefit the economy and our society, as long experience has shown that dynamism and creativity are the seeds of innovation and of progress.