Abstract: Before the Great Recession, financialisation was a ‘fringe’ concept, but post-recession it moved into the mainstream. In this paper, I begin by reviewing the financial model of the firm, the managerial dilemmas it poses, why it is not sustainable, and why it has led to greater inequality. I then examine alternatives to the financial model—the less visible but important range of experiments in social innovation and institutional renewal that local and regional actors are pursuing to create more inclusive forms of productive enterprise. These experiments provide a testing ground for solutions that may later get to scale. They vary across different contexts, depending on the institutional points of leverage and resources that are available. They include reforms in three domains: labour market institutions, organisational governance, and social finance. The role of academic scholars in this period is to engage with these actors, build an empirical inventory of alternative approaches to productive enterprise, and develop an interdisciplinary analysis of potential models for sustainable and inclusive economies.
Key words: financialisation, private equity, financial model of the firm, firm sustainability, inequality, corporate governance, social innovation, cooperatives, social economy
Publication date: 15 Mar 2018
Author: Rosemary Batt
Publisher: Journal of the British Academy, volume 6 (2018)
Digital Object Identifier: https://doi.org/10.5871/jba/006.065