Dr Teece has over 30 years of experience as an active consultant performing economic, business and financial consulting services for businesses and governments around the world. He has worked on matters in industries ranging from music recording and DRAMS to software, lumber and petroleum, and has testified in both federal and state courts, before Congress and before the Federal Trade Commission, as well as in several international jurisdictions. He is the author of more than 200 books and articles and the co-editor of Industrial & Corporate Change (Oxford University Press).
Describe your career to date.
I’ve been a student, and then a scholar and teacher, of innovation economics and strategic management for more than three decades. I’ve published extensively. I reduced my professional appointment at UC Berkeley to 50 per cent almost two decades ago so that I could work more heartily on building companies and pursuing entrepreneurial ventures.
What attracted you to a career in competition economics?
Competition economics is an exciting field because it’s about figuring out how to make market economies work better. The essence and advantage of private enterprise over centralised planned economies are that they allow and reward innovation. Therefore, understanding how competition is aided by innovation, and vice versa, is a critical issue. Thirty years ago, echoing Schumpeter, Thomas Jorde and I said, “It is dynamic competition propelled by the introduction of new products and processes that really counts.”
How has the competition economics market changed since you started your career?
When I first began as a consultant, it was not unheard of that expert advisers received retainers. Also, in antitrust, economists did not have the dominance in testifying that they have today. Also, the Federal Rules in the US didn’t require expert reports, so it was a nightmare trying to prepare for deposition and trial.
There has been significant focus on digital platforms by antitrust regulators recently. What impact has this had on the type of work you have been doing?
Digital platforms are just one of many areas where complex innovation and competition policy issues play out; but yes, this has become a more significant part of the activity.
What are the greatest challenges currently facing competition economists?
In my view, competition economists need to use a wider lens if they are going to understand competition. Many “smart” economists fail to comprehend what’s really going on in a competitive market because they are steeped in models that are caricatures of reality.
As chairman of Berkeley Research Group, what are your main priorities for the firm’s development over the next five years?
Keep recruiting, training and retaining top talent across the board, not just in competition economics.
What advice would you give to someone starting out as a competition economist?
Master the relevant literature. That means not just understanding industrial organisation and organisational economics. It also means the very considerable literature outside of mainstream economics in innovation, evolutionary economics and technology management. Learn how to integrate these perspectives and be alert to new forms of competition, particularly those that are systematically different from our own – eg, in some autocracies all public and many private firms are an arm of the state and the assumption of profit maximising behaviour does not explain business behaviours or strategic goals. For instance, predatory pricing and predatory acquisitions are often not animated by financial goals, let alone loss recoupment.
You have enjoyed a very distinguished career so far. What would you like to achieve that you have not yet accomplished?
I’d like my own scholarship, as well as that of others, to integrate competition policy, industrial policy and technology policy. Failure to do so may well result in the inability of the Western liberal democracies to compete and deliver productivity increases and economic growth. The failure of democracy and the rise of autocracies with the concomitant loss of liberty are likely consequences. It is mission-critical that the world’s democracies integrate competition policy and other public policies to help renew our economies and societies.
David Teece is the professor in global business and director of the Tusher Initiative on intellectual capital at the Haas School of Business at the University of California, Berkeley. He previously taught at Stanford and Oxford. David earned his PhD in economics from the University of Pennsylvania. He has received eight honorary doctorates and numerous prizes and other academic recognition for his professional and academic work. He has published over 200 articles and books.
David’s academic research and writing involves corporate and business strategy with specialisations in the management of technology and its commercialisation and competition in high-tech industries. He has chaired boards of public companies and founded and guided numerous new enterprises in the United States and abroad. He also has complex deal and governance experience.
David has extensive experience in international arbitration, including appearing as an expert witness in an arbitration between the Iranian government and a department of the UK Ministry of Defence regarding valuation of partially completed tanks being built for Iran when the contract was cancelled by Iran following the fall of the shah; an arbitration between Intelsat and France Telecom and others over the distribution of satellite communications services; an arbitration between the government of Latvia and Lattelecom arising out of the decision by the government to terminate Lattelecom's exclusive contract to supply telephone service in Latvia in connection with Latvia's efforts to enter the European Union; an arbitration between Zenon and Vivendi regarding membrane-based wastewater treatment facilities; and an arbitration between members of the Space Imaging Europe joint venture in a dispute over risk allocation and performance.