Last Friday, Pravin Gordhan, Minister of Finance of SA, gave a speech to the deans and directors of the South African Business Schools and their guests. His message was clear, and to be honest, since it resonated that much with me, I thought it was worth sharing with you.
According to him, the theories of a growth path without the necessary employment are becoming highly questioned (see my earlier post around the World Bank credo). Growth and employment are not the same: they are not and they have never been. So we might need to make a choice.
Inequality in society (and again Minister Gordhan’s words) is now a big issue, if not the biggest issue in the current society. If we do not reduce that inequality, the society might not be able to develop. We cannot, in any case, continue this inequality. He referred to the indeed remarkable ask from some rich French citizens (and approved by the president) to have an additional tax for the rich. Not so long ago, we had other discussions than this one in France and Europe.
The world (and Africa and South Africa) have to take a long-term perspective and should not be tempted into going for the liberal capitalist short-term view of business, performance, and reward, that has shown its weaknesses. We have to train our managers instead in certainly thinking (good enough in the short-term) to emergence thinking, necessary to be able to operate in longer term perspectives, uncertainty, complexity, etc.
Of course, obvious one would say, the minister focused on the role of entrepreneurship. The basis of business is societal value creation. Values should be the drivers for business, profit and/or shareholder value an outcome. That is what made Allan Gray decide to create the Allan Gray Centre for Values Based Leadership at the GSB.
Classical European (and US) models do not work for emerging markets, and arguable even no longer for Europe itself. All this strengthened by a disconnect between the financial (and often highly virtual) world and the real economy. Wealth creation cannot continue to go to a limited group of people, as the minister continued. We have to give hope to the young, and we do not do it with our classical models. A new curriculum is, according to him, on the table.
We will have to create an inclusive growth, which will need a real green economy. At the end of the day, it is a question of values-driven business with a high focus on entrepreneurship.
Business for the good, I presume. And I know some don’t like this term, since it would suggest that there is also business that would not be for the good. But indeed, I think there is business that is not for the good of society, the economy, but exclusively for the good of a few individuals. History is there to show us.
We have a number of possible solutions. We can do nothing, continue what we have done before, continue teaching what we have been teaching for decades, and claim that the free market is the best organizer anyway. We just ignore what we observe and sleep well.
Alternatively we can blame the government, and blame it all on poor delivery, which is an unfortunate reality. We do have to try and train governments, but we can probably wait for the rest of our lives for this to change. The means are not there. The taxable part of the economy in Africa is too small, and anyway, most of the capital is abroad. So one can blame government, train government, and find out that government will never be able to solve the issues. But it allows us to continue in the private sphere what we have been doing for years: business as usual.
A third solution, which finds increasing support in business, society and in academia is what we sometime confusingly call social enterprise, or social innovation. We could of course deny thinking about solutions since we do not get the definitions right, but I think we should get out of our ivory tower. Business schools should contribute to training managers with a different value set, with a different set of skills and a different kind of motivation. And I think it is the responsibility of business schools to contribute to this. We do need to review our curriculum, as the minister asks.
The principles of responsible management education, PRME, (academic chapter of the UN Global Compact) have brought together a growing number of academics that have been thinking, over the past 6 years, about alternatives. Those alternatives include new content, new teaching methods, new research fields (like operations of companies in the grey area between purely financially driven ones and purely government driven ones). At the GSB we have been able, with the support of the Bertha Foundation, to create the Bertha Centre for Social Innovation and Entrepreneurship. In doing so, we hope to be able to answer to some of the concerns of the minister and contribute to a less unequal society, by training managers and students to get equipped with a more contemporary values and skill set.
If business schools do not take responsibility in that necessary change, who would be better placed for doing so? And what will we tell our children and grandchildren?