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Business Schools Encouraging Innovation

 width=I want to pay tribute to Professor Soumitra Dutta, Dean of Cornell’s SC Johnson College of Business on the occasion of the 10th anniversary of his brainchild, the Global Innovation Index (GII), a project he launched at INSEAD, another GII partner, joined later by WIPO, the World Intellectual Property Organization. Professor Dutta is a longtime friend of GBSN.

Capturing innovation systematically across geographies and over time is a daunting proposition. The Index captures “inputs” of innovation as well as “outputs.” Inputs include institutions (the political, regulatory and business environment), human capital and research, infrastructure (such as ICT), “market sophistication” (credit, investment, trade, competition and market scale) as well as business sophistication (knowledge workers, innovation linkages and knowledge absorption). Innovation outputs include “knowledge and technological outputs” as well as “creative outputs” such as intangible assets, creative goods and services and online creativity.

Each annual GII Report focuses on a different theme. Innovation in agriculture and food systems is this year’s topic (https://www.globalinnovationindex.org/). I found the 2014 Report, which focuses on human resources, to be particularly germane to GBSN’s advocacy of pedagogies which encourage innovation: “Education systems that narrowly focus on test-based academic performance and numbers of students enrolled in science and technology subjects are not necessarily those that will produce young people with the creativity, critical thinking, and communications skills that innovative societies require.” Indeed “school assessment methods may provide a barrier [to innovation]” (p. xviii and xix). Perhaps surprisingly, “graduates of tertiary arts programs are among the most likely to contribute to product or service innovation” (p. xix). The list of desirable personal qualities of the innovative workforce resonates with those which good business schools are striving to impart: entrepreneurship, tolerance, self-confidence, leadership, creativity, activeness and risk propensity (p. 97).

The multiple components of the GII illustrates well the distinction which Paul Romer, the World Bank’s Chief Economist, draws between “things” (such as physical infrastructure) and “ideas.” Most of them relate to intangibles. Soon after I joined the International Finance Corporation my colleagues and I published a modest pamphlet. We emphasized the importance of ideas in generating prosperity: “The sources of long-term economic growth are often intangible. No single factor such as investment or education can “ignite” development. Much depends, rather, on the pace at which poorer societies can adapt knowledge that already exists in the more economically advanced parts of the world and put it to use. The challenge is how to bring about conditions in which knowledge accumulated over decades, and indeed centuries, can be usefully absorbed and effectively utilized in poorer countries. Successful developing countries are open to foreign ideas; they nurture “receptors” capable of absorbing those strands of knowledge that can take root in their local environment. Throughout the world, private enterprises act as knowledge receptors. Where competitive conditions prevail, leading enterprises will constantly seek out information that has practical uses locally. To remain competitive, other firms, in turn, will emulate their behavior. In this process, executives and employees upgrade their human capital, their productivity, and their incomes. The role of private firms in absorbing knowledge and putting it to use is especially important in the processes of technology generation and diffusion.”

Business schools can encourage innovation in a number of ways:

  • transfer relevant knowledge culled off the “world’s shelf” adapting it to local circumstances
  • nurture local private sector “receptors”, one of their most important contributions to economic and social development.
  • teach entrepreneurship, while enhancing their students’ personal qualities that are conducive to innovation through team work, experiential learning and other pedagogies
  • become a player in the innovation market through applied research
  • establish and manage incubators

GBSN itself is a catalyst for diffusing locally-relevant knowledge among its 73 member schools and with the wider business education community.

Guy Pfeffermann is the Founder & CEO of the Global Business School NetworkGlobal Innovation Index co-editor Soumitra Dutta, Cornell University, on the Global Innovation Index, which in 2017 celebrates its 10th anniversary.