Chairman’s Corner

I hope you have all enjoyed a restful summer and are looking forward to a productive fall. My own fall semester started early as I had to start teaching in the Cornell EMBA programs in end July. However, June and July were good summer months for me in which I had both the chance to spend some time with family (my elderly parents came from India and joined me, my wife and her family in Spain and our Boston based daughter also joined us for some time in Europe) and also engage with some key professional activities. Notably, I was invited to participate in the World Economic Forum’s (WEF’s) Annual Meeting of the New Champions which was held in early July in Dalian, China. Also, I was pleased to be part of a high profile launch of the Global Innovation Index in New Delhi on 24th July. I will use this blog to share some of my reflections from these two professional engagements.

Returning to China after a gap of some months is always interesting as the country seems to continue to change at a fast pace. I had taken part in several prior editions of the WEF’s Annual Summits in China and it is interesting to see how the WEF China Summit has now become focused exclusively on technology and innovation. This is not surprising per se as China’s rise in the technology domain is now recognized by many.

As an example of this rise of China in technology, Tsinghua University in Beijing could well become the top-ranked science university in the world, having produced more of the top 1% most highly-cited papers in mathematics and computing, as well as a greater share of the 10% most highly-cited papers in STEM than any other university in the world (see Figure 1).

While many analysts had come to terms with China moving beyond its traditional position as a low-cost producer, few had taken stock of how far the country had come in the frontiers of science and technology (S&T) research. Figure 2 depicts how since 2017 China has overtaken the U.S. in three key innovation metrics: scientific researchers, patents and scientific publications.

China’s rapid progress is most visible in its companies’ success. Their global achievements would not have been possible without a disciplined effort to acquire new technology and a significant investment towards home-grown innovation. Today, leading Chinese firms such as Haier and Huawei produce consumer goods that demonstrate the technological progress underway, while the battle for future technological dominance intensifies.

I had gone to the WEF’s China Summit expecting to encounter some major discussions of the ongoing trade-war between China and the USA. I was surprised to witness little of this. It is not that Chinese colleagues were not concerned about the trade war; but rather that they had accepted the fact that the trade war existed and was really a proxy for the battle for global leadership as China rises economically and militarily. Most Chinese colleagues I spoke with expected this tension for global leadership to continue regardless of any future trade agreement that may be signed between the USA and China. The China-USA trade war and the surrounding battle for global leadership seemed to be something that Chinese leaders have already accounted for as they plan for the country’s future.

What surprised me was the Chinese leaders seemed to be extremely concerned by Brexit and the uncertainty that it creates for the global economy. There was real concern that a mis-managed Brexit would trigger a recession in Europe and that may in turn also tip the global economy into a recession or a phase of very low growth. Given how events have progressed in the UK over the last 8 weeks, I think that the Chinese concerns from early July were not misplaced. Even today, the outcome of Brexit looks murky and confused and few are able to reliably predict the fallout of a no-deal Brexit.

Returning to the theme of technology and innovation, many Chinese executives also pointed out to me that the US sanctions were against a small handful of Chinese technology giants which were all born in Shenzen and based within a few kilometers of each other. The joke was that it was not really a USA vs China trade war but more of a USA vs Shenzen trade war. This highlighted the absolutely remarkable progress made in Shenzen and the Greater Bay Area in the field of technology. Firms from this region dominate the world in some key technologies for the future: 5G, mobile, Internet of Things and AI. Although I had gone to Shenzen some years ago, I made the resolve to include it in my next trip to China.

I visited India, my home country in end July for the global launch of the Global Innovation Index (GII). I had founded the GII back in 2007 when I was a professor at INSEAD and I was very pleased to see the global launch happen in India (it was the first global launch of the GII in a developing country). The GII, (more details can be found on: www.globalinnovationindex.org) is today published by Geneva-based World Intellectual Property Organization in cooperation with Cornell University and INSEAD. The GII is widely recognized as the most comprehensive measure of a country’s innovation capability. The ranking provides detailed metrics for more than 120 countries each year, representing more than 90% of the world’s population and more than 96% of the world’s GDP (in current U.S. dollars).

The results of the 2019 GII rankings confirms the rise of China in technology and innovation. From a rank of 34th in 2012, China has risen to the 14th overall position in 2019. This is absolutely remarkable progress for China, a upper middle-income economy. India has also made good progress over the last years but lags behind China in many ways. India ranks 52nd overall in the GII in 2019, gaining five positions since 2018. India scores high in some key innovation metrics such as graduates in science and engineering (7th in the world) and ICT services exports (as % of total trade) where it ranks 1st globally. While India has made good progress in some innovation metrics, there are many dimensions on which it needs to accelerate progress. Perhaps I will write about some of the innovation achievements and challenges for India in one of my future blogs for GBSN.

The 2019 GII rankings highlighted that Switzerland is the world’s most-innovative country followed by Sweden, the United States of America (U.S.), the Netherlands and the United Kingdom (U.K.). It also identified regional leaders India, South Africa, Chile, Israel and Singapore, with China, Viet Nam and Rwanda topping their income groups.

While the Global Innovation Index ranks economies according to their innovation capacity and performance, it also provides valuable insights into the dynamics of global innovation. For example, the GII shows how innovation is now prospering in selective African countries (see my GBSN blog of December 2018). The GII helps to highlight economies that excel in innovation and those that are more successful in translating investments in innovation inputs into innovation outputs. Lessons from these innovation leaders provide useful guidance on innovation policy for others. I am very pleased that today the GII research is used by many dozens of countries around the world to assess and guide their innovation policies.

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Soumitra Dutta is a Professor of Management at Cornell University and the Chair of the Board of Directors for GBSN. Previously he was the Founding Dean of the SC Johnson College of Business at Cornell and Chair of AACSB Intl. He also co-chairs the Global Future Council on innovation ecosystems for the World Economic Forum.

Email: sd599@cornell.edu; Twitter: @soumitradutta; LinkedIn: soumitra-dutta;
https://en.wikipedia.org/wiki/Soumitra_Dutta

One of the privileges of being part of the Global Business School Network is that I have the chance to meet with leaders from business schools from around the world. One recent example was a special lunch hosted by Dan LeClair, CEO GBSN in May 2019 in Cascais, Portugal for GBSN member schools who were participating in the EFMD Annual Meeting being held at the new campus of GBSN Member Nova School of Business and Economics. Before I continue on the main topic of this blog, I would be remiss if I did not mention that the new campus of Nova is exceptional and congratulations are due to Dean Daniel Traca and his leadership team. I hope that many of you will have the chance to see the new Nova campus first hand when you participate in the 2019 Annual Meeting of GBSN which will be held there on Nov 6-8th, 2019.

Over the lovely lunch of seafood in Cascais, the conversation naturally drifted towards the constant change that business schools leaders are challenged with. As I visit business schools in my role as Chair of the board of GBSN I hear frequent voices about both the opportunities and risks facing business schools in a world of accelerating innovation.

The Technology Revolution

Most business school leaders recognize that we are living in the midst of a technology revolution, the likes of which we have never seen before. Ray Kurzweil, a noted American inventor and philosopher commented on the exponential nature of this change, “In the 19th century, we saw more progress [in technology] than in the nine centuries preceding it. In the first 20 years of the 20th century we saw more advancement than in all of the 19th century. And we won’t experience 100 years of progress in the 21st century Ð it will be more like 20,000 years of progress at the current rate.”

It is difficult to visualize the true impact of this exponential nature of the technology revolution. This is because we, as human beings, live in a world of linear time. If we are asked to predict the impact of technological change in 10 years’ time, we would typically think back to the world we knew a decade ago and extrapolate linearly from today. It is very difficult for school faculty and staff to accurately predict the impact of technological changes around us.

The Expectations Revolution

The technology revolution is being accompanied by an associated revolution of expectations amongst our students. To visualize this expectations revolution, image what the worlds looks like to a young student in one of our programs today. The world is global, open, real-time, transparent and interactive. Due to the ubiquitous spread of the internet, the world has become a much smaller place. Young adults can connect with friends around the planet with the touch of a finger. Access barriers have also come down dramatically as smart phones, data networks and other forms of connectivity at home and work have spread and become available to all. The inherent real-time nature of the Internet means that waiting times have been all but eliminated. Participation has become a way of life for all as the sharing of ideas, blogs, pictures and videos have allowed for the expression of ideas from all perspectives.

This scenario is not much different today across the developed and developing worlds. This expectations revolution – a broad and dramatic shift in expectations and needs – is fueling a demand for innovation from business schools. Business schools have to adapt to the new reality of the expectations revolution. Gone is the era in which we could take days to provide a response to a student request. In a world of instant social media, business schools need to keep their fingers on the pulse of student complaints and be ready to respond to them immediately when needed. For decades schools could be content working at a leisurely pace with limited transparency of actions to students and external stakeholders. Now, with increased expectations of transparency and participation (interactivity), students and a variety of stakeholders are placing new demands of change upon business schools, and we have no choice but to innovate in the way we operate.

Leading Change

While the acceleration of innovation presents a formidable challenge for most business school leaders, it also presents an exceptional set of opportunities for the few who dare to innovate and change. The few who are inspired to re-imagine the future and take risks. The few who are disciplined to execute with determination and resilience.

So how should business school leaders react to these accelerations in the pace of innovation? While there are no panaceas, here are three important recommendations to help frame your response.

First, don’t deny the obvious. Technology is disrupting education and no school is protected from its revolutionary impact. The speed of change caused by the dual impacts of the technology and expectations revolutions is increasing and creating both opportunities and risks. Acknowledging and internalizing the disruptive forces of change is essential to begin framing an appropriate response.

Second, have an active outside-in learning strategy. While you should certainly encourage all internally generated ideas for innovation, it is likely that most disruptive ideas will emerge from stakeholders outside our schools. It is important to have a dynamic intelligence and scanning capability that proactively reaches out to our alumni, corporate partners and other stakeholders. The focus should be to learn from these partners and so the best talent should be assigned to this role. Few schools manage this outside-in learning process effectively.

Third, lead from the top. Business schools are not designed for disruptions and so do not expect any revolution to start in a bottom-up fashion. Yes, the job of the leader is to listen to multiple voices within the school, but a more important need is the ability of the leader to make strategic bets on new potentially disruptive ideas and to steer the school in the right direction. Resources have to be allocated, voices of resistance have to be managed and the energy of the school has to be mobilized towards new directions. This requires strong and clear leadership from the top.

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Soumitra Dutta is a Professor of Management at Cornell University and the Chair of the Board of Directors for GBSN. Previously he was the Founding Dean of the SC Johnson College of Business at Cornell and Chair of AACSB Intl. He also co-chairs the Global Future Council on innovation ecosystems for the World Economic Forum.

Email: sd599@cornell.edu; Twitter: @soumitradutta; LinkedIn: soumitra-dutta;
https://en.wikipedia.org/wiki/Soumitra_Dutta

 

I recall the first wave of eLearning in the 1990s. I was a professor at INSEAD then and was instrumental in creating a unit called INSEAD Online to focus on creating e-learning courses. That effort at INSEAD and similar efforts in other business schools did not take off. The reasons for the failure were many but the experience was quite typical in terms of new technology adoption challenges in many sectors.

Business schools lacked the technical expertise to create e-learning courses and business school faculty were skeptical of the effectiveness of e-learning courses, something quite new then for most of them. Out of necessity, business schools had to partner with external partners who usually had high costs of developing courses and hence the revenue sharing arrangements were biased in favor of the external partners. The high development costs also implied that customers were charged significant amounts for the e-learning modules and customer demand was weak. Technological infrastructure also had limitations and bandwidth was usually not sufficient in most locations for high quality video content. Taken together, the first wave of e-learning in business schools in the early 90s had all the excitement that comes with any new technology introduction and all the disappointment when reality does not meet expectations.

Fast forward two decades. The landscape has changed significantly. For one technology has improved exponentially and what was technically challenging in the early 90’s has become commonplace and easy. Large parts of the world are now connected to the Internet and high bandwidth connectivity has reached even mobile devices in most countries. New private sector MOOC (Massive Open Online Courses) players such as Coursera and Audacity have emerged with the goal to make learning from top notch faculty available for free (or for a small fee) to learners around the world. The technology to produce courses has also changed and costs of production have come down significantly. It is possible now for a faculty member to set up a camera (even a smartphone in some cases) in his/her office and create online content with a tablet (costing a few hundred Dollars) and simple editing software. Most business school programs now have a significant e-learning components and a range of fully online MBA programs are now available on the market. The age of digital innovation in business school education has now started in earnest.

It is time now for business school leaders to start investing significantly in digital innovations. Like any organization, going through the journey of digital transformation requires a focus on integrating digital DNA into the organization. Based on my own research and personal experience, here are some suggestions for business school leaders:

1. Leadership from the top: Any significant change in the business model of the school such as the introduction of new online programs will have to start with leadership from the top. Leadership from the Dean of the school becomes even more vital as the school contemplates more radical questions from digital disruption. Is the school willing to address a market of millions instead of thousands? And if yes, is the school willing to reduce tuition fees to zero or a very small amount? Is the school willing to create a Uber like model which opens up the universe of instructors to anyone willing to teach? And so onÉ.
2. Leveraging off the few: Most faculty in business schools are not eager to make radical changes in the way they teach and in the conduct of the classroom. However, in every school there are always a few pioneering faculty who are open to innovate and try out new experiments. These pioneers should be identified and encouraged. Their successes should be celebrated publicly and lessons should be learnt from some of their (inevitable) failures. The pioneers can be used strategically to lead the school into the era of digital learning. It is always interesting to see how others follow once the positive successes of the pioneers have been recognized.
3. Set up formal structures and processes: While everyone today is digitally capable in one way or the other (after all, they all own mobile phones and PCs), it is necessary to structure and support digital learning efforts within the school. Bottom-up efforts are good only to a certain level. It is fine to get faculty to experiment with e-learning in a bottom-up manner, but a formal structure is needed if a school wants to launch an e-learning program. If virtual classrooms are to be launched, then faculty have to be educated in the process of teaching and managing the new learning process. Introducing a degree of formality also allows for the digital learning effort to be recognized within the institution and appropriate metrics to be put in place. Hence it is not surprising to see many Universities set up their own e-learning units, such as e-Cornell at Cornell University and EdX at Harvard and MIT. These units typically have to work in close collaboration with the rest of the school.
4. Create a digital mindset of rapid experimentation and learning: Agility is a unique feature of digital startups that could bear positive results for business schools. Agility in the digital world is based on the ability to partner with a broad ecosystem of players and to experiment with ideas from which to learn rapidly. As is often said, fail fast to succeed sooner! This is a desirable cultural change for all business schools. Business schools are often criticized for being too slow and cumbersome to change. Changing the curriculum can take a couple of years and launching a new program can take even longer! This is no longer good enough in the world of digital agility. Practices can be adopted from the digital world Ð such as the practice of scrums. Thus, faculty and students at Cornell Tech get together every two months to have an open non-hierarchical discussion together of what is right and what needs to be done to improve in the program.

It is time to start investing seriously into the digital transformation of learning and the Global Business School Network can provide an effective platform to share lessons and create new partnerships across the member school network.

 

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Soumitra Dutta is a Professor of Management at Cornell University and the Chair of the Board of Directors for GBSN. Previously he was the Founding Dean of the SC Johnson College of Business at Cornell and Chair of AACSB Intl. He also co-chairs the Global Future Council on innovation ecosystems for the World Economic Forum. Email: sd599@cornell.edu; Twitter: @soumitradutta; LinkedIn: soumitra-dutta; https://en.wikipedia.org/wiki/Soumitra_Dutta

It has been about a week since I returned from the Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland. It takes a few days to recover from the hectic pace of speed-dating type of meetings, chance encounters in the corridors with business titans, listening to global leaders opining on the state of the world and a large number of competing cocktails and dinners each evening. I still have a long list of to-do items from last week that need attention.

The Davos meeting has been criticized for being an exclusive meeting of global elites who are disconnected from the reality of today’s society. While there is some truth in the criticisms, I can attest based on my seventeen participations in the Davos annual meetings over the last two decades that the meeting has only grown in appeal and participation. There are many good summaries of the 2019 Davos meeting available online such as on the WEF link. In this short note, I would like to share a couple of my key takeaways from the meeting and reflect on their implications for our world of business education.

My most notable takeaway is the strong emphasis being placed on the 4th Industrial Revolution (4IR) and how it is positioned to transform all aspects of the world around us. The overall theme of the 4IR permeated all aspects of the program. For example, there were many sessions on how the 4IR was impacting globalization and whether it was enhancing or reducing globalization (the consensus view was that it was increasing globalization despite current headwinds). I was invited to moderate one such session on how the 4IR was impacting the achievement of the United Nation’s (UN) Sustainable Development Goals (SDGs) and the group quickly converged on how technology will have to play a key role in scaling up solutions to help achieve the SDGs.

Also of striking significance this year at Davos was the prominence given to diversity and the younger generation. Each year, the Davos meeting has a small number of program co-chairs who have typically tended to be industry or government leaders. This year, six of the seven program co-chairs were a diverse group of young people (see https://www.weforum.org/agenda/2018/12/meet-the-co-chairs-of-davos-2019/) and Satya Nadella, CEO of Microsoft was the only traditional business leader in the role of a co-chair. In response to some of the criticisms raised, the Forum has over the years started including more diverse groups within its community such as by creating the Young Global Leaders (below the age of 40) and the Global Shapers (below the age of 30) groups. These younger people were given a prominent voice in sessions and it was a pleasure to interact with them during the breaks and other discussions. The voices of diversity (the Co-Chairs for the Davos 2018 meeting were all women https://www.weforum.org/agenda/2017/12/meet-the-co-chairs-for-davos-2018/) and younger people is growing inside the WEF and I am keen to see this evolve and develop further.

Being an academic for three decades now, I could not help wonder whether we are as a community taking the impacts of the 4IR seriously in what we do and how we plan our future. Yes, technology is used to varying degrees in our schools and yes, many of us have even created some elearning programs. But have we as a profession really used technology to scale up our offerings to meet the vast global need that is currently unmet? Given the global shortage of trained faculty and educational infrastructure, can we hope to meet the SDG goal 4 (“ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”)? I realized from the discussions at Davos that scaling up existing solutions (for us, educate several tens of thousands as opposed to a few hundred) is a key to success and we have be bold to push the frontiers here. Scaling up will require us to rethink our mission and mandates and adopt more flexible faculty and program delivery models.

In our business schools, we naturally deal with diversity and young people. Seeing how the WEF leverages these groups of diverse young leaders, I wonder if we are doing enough to deal with diversity and to give voice to the younger generation in shaping our institutions. Many of us tend to look at young people as “students” who have to be “taught”. While this is indeed part of the relationship that defines us, we have to open up our minds to also treat our students as equals, as important members of our community who need to be given a prominent voice in shaping and charting the future of our institutions. Some elements of this are happening, but I suspect that this is largely in an ad-hoc manner. I know from personal experience that significant culture change is needed to make these changes. For example, at Cornell Tech in New York city, faculty and students engage in an open and continuous dialogue to improve the course Ð comparable to agile software development processes. Transferring these processes of open sharing and criticism has been difficult to the mother institution in Ithaca. Diversity on all dimensions, especially gender diversity remains a challenge in most business schools for both faculty and students. I think that we could and should do better on these important aspects.

I am pleased that we are able to share and discuss these important issues within the Global Business School Network (GBSN). We all share a common purpose and I encourage us to share our good practices to help each other and to do our bit to support the UN’s SDGs.

Soumitra Dutta is a Professor of Management at Cornell University and the Chair of the Board of Directors for GBSN. Previously he was the Founding Dean of the SC Johnson College of Business at Cornell and Chair of AACSB Intl. He also co-chairs the Global Future Council on innovation ecosystems for the World Economic Forum. Email: sd599@cornell.edu; Twitter: @soumitradutta; LinkedIn: soumitra-dutta; https://en.wikipedia.org/wiki/Soumitra_Dutta

 

After exactly a decade, GBSN returned to Nairobi for its 13th Annual Conference on November 7 Ð 9, 2018. The conference, co-hosted by Strathmore Business School and the Chandaria School of Business, USIU focused on how innovation, collaboration and entrepreneurship can transform business. Over 100 management education, development and industry professionals from 34 countries convened to explore innovations in education and business.

The GBSN conference provided me with a perfect setting for speaking about the innovation successes and challenges of Africa. For over a decade I have been editing the Global Innovation Index (GII) Report (www.globalinnovationindex.org). Extending beyond the traditional measures of innovation, the GII explores a broad horizontal vision of innovation that encompasses indicators of political environment, education, infrastructure, and business sophistication. The GII has evolved into the premier index on innovation performance and provides us with a unique perspective into global innovation trends.

For several editions, the GII has noted that the Sub-Saharan Africa region performs relatively well on innovation. For example, the GII 2018 recognizes twenty countries as ‘Innovation Achievers,’ a group consisting of countries that outperform on innovation as compared to their peers at similar levels of development (see Table X below). Six out of the total twenty come from Sub-Saharan Africa, the most of any region.

Sub-Saharan Africa has seen innovation in many areas including most notably in mobile based financial transactions. A 2016 article in Science, authored by Tavneet Suri and William Jack noted that the vast majority of Kenyan households have adopted mobile money, a service that allows money to be stored in mobile phones and transmitted to others via text messages. The authors estimate that access to the Kenyan mobile money system M-PESA has increased per capita consumption levels and lifted 194,000 households or 2% of Kenyan households out of poverty.

Despite ongoing successes, much needs to be done to enhance the innovative success of Sub-Saharan Africa. Nations need dedicated innovation policies targeting innovation actors and the linkages among them, for example, via collaborative research projects, public-private partnerships and clusters. These policies should support a strong human capital and research base (including research infrastructures), sophisticated firms and markets, innovation linkages, knowledge absorption, and fostering innovation outputs as captured by the GII. Direct support for business R&D and innovation should be provided in the form of grants, subsidies or indirect measures such as R&D tax credits. There is also a need to create an “innovation culture” within businesses, students and society at large, with the intent to spur greater entrepreneurial activity and increase public appreciation for science and innovation.

Strengthening the management capacity of key public and private sector actors in Sub-Saharan African nations is essential to further develop the innovative potential of the region. This is well aligned with the mandate of GBSN. I am confident that the GBSN Annual Conference in Nairobi provided a fertile setting for many discussions and linkages to further innovation in the region.

Soumitra Dutta is a Professor of Management at Cornell University and the Chair of the Board of Directors for GBSN. Previously he was the Founding Dean of the SC Johnson College of Business at Cornell and Chair of AACSB Intl. He also co-chairs the Global Future Council on innovation ecosystems for the World Economic Forum. Email: sd599@cornell.edu; Twitter: @soumitradutta; LinkedIn: soumitra-dutta; https://en.wikipedia.org/wiki/Soumitra_Dutta