News: Stanford GSB

FOR FURTHER INFORMATION: Helen K. Chang, 650-723-3358, Fax: 650-725-6750

FOR COMMENT contact Perla Ni, 650-724-3629; ni_perla@gsb.stanford.edu

Business School Hosts First Global Business, Global Poverty Conference

May 2004

STANFORD GRADUATE SCHOOL OF BUSINESS—In the past two decades, India and China have made tremendous economic gains, raising the standard of living for many residents and improving their domestic business climates. "It's a reasonable guess that much of the growth in world markets is going to come in the third world in the foreseeable future," economist John McMillan told the audience attending the Global Business and Global Poverty Conference, held May 19. "At least some multinational corporations have awakened to the fact that it's in their interests to pay attention to what's going on in the third world."

To explore the role of global firms in emerging economies striving to break through this poverty, leaders of corporations, government, and nonprofits from four continents gathered for the conference, the first major program sponsored by the Center for Global Business and the Economy at the Stanford Graduate School of Business.

Trevor Maneul, South African Finance Minister
Manuel

Attendees heard from the leader of one of the world's largest energy companies, the head of a major Indian conglomerate, the finance minister of South Africa, and the president of Oxfam America international relief agency. They enjoyed an unannounced appearance by the Bangladeshi economist who founded his nation's Grameen Bank, credited with conceiving microlending that guarantees loans for some of his nation's poorest residents and creates entrepreneurs building tiny businesses to support themselves and their families.

McMillan, codirector of the Center and the Jonathan B. Lovelace Professor of Economics at the Business School, said nongovernmental organizations (NGOs) like Grameen Bank and Oxfam are playing an important role in increasing the wealth of third world nations, and increasingly they are doing this in cooperation with big business. "Today, NGOs no longer regard multinational corporations as ogres and vice versa," McMillan said. There is also a realistic reevaluation of government's role in economic development. "There are certain things governments have to do to create a social, economic, and legal infrastructure within which markets can do the job they are supposed to do."

John Roberts, the Center's other codirector, concurred that helping the world's poorest people become a little less poor is important outside the third world. "Since what business schools are about is making organizations and markets work better, the problems of global poverty and of economic development are really fundamentally business school problems," said Roberts, the Business School's John H. Scully Professor of Economics. "This is something our school has recognized for a long time. We've had development economists on our faculty since Gerry Meier was appointed in the 1960s. I believe he was the first business school professor in the world to focus on economic development."

The Center for Global Business and The Economy, Roberts said, aims to study the problems of today's global markets but does not want to become an ivory tower organization dealing only in abstractions. "We want to become connected with the real problems and the people who are really in a position to do something about them."

Mukesh Ambani, Chairman, Reliance Industries Ltd.
Ambani

The May conference was an example of the real-world approach. Speakers included Mukesh D. Ambani, chairman and managing director of Reliance Industries Ltd., India; Edward Barnholt, chairman, president, and CEO of Agilent Technologies; David Brady, the Bowen H. and Janice Arthur McCoy Professor of Political Science and Leadership Values at the Business School; John Browne, group chief executive of energy giant BP; John A. Gunn, president and chief investment officer of Dodge & Cox; Vinod Khosla, general partner of Kleiner Perkins Caufield & Byers; Daniel Litvin, author and founder of Percept Risk and Strategy Ltd.; Trevor Manuel, minister of finance for South Africa; Raymond Offenheiser, president of Oxfam America; and Muhammad Yunus, economist and founder of Grameen Bank of Bangladesh.

Business School Dean Robert Joss said his school's Center for Global Business and the Economy hopes to open new areas to research. "Many times we think we have the right public policies [to deal with emerging economies] but the execution—which is ultimately the province of mangers and of interest to a school of management—is what fails us so much. We're not actually getting the delivery of goods and services at a cost and at a benefit to everybody in a given country or society."

John Gunn, MBA '72
Gunn

As cell phones and the Internet make the electronic global village a reality, the poor see how the rich live. "Expectations are rising, and the question people ask themselves is 'Why them and not me?'" said John Gunn of Dodge & Cox, who with his wife, Cynthia, is one of the Center's founding donors. Other founding gifts came from BP and Mexican cement giant CEMEX.

Gunn said he wondered whether the United States will continue to move toward a free market economy. "How will the United States politically react in a world where the developing economies are making rapid strides?" he wondered. A move to free markets would benefit third world countries, he said, by reducing barriers and subsidies and so opening opportunities for poor countries to enter U.S. markets.

—Cathy Castillo

Stanford GSB News

Business School Hosts First Global Business, Global Poverty Conference

Related Links