Growing Pains. IAB Looks at Prospects for the Global Economy


Members of IESE's International Advisory Board spoke at a Continuous Education session today in Barcelona under the title "Corporate Growth: New Business Opportunities in the Global Economy." After a welcoming address by Dean Jordi Canals, Prof. Núria Mas, who moderated the first panel, reviewed world economic growth before introducing the first panel which addressed the question of the "World Economic Outlook."

The first speaker was Michel Camdessus of the Banque de France and formerly of the IMF who said that prospects are gradually improving but that downside risk is very high. "The markets are schizophrenic," he said. "They ask for fiscal consolidation but don't like it when this slows growth."

He was followed by Patricia Francis of the International Trade Center who commented that most of the growth is coming from BRICs. Demand in the BRICs is growing by 7 percent but is much slower in OECD countries. "The challenge we face is to see that growth actually creates jobs and alleviates poverty," she said.

Janne Haaland-Matlary from the University of Oslo talked about the widespread corruption in Europe that had eroded people's faith in democracy, especially in Greece and Italy. "It is irrational for a citizen to pay taxes in a country as corrupt as Greece," she said. "The crisis has exposed the unsustainability of corrupt government. There has to be basic social justice in the system."

This view was reinforced by Denise Kingsmill, IAG Group, who expressed concern over the disconnect between business, politics and the citizenry. The knee-jerk response of business to economic setbacks is to begin sacking people, she said, adding that in a crisis "business is more pragmatic and global in its outlook while government becomes more nationalistic and protectionist."

ABB board member Han Ulrich Maerki's advice was "don't believe everything your chief economist says because in three months he'll say something different." In global business, strategy has to be reviewed at least every six months, he said, not every few years.

The second panel, chaired by Prof. Julia Prats, took as its theme "Globalization and new business opportunities. The next 10 years." Isak Andic, founder and CEO of Mango, said the company is opening 400-500 shops a year and this year is growing by over 30%. "It all depends on how much you want to work and having the right people around you," he said. "Beyond that, the sky's the limit."

Hans Jacob Bonnier of Bonnier AB commented that "the paradigm shift in media isn't just technical it's a change in consumer behavior. Mass media can be consumed wherever and whenever you like." He was followed by Andrea Christenson of Kathe Kruse Puppen who said "consumers are now on a sort of treasure hunt and you have to be sure they find you."

Stanley Motta of Motta International asked why in the developed world savings are taxed if we expect people to provide for themselves rather than rely on the state? The last speaker was Johan Schrøder of the Schrøder Foundation who said that "we in Europe have to learn from the developing world," adding that "as Europeans we have a real problem figuring out what to do. How will we address the social unrest we are going to see?"