Mr.Sunil Sharma, Director IMF-Singapore Regional Training Institute, Singapore

Remarks at the inauguration of the MYRA School of Business

Dr.Sunil Sharma, IMF Dr. Sunil Sharma

Mr. Deepak Parekh, the Urs family, Dean Rajiv Sinha, distinguished professors and guests, ladies and gentlemen.

I am sure that Dean Sinha and the faculty will ask a lot of hard questions and confer widely in designing the curriculum, seminars, and internships for the school. As a member of the governing board of the MYRA School of Business, what I want to do in the short time I have today is to say a few words on the context in which we are attempting to create a business school of the first rank. I think that our understanding of how the global and Indian business environments have evolved, and our view on how they should evolve, is likely to be crucial for defining the school.

To me, the view of business corporations as just being narrow profit-seeking entities has never been fully satisfactory. First, such a view denigrates the role of business in society. Second, it beggars belief that corporations that are self centered, narrowly focused, and instrumental in behavior are likely to be successful for long. Third, it asks us to judge business by a value system that we would find inadequate or inappropriate for examining most other human activities.

Private corporations have always operated under an implicit or explicit social contract with society. Business requires a number of public goods to thrive— physical infrastructure, educational institutions, legal and contractual frameworks, financial and regulatory systems, government support of research and development, and much else. Business also creates positive and negative externalities—positive when it shapes behavior and norms that enhance private and public productivity and welfare, and negative when it externalizes costs on society—and these externalities have to be handled by government policy. The nature of the social contract is shaped by both domestic and international factors and has been evolving with technological advances and changes in institutions, laws, and societal and global norms. And the willingness of the general public to bear the costs associated with the social contract, and the very legitimacy and acceptance of market-based outcomes, depends on understanding and agreeing with the central role private and public corporations can and must play in a modern market economy.

The interconnections and overlap of the private and public spheres have been growing with privatization, and the realization through experience of the importance of developing and maintaining the local and global commons. Irrespective of size, firms are realizing that local conditions—available skills, infrastructure, business norms, and public trust—are crucial to long-term success. And given this realization companies are not just relying on already stretched governments, but participating in the local commons by helping develop required skills, infrastructure, supply chains, and key intermediate inputs.

The intensity of the interconnections between the private and public spheres is also increasing because of combined responses to systemic and global problems:

  • scarcity of key resources, including human capital, energy, clean water, and a number of raw materials
  • environmental overload that is not only adding to production costs over time, but also adversely affecting the very quality of life that we all desire
  • demographic pressures and trends in many parts of the world
  • increasing income inequality and concentrations of wealth
  • rising economic insecurity for sizeable fractions of the population in many countries, and
  • the economic and social disruptions caused by international movements of capital and labor.

Addressing these challenges will need new ideas and new ways of operating businesses. This will require not only innovations in science and production technologies, but also new thinking about the roles of business and modes of cooperation between private and public entities, and the redrawing of organizational boundaries and responsibilities. For a large, poor, and globally significant country like India, how we discover solutions to these questions will be important not just for the country and the region, but for the entire world. Business schools can be key contributors by providing some of the frameworks and expertise needed for finding the answers.
So what does this imply for educating the business and government leaders of
tomorrow? A few implications come readily to mind:

  • break down academic silos. I know this is easier said than done, but the complexity of many of the problems require holistic and sometimes systemic solutions;
  • combine technical knowledge about the various facets of business with consideration of the social contract under which firms carry out their functions;
  • foster entrepreneurship, including social entrepreneurship, and instill a desire for experimentation and innovation, processes about which we have much to learn;
  • stimulate interest in having a deeper understanding of local, country-specific, regional, and global business concerns. This should produce MYRA graduates who are more adept at seeing opportunities, and well qualified for taking advantage of them.

With that, let me end by thanking you for your attention, and by wishing Dean Rajiv Sinha, Executive Director Shalini Urs, and their team the very best for creating a world class institution.