As the Covid-19 pandemic has spread across the globe, so has the numerous news headlines on its devastating effects on the global economy. While in March it was reported that the pandemic could cost the global economy $2.7 trillion 1, another headline in mid-May revised that figure to $8.8 trillion2. Similarly, much has been speculated in the media about the demise of globalization due to the pandemic. One of the consequences of such headlines, we have observed as professors within the larger business and management fields, is that our students are increasingly believing that their undergoing undergraduate and postgraduate studies will lead to irrelevant or invalid degrees in a post Covid-19 world.
Indeed, world flows of foreign direct investment (FDI) have dipped significantly3 since the pandemic started and some protectionist measures have emerged in sectors like healthcare, medical supplies and agriculture. Governments have deployed these protectionist industrial policies to reduce dependence on imports and ensure sufficient domestic capacity in case of another outbreak or of a looming penury. These are now the newly strategic sectors of most world economies but also, we argue the exceptions for such interventionist and protectionist measures. Thus, while the Covid-19 pandemic has prompted some aspects of globalization to slow down, people, governments and businesses everywhere are using the very tools of globalization – those based on information technology and communication – to stay connected and informed. In fact, Covid-19 related R&D collaborations between countries, research organizations, and companies are being sustained through these very globalization tools4.
One expected shift from this pandemic is some or considerable FDI flight from China5. These fleeing multinational enterprises and their investments will most likely be funneled to other countries and regions once the global economy begins its path to recovery. This implies a fresh wave of globalisation and investment that could benefit other developing economies in South and Southeast Asia, Central and Eastern Europe and possibly in Central and Latin America as well.
We have in common our research and teaching interests on the intersecting fields of innovation studies and economic/international development. Thus, we often find ourselves teaching our students that the world is made up of advanced countries, catching-up countries and falling behind countries. The successful potential “candidate countries” for this redirected FDI from China, we argue, will mostly be to catching-up countries and among other things largely determined by their institutional environments and national capabilities. Indeed, the pandemic has already triggered increased competition for attracting FDI by these candidate countries. UNCTAD reports that the crisis has boosted several countries to implement new administrative procedures to attract FDI including Myanmar, Serbia, Thailand, Lesotho, Guatemala, Cameroon, Iraq and Cuba6.
While on the other hand, we also fear that some falling behind countries in sub-Saharan Africa, in Central and Latin America and South Asia may become even more marginalized in the aftermath of the Covid-19 pandemic.
It is amid these new, challenging and some albeit alarming trends that business and management graduates and professionals will use their specialized knowledge to contribute to the recovery of the global economy. Businesses and countries, alike, are having to repurpose their models to deal with the new global economic, health and safety realities. Apart from having to navigate forces such as protectionism, business executives will need to leverage their knowledge on rationalizing cross-border activities, adapting and changing business models and supply chains on short notice in view of changing demands (for example Tesla producing ventilators with car parts) in order to maintain and sustain profitability.
While changing business models to produce products that are similar or simpler to their core activities may not entail much chaos, those businesses that are compelled to radically change their business models will face much more chaos. At HEC Montreal, for example, in addition to our trilingual degree programs (English, French and Spanish) we offer international business courses which when realigned with these new realities, will better prepare students for the demands of cross-border businesses during and post the Covid-19 pandemic. The courses will provide students with the knowledge on rationalizing global supply chains as they become more diversified, adapting their international business models, evaluating internationalization strategies, evaluating entry modes and country competitiveness under crisis and dealing with the emerging realities of a Covid-19 world. They also provide students with the knowledge on the ways in which countries and firms will build capacity and knowledge from within and innovate to deal with “this new normal”.
The Master’s course, “Multinational Enterprises, Industrialization and Development” designed by Dr. Jahan Peerally, for example, now addresses how the candidate countries mentioned above, and even countries that have so far been left behind or fallen behind can capitalize on this new normal to leverage and upgrade their capabilities in order to attract the FDI that is leaving China. Multinational enterprises will choose host countries with better institutions because their home country regulators and global investors will expect certain standards when it comes to environmental, social and governance factors.
The courses on “Innovation Process and Management” and “Globalization of Innovation” taught at Saint Mary’s University at the Master’s on Technology Entrepreneurship and Innovation were designed by Dr. Claudia De Fuentes. She now focuses more on equipping students with the knowledge and skills required to observe and identify problems and societal needs, and contribute with the creation of innovative solutions to respond to the pandemic’s effects on societies and the global economy. These courses also address the need to source knowledge not only from local settings, but additionally to identify potential sources of knowledge in a global context.
In terms of the knowledge and skills that our future leaders will require, these will focus on developing an aptitude linked to observation and networking of facts and ideas, so that they can identify potential threats and challenges. Courses will need to be realigned to stress this teaching objective. Moreover, as employment markets contract and larger enterprises downsize, graduates and professionals will more than ever need to rely on a combination of their flexibility, experiences, aspirations, entrepreneurial flairs and acquired academic knowledge, to react fast and launch start-ups and other solutions that attend to the nascent social and economic needs and challenges in the post-pandemic years. Both theory and history have shown that we will need collaboration and engagement to respond quickly to these new emerging challenges. Is it not within an academic setting that students learn about collaboration and engagement?
Our societies will also need leaders that are more inclusive in nature. The current pandemic has shown that Covid-19 is spreading more rapidly in neighbourhoods and cities where inequality is more prevalent. What does that teach us – the teachers? That in a complex and interconnected world, academics and scholars need to pedagogically provide students and future empowered employees, leaders, business-owners, and policymakers with the skills and capacity to generate change, but a change that is inclusive.
These trends will put a lot of pressure from within countries and businesses alike, and both with rely on talent with international business, innovation and entrepreneurial expertise and knowledge in seeing the larger cross-border picture and links between economic and innovation systems. This talent will be needed in the public, private and third sectors of the world economies. Companies, policymakers and capacity and capability building local and international institutions will need to strike a new balance with a broader range of stakeholders, and pay more attention to workers, the local community and the environment. More than ever, practice needs to inform policy and vice versa. Advanced countries’ governments, whether it is the Canadian government, or the various EU governments, will not only need to re-evaluate and recalibrate their own policies to survive, but they will also need to re-evaluate their foreign policies, especially their international development and aid policies for years to come to address the exacerbated challenges of falling behind countries. The latter is also true for international institutions axed on capacity and capability building and inclusive development. These mandates require a workforce across the developed and developing world that is well versed in all aspects of business and economic organization at all levels. The pandemic, we predict, will not invalidate business and management degrees, to the contrary, it will require their strengthening and stronger collaboration with other disciplines to seek solutions to complex social problems and grand challenges.