Giving the opening address to the 8th International Business Conference in Swakopmund this week to about 120 business school academics and researchers, a prominent South African economist Professor Raymond Parsons from the North West University Business School in Potchefstroom warned that business schools and the business community, both globally and in Africa, needed to give the challenge of growing income and wealth inequality a much higher priority. The fundamental question of concern in the world today was focused on this inequality and on how it could be best defused in the light of growing pressure from various stakeholders.
Referring to recent new international research highlighting a perceived growing disparity between the incomes of the rich and the rest of the community in several parts of the world, Professor Parsons said that, although the world as a whole had experienced enormous improvements in average living standards over many decades, thanks largely to private enterprise, there remained the strong perception of a widening gap between the 'haves' and the 'have not’s in several parts of the world. Even in Africa, a continent which had shown much better overall growth performance in recent years, policymakers still grappled with the key challenges of unemployment, poverty and inequality.
He said that, while business school graduates were usually seen as well-equipped to solve single business problems, they were now often viewed by many employers as increasingly unable to see the bigger picture and to grasp its relevance to business strategizing in a changing environment. Business school graduates needed to become better acquainted with the business implications of larger macro-economic trends in their decision-making. The corporate scandals, the 'boom and bust' of financial markets, and economic hardship in recent years had also led to a growing mistrust of business and had created new risks. To these now had to be added the frustration from key stakeholders arising from income inequality, he said.
Professor Parsons emphasized that, unless a business community was generally seen to be responding more proactively to help close the income gap, the field would be left open for more radical solutions, which would be in no one's long term interests. Business decision-making needed to give many more people, especially in developing countries, a bigger stake in the economy to uphold and defend. Economies needed to be more inclusive. Governments, on the other hand, also had to create a policy environment which was more favourable to enterprise development, especially small business. By working better together, business and governments could generate more shared prosperity all-round, he said.
In conclusion Professor Parsons said that, like in South Africa with its apartheid legacy, each country would have to assess the extent to which inequality of income and wealth was a serious phenomenon needed additional policies to deal with the challenge in its own socio-economic circumstances. It would nonetheless require critical support from business to help sustain the solutions that were required. Business schools had a particular role to play to ensure that present and future business leaders could more effectively understand and influence global and domestic policy agendas, as these would increasingly shape the overall business environment, as well as the ability to remain internationally competitive.