Economic crisis… blame the MBA’s?

This week I listened to an article on NPR (American public radio) which suggests that the MBA’s were highly implicated in this economic crisis (click on “listen now” 7 min. article). If you consider that all CEO’s, CFO’s, economic planners, and many influential politicians (including presidents) had earned their MBA’s from these prestigious schools, have they not been infected with some type of hard core capitalist virus? Have they not been thinking about making profits instead of creating real wealth for the society?
Of course, the professors of business schools declare in their interviews how stupid it is to put the blame on them. Actually for me, it does not make a lot of sense to blame their education to what has been happening all around the world and all types of industries. However I would say they are guilty of something.
First of all, I should say I probably have a bias. My background is in business studies and economics, however I mingle with many economist, who having been disenchant with the mainstream economic have entered the realm of Economic Geography. When I could have done an MBA in United States or Spain, I preferred to go to Scandinavia to do a Masters of Innovation and Entrepreneurship, with a good dosage of Evolutionary Economics.
Where I think they’re guilty is on not having told their student enough about economic cycles (see my previous post to get an idea). That businesses and economies come and go, surge and plunge. I have several friend in the US and Spain with MBA’s, I know their classes and I believe this is somewhat missing. I mean, it’s something really basic. You don’t grow in a linear way. Economic growth, should be more understood as Economic evolution. You can’t make a business plan of how a business it’s going to evolve. Stories that have been told for ever (the 7 fat and 7 lean cows anyone?) were discontinued. This never ending economic growth mentality, not only happened in the mentality all across the industries, also happened with the Goverments, and the majority of the citizens.
So NPR’s article while is wrong, goes in the right direction. However, many blame the economists for having created all this bubble, and not having predicted it. But I actually believe the problem is that we don’t have, in our business schools, society and government, enough real economics.

Institutions, Innovation and Development… now

A few days ago, I joined the Workshop Institutions, Innovation and Development. I missed some sessions, but overall I can say it was an outstanding activity. I enjoyed the paper of Lundvall et al. on how looking at the systems of innovation, this was presented by Cristina Chaminade (she’s from Spain too!). The following discussion seemed very stimulating too.
Also J. Fansberg made an engaging presentation of his findings, linking the relationship between some indicators and economic development. Education, Finance, Tech, and other usual suspects were there. Two that seemed interesting to me were the importance of social cohesion (trust, tolerance, civic engagement, etc.) and that “openess to trade” has no relationship with economic development. As he said that’s a blow to the Washington Consensus. There were other geographical and sociological indicators that I would not mention until are published. But I would say that they were quite controversial.
Overall there were good presentations as you can see in the link I provided above. But probably the best one was the one form Carlota Perez. (another Spanish one!, ok Venezuela)
She focused on the financial crisis linked to her famous techno-economic paradigms. I included some of these graphs in a paper conference I participated a year ago. It’s still so relevant that I’m going to put her whole presentation, this was for and ICT conference in San Francisco. The one she did last week in this workshop focused more on the financial aspects, such as the “financial casino” vs. “real wealth creation”. As J. Fansberg pointed out, it can not be a coincidence that we have at the same time all these crises all across the public and private sector, including for example the car industry. We’re in a turning point in history. You can see slides 24-27 to better have a picture.