Cambridge Judge deans: ‘Climate change and inequality must be tackled’ – and robots must pay tax

A remarkable session of past, present and future deans of Cambridge Judge Business School addressed business education and grand societal challenges at the Cambridge Union in July.

The event organised for the Cambridge MBA cohort, before an in-person and virtual audience on July 2, brought together:

 Professor Dame Sandra Dawson, KPMG professor emeritus of management studies at Cambridge Judge and the business school’s dean from 1995 to 2006.

 Professor Christoph Loch, who steps down later this summer after 10 years as dean.

 Professor Mauro F Guillén,whose term as the next dean begins in September.

The event was moderated by Michael Kitson, university senior lecturer in international macroeconomics and director of the MBA programme at Cambridge Judge.

Memorable contributions included an assessment of the future economic landscape facing the next generation of business leaders. Prof Loch’s no-frills assessment was startlingly frank.

“There are two things which are over-riding,” he told the Cambridge Union and online audience. “One is sustainability and climate change... this is about large parts of the world becoming uninhabitable, and once two billion people need to move because they can’t live any more where they live... This is really existential.

“And the second challenge is inequality. Inequality is already leading to globalisation being questioned, structures of society being questioned, and I think that is as essential [as the first challenge]. Everything else – new technologies that we need to manage, we need to manage diversity in all of our organisations – all of that is important but it pales in comparison to these two challenges.

“And these two challenges cannot be solved by businesses alone – societies and governments need to play a lead role, but businesses absolutely must step up and make a contribution.”

Dame Sandra Dawson agreed – “climate change one, two, three and four”, she said. “It is the air we breathe, it’s the food we eat, it’s the water we drink. It’s our planet. Action now, from 2025 to 2050, is absolutely essential.”

Dame Sandra has concerns about how the levels of co-operation required to avoid the worst-case outcomes of planetary weather changes will be achieved.

“How on Earth are we going to get the sort of multilateral cross-border co-operation which joins the global north and the global south, which sees that this is one planet and one in which business and all of you are going to properly play your role – within the capitalist economy, with the profitability, within sustainability – to ensure that our planet survives and that our children and our grandchildren have indeed businesses to go with?”

Prof Guillén raised concerns that the current liberal-facing make-up of global citizens is facing a rival worldview.

“For someone who was born and raised in a dictatorship” – General Franco’s rule in Spain ended with his death in 1975 – “I can tell you that it’s no fun to be in those situations and I think that’s a big challenge and too many people are taking it lightly.

“The second one I would add, perhaps as a complement to what you both said, is waste as a global problem... I think the problem of sustainability is being compounded by the issue – we’ve got ourselves somehow into a situation in which waste is just rampant in the world, and that aggravates so many other problems, especially sustainability but others as well.”

The business school model, say the trio, has a crucial role to play in pivoting economies and economic thinking towards sustainability. Prof Loch said there is a clear moral rule of thumb which aspiring leaders must take on board.

“In the past, legitimacy was all about ownership and shareholder value, and that turned out to be devastating. It is the responsibility of business schools now to give you the legitimacy to think broader than shareholder value, to remind you that there are responsibilities that businesses have in the context of their societies.”

Prof Guillén said: “The perception in many parts of the world is that business schools suffered a reputational problem, starting wit`h the 2008-09 financial crisis, and it wasn’t really addressed, and Covid-19 then exacerbated it. Now business schools are including issues of inequality and businesses’ responsibilities to create a community of learners who are not only aware of these issues but willing to act on them as future business leaders.”

Dame Sandra added that when it comes to “the ethics and the purpose and the values, Cambridge Judge Business School has always had a sense of purpose and [is] seeking to make a positive difference”.

After discussing the role of governments and universities in promoting innovation, the “corrosive effect of inequality” was explored further.

“I’m very, very personally concerned that in the last 20 years both nationally and internationally we’ve seen the growth of inequality,” said Dame Sandra, “and it’s important to understand how people feel left behind, neglected, absolutely humiliated.

“It’s so corrosive – it goes generation after generation after generation – and it means we cannot build successful societies, which means we cannot build successful businesses, if we persist in that.”

Prof Loch remarked: “Inequality is fundamentally corrosive because it destroys the trust of the population that we’re all in the same boat. Once part of the population sees that a few privileged people have all the opportunities, that part of the population feels cut off, and this will discourage identification and co-operation with society and encourage following demagogues.”

Prof Guillén added: “If you have to point a finger at just one thing, it’s technological change because it’s most affecting people in the middle level of skills. Let me be provocative: I think the robots that are replacing human workers have to pay taxes, and with the revenues from that we can help people who are displaced.

“We’re reaching levels of inequality that we haven’t seen in 120 years, so we have to do something about it. Business has a role to play in all of this, in being aware of what the consequences are, and realising the costs being imposed on society that in the end accumulates and aggregates to a huge problem.”

The robot tax proposition is gaining traction because it is estimated 36 million jobs will become automated by 2030. Bill Gates has argued that the best way to slow down the speed of automation so that society can cope with the transition is a robot tax.

The founder of Microsoft foresees that the proceeds of a robot tax would go towards improving education and healthcare – jobs which involve empathy.

The tax, suggests Prof Guillén, would be paid by the companies that use the robots, and it should be a flat rate per month so the companies have an incentive to use the robots efficiently.

From their significant collective expertise emerged some final words of advice, firstly from Prof Guillén: “Avoid groupthink. As MBA students you’re going to be leading a team, so don’t hire people for your team who think exactly like you think, because then you’re not going to be challenged and you’re not going to be as successful.”

Dame Sandra said: “As MBA students you should always ask yourself what is the purpose of an organisation and what is my purpose in it, and am I going ahead and fulfilling that purpose?

“If you can’t answer that in terms of your identity and the purpose of the organisation that you’re with, then you need to think again and ask: ‘Do I belong here or should I go somewhere else where I can really articulate a purpose?’”

And Prof Loch, whose tenure began in 2011, concluded: “Ask yourself: ‘What would I like to look back on 30 years from now and be proud of?’ – and go for that.

“It doesn’t have to be ‘the one right thing’ because you will have opportunities to change course.”

Prof Guillén becomes dean of Cambridge Judge Business School on September 1.