A Conversation with Professor Jan Rivkin

Beth Peters, Contributor
Professor Jan Rivkin, the Senior Associate Dean for Research and a Professor in the Strategy Unite, chats to Beth Peters about his views on automation, globalization, and why MBAs must play a role in creating shared prosperity for all.

Recent political events like the US election and Brexit have made it clear that, while MBA students are experiencing a golden age where we can leverage our skills and technology to generate high returns on a global scale, many middle- and low-skilled jobs are being automated and offshored. In reaction, an increasing number of high profile figures – ranging from Bill Gates to Stephen Hawking – have weighed in to the growing public discourse around this.

Jan Rivkin has been co-leading HBS’s US Competitiveness Project since 2011. Having conducted research in areas ranging from infrastructure to the skills gap, the team is now trying to catalyze action in Washington and cities around America. Given this, Jan is well placed to provide his view on automation and globalization’s impact on society and why MBAs must play a role in creating shared prosperity for all.

Will technological progress be a net creator of jobs this century?

To me, the real question is, “Will technological progress be a net creator of good jobs?” Right now, a very small number of people can create and capture a stunning amount of value. Instagram had just 13 employees when Facebook bought it for $1 billion. That’s great for those employees, but will we have enough good jobs and shared prosperity? Figuring out how to change both policies and business practices to address this is a key challenge.

What economic and public policy events have led us to this point?

Staff photo Jon Chase/Harvard News Office

Central to the story is the concept of the commons—that is, the shared resources that society relies on for companies to be productive—for example, public education, workforce skills, and infrastructure. Historically, government and business in America cooperated to build a strong commons.

Then, starting in the 1980s, changes in technology and geopolitics put enormous pressure on middle-class Americans. They found themselves competing with skilled, ambitious workers around the world and automated technology improving at the rate of Moore’s Law. At that point we could have doubled down to make our workers so productive that they could compete with anyone and remain on the frontier of technological change.

Instead, U.S. society made a series of unsustainable promises—for example, to expand credit to the middle class, to maintain the illusion of shared prosperity even as its underpinnings weakened. With the government overextended by those promises and with businesses globally mobile, America invested inadequately in the commons.  With weaker public education, skills, and infrastructure, we entered an era of stagnation for working- and middle-class Americans, even during a golden age for those with the skills to tap global markets with technology.

Technological change and globalization are forces that are not going to abate. But poor investment in the commons is a self-inflicted wound. That we can fix.

Where can private business can have the greatest impact in rebuilding the commons?

Business leaders have lots of opportunities to rebuild the commons even as they build their own companies. These efforts usually involve partnerships with other sectors of society. For example, IBM has partnered with New York City educators to invent a new grades-9-through-14, tech-focused public high school. In Columbus and Minneapolis-Saint Paul, business leaders have created civic alliances that address economic development, workforce skills, infrastructure gaps, and public education. In North Carolina, Siemen’s energy division has partnered with Central Piedmont Community College to help train the advanced manufacturing workers they’d love to hire.

It’s just not right that in prosperous cities, kids are growing up with no path to participate in that prosperity. In South Seattle, for example, kids see rapid growth all around them, but they are stuck in an education system where they won’t get the skills to go off to Amazon or Microsoft or a tech startup.

How can HBS students and graduates play a role in broadening value creation?

All of these problems can be opportunities for enterprising Harvard MBA students. For example, many people are taking on lots of student debt to get educational degrees that won’t yield good jobs. Surely some clever start-up is going to figure out a way to get good demand information into the marketplace so that people disproportionately invest in the education that will get them good jobs.

More broadly, we need a change in the business culture, and HBS MBAs can lead that change. The change begins with the next generation of leaders realizing that the tragedy of the commons will become their tragedy if they don’t fix it. It continues with those leaders understanding that their companies cannot thrive in the long run if the communities in which they operate are struggling. Students therefore need to reimagine business’ role in society and devote themselves to pursuing shared value and broad prosperity.

Since so many opportunities to rebuild the commons involve cross-sector partnerships, I urge MBAs to get to know how governments, nonprofits, and educational institutions work.  And do it early in your careers.  Many MBA graduates think, “I’ll learn, then earn, then return (that is, give back to society).” But young HBS alums can “earn” and “return” at the same time. In fact, getting involved in, say, the board of a local nonprofit is one of the most self-serving things a young MBA grad can do. Those boards, first, are dying for young talent, and, second, are full of all the businesspeople you would like to get to know.

We sometimes assume that the way our capitalist system currently works is God-given and will never change. But a democracy without shared prosperity is a fragile thing: the economic system will change, the democracy will give way, or both. HBS MBAs shouldn’t just stand by and watch those changes happen.  They should help shape the change.

Beth Peters (MBA ’18, Section F) is originally from London, where she she worked in consulting prior to HBS.