Looking at new year ahead, and at a key knowledge co-creation event from a few years back

In 2015, as editor of the Review of Financial Studies (RFS), I became part of a serendipitous knowledge co-creation event to address the unmet need for scholarship on climate finance.

Governments, corporate officers, investors, asset owners, market regulators and business and management scholars were working to address their commitments to progress toward the Paris Agreement goal of keeping global warming to below 2 degrees Celsius. They needed the scholarly community to provide research, but none was being published because none was being submitted. Prodded by world leaders (you can read that story here) to address this “inconvenient void” (our tongue-in-cheek term for the absent research), I and my fellow RFS editors worked with our professional community to create an adapted research protocol and new avenues of support for early career scholars and their institutions in the pursuit of information so desperately needed.

How did we do that? We built upon earlier research, particularly inspired by Nobel laureate Lin Ostrom, who shaped “co-production” (in her seminal 1996 work) as a line of reasoning on social learning from the field of ecological economics. Emphasis is on the importance of cooperation and mutual monitoring of agreed-upon rules among competing individuals as the way of solving ourselves out of a problem. We worked together to create an adapted but still-rigorous research submission and evaluation model.

This was clearly knowledge co-creation at work. When the work is so acutely necessary and dedicated in its inspiration, discipline, courage, and innovation, I submit that we can call it “wicked.” This was a wicked knowledge co-creation event, as it applied expertise, transparency, and careful innovation to create the first body of research on climate finance. The challenge remains. As I write, the story unfolds from COP28 in the United Arab Emirates about the triad of new climate commitments on oil & gas decarbonization, on renewable energy generation, and on energy efficiency.

Time for another knowledge co-creation event?

I wonder now if we need another wicked knowledge co-creation event for an equally-wicked societal problem – namely, one circling around education, COVID, economics, and the workforce.

In the past two years, we’ve seen a considerable amount of research published in top economics and management journals about the economic consequences of the pandemic. From a university perspective, however, I wonder if we won’t find the pandemic’s most consequential economic effects to be on education. This December 5, 2023 Financial Times piece by Amy Borrett offers data on schools within OECD (Organization for Economic Co-operation and Development) countries, revealing in compelling detail some of the pandemic’s effects on systems which had been functioning well, and on those which had been less strong.

Trends that had begun before the pandemic were then “reinforced” by it. OECD contrasted 2018 measurements with 2022 measures of elementary and secondary school student performances in math, reading, and science, with less severe learning losses in developing economies. Interestingly: the more developed economies experienced the greatest negative impact. The 11% drop in average scores in reading is shocking, but not as shocking as the 17% drop in average math scores. “The world is no longer divided between rich and well-educated countries and poor and badly-educated countries,” OECD’s education director Andreas Schleicher is quoted as saying. The most resilient education systems, despite school closures, were in Singapore, South Korea, and Japan.

Since the pandemic, factors like the overall level of education investment, teacher pay and status, and student academic expectations – concrete reflections of community values and engagement — have all influenced educational outcomes and are at least as valuable as financial investment. Countries in which teachers are not supported with negotiated pay, work-life balance initiatives, and professional development do not appear to retain educators, and the ensuing teacher strain and shortages directly hamper student mental health and learning. Schleicher says he sees a “commodification” influence in western education, with concomitant declines in learning. Student scores are highest in countries where teaching is a high-status profession, a perspective found more often in the developing nations than in those generally considered advanced.

In terms of economics and educational attainment, the level of disruption may take years to mitigate, and before we do, our labor force will exhibit the effects. It will be our job as business educators to anticipate and address these issues.

Not surprisingly, a number of our faculty have stepped up to study the aftermath of the COVID-19 event. One favorite is by Professor Murillo Campello in his 2022 Journal of Financial Economics publication, “Corporate flexibility in a time of crisis” (with Duke’s John Barry, John Graham and Chicago Booth’s Yueran Ma). Murillo and team survey CFOs to understand the importance of corporate flexibility through the stress of COVID where they raised a lot of cash to prevent distress. One of the big findings in uncovering their internal plans was the importance of workplace flexibility in allowing employees to work remotely, toward determining employment plans during the crisis. Professor David Just published a study on the impact of COVID-19 on food banks (published in Choices, with Anne Byrne), so critical, given how increased food insecurity undoubtedly stemmed from lockdown restrictions and associated economic fallout. There is a fascinating figure in the study showing a massive spike in online interest in searches for food assistance during the pandemic and how unemployment by region was a strong predictor of search interest, more so than COVID-19 case numbers themselves. Professor Mike Maffie published a study showing how COVID-19 was a union organizing catalyst in a survey of 240 ride-hail drivers. He calls this phenomenon “the global ‘hot shop’.”

See my post-script for some other examples of our faculty’s wicked knowledge co-creation in addressing the effects of COVID on the workings of our society.

Serendipitous knowledge co-creation with our partners in China

In November, I had the privilege of visiting two of our Chinese partner schools to engage in discussion with the academic leadership, to meet with faculty teams, to explore program development and course design, and to celebrate the ongoing dedication and collaborative spirit of both schools. It is gratifying to shape the future of MBA education through international collaboration!

Dean Qiao Liu and all our kind hosts at Guanghua School of Management, Peking University hosted a wonderful visit with faculty, staff, and students. We partner with them in our dual-degree Cornell-Peking MMH/MBA Program with the Cornell Peter and Stephanie Nolan School of Hotel Administration. Excellent students, committed to advancing hospitality and services management leadership around the world.
I was especially impressed by the high-energy audience who joined for the talk on my favorite topic, biodiversity finance. This is the next grand challenge for sustainable finance, as the risk pricing related to biodiversity loss is in grave need of informed framing. (My colleague John Tobin and I lay out one framework with open research questions for financial economists, in this paper.)

The standing-room-only audience was full of ideas about new economic incentives, private entrepreneurs investing in biodiversity, the roles of government vs. private markets, and the importance of interdisciplinary collaboration and responsible research in addressing global challenges like this one. This is a topic that commands the attention of all in financial services today, and these people were clearly ready to commit to next steps!

My biodiversity finance talk went equally well at Tsinghua PBCSF 清华五道口, with whom we collaborate on a dual degree MBA with PBC School of Finance leadership. The audience engaged in good discussion and debate. Thank you to Dr. Gu Liangfei, Chairperson of the School’s Council, for a wonderful lunch conversation, to Associate Dean Zhang Xiaoyan for moderating the talk, and to all the wonderful faculty, students, and staff who attended. This dual-degree partnership between the PBCSF and our Cornell SC Johnson College of Business coming up on its 10th anniversary very soon.

I also had excellent opportunities to connect with alumni in Beijing, my first such visit since the pandemic, along with my colleagues Dean Rachel Dunifon (College of Human Ecology) and Vice Provost for International Affairs Wendy Wolford. Wendy moderated our panel conversation on a variety of topics about Cornell, including the impact of generative AI on education, innovations in research and technology for sustainability, and advances in health and global development.

How do we create long-term success, and how do we measure it?

No doubt the wickedest challenge before us is the harnessing of good will and good sense in service to our world’s immense needs. As it was for climate solutions in my RFS initiative in 2016, so it must be for our diversity, equity, and inclusion initiatives. We need all hands-on-deck, especially when the needs are so acute and the challenges so many.

With this in mind, our college hosted two roundtable discussions this fall. One was a November 1 gathering of corporate diversity, equity, and belonging leaders, and another, larger event one month later with the deans of 34 business schools along with their DEIB associate deans. I’m so grateful for my able partner and our college’s Associate Dean for Diversity, Inclusion, and Belonging Michelle Duguid and the key directors, Victor Younger, Jenn Majka, Nicole LaFave, and Patty Gabriel, who all worked so tirelessly to make these two gatherings come to life.

In closed-door confidential convenings, the corporate leaders brought us their specific challenges and the efforts they’re developing to address them. Great strides are being made to make the most of existing talents and to encourage talent pools which have not been completely tapped. These companies went on to remind us that they recruit and hire our students, and they exhorted us to be sure that people trained to see themselves as future leaders must be able to hear all sides of an issue and to leave partisan opinions out of the workplace. One month later, imagine the stirring effect of having one of these global HR heads speak directly to these academic leaders, describing a particularly challenging current stream of rhetoric and inciting us to do better.

Every one of these educators rolled up their sleeves. It was a marvelous thing to be a part of. The group developed a slate of shared goals and commitments, and we plan to meet again. One of our main conclusions is that, in the pursuit of fair and full talent recruitment, all of an institution’s hands must be on-deck. The entire college community must be aware of our partnerships with the PhD Project, Forté, and The Consortium. When we share awareness about these investments on campus, we will build a pipeline of collegiality and information sharing.

Knowledge co-creation is the best way to mobilize the research talent out there

“Wicked” knowledge co-creation addresses with creative diligence the most acute problems we face. The best data and communications skills must combine to remind all involved of the shared imperative, and to motivate all involved to pursue their own best efforts, to earn the respect of others. The world needs no less than respectful and transparent collaboration.

We’re surrounded by inspired examples of wicked knowledge co-creation. Consider the revised International Sustainability Standards Board (ISSB) climate-related disclosure standards, the US Financial Stability Oversight Council report on Climate Related Finance Risk (in response to President Biden’s Executive Order); and one that I am watching with acute interest, The Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES), which is developing new assessments in 2024 for monitoring biodiversity loss and contributions by and to people. Nature-related and climate-related risks and opportunities affect enterprise values, and financial markets need to assess these.

As the year ends, I wish all a restorative holiday. After resting, reading, connecting, we’ll return. I and my colleagues are committed to applying all of our abilities and resources to the co-creation of solutions.

And I couldn’t leave without mentioning:
• Three of our faculty have been announced as https://news.cornell.edu/stories/2023/11/einhorn-center-announces-new-engaged-faculty-fellows by the Einhorn Center for Community Engagement. Nolan Director of Undergraduate Studies Chris Gaulke, Grand Challenges Faculty Director Sarah Wolfolds, and Grand Challenges Program Manager Lisa Gerber will participate in this yearlong cohort program, working in one of two communities of practice, one for engaged learning, the other for engaged scholarship. Congratulations!

• The Emerging Markets Institute (EMI) held its 10th Annual Conference at the Cornell Tech campus in early November, and was on the same day conferred with an official citation from the New York State Assembly. Praising the EMI as a “thought research leader and educational magnet,” the citation declares EMI to be an “outstanding institution, worthy of the esteem of both the Community and the Great State of New York.”

• Our faculty has achieved a body of collaborative work on the addressing of multi-faceted systems dynamics that combine to bring desired and undesired effects to any situation. Here’s a selection of their research addressing the COVID pandemic’s dynamic challenges.
Aaron Adalja: Survey of Implemented Mitigation Strategies and Further
Needs of the U.S. Food Industry to Control COVID-19 in the Work Environment in Early 2021, in Food Protection Trends (2023).
Sunita Sah: COVID-19: Conspiracies and Collateral Damage vs. Constructive
Critique in The Cognitive Science of Belief: A Multidisciplinary Approach, eds., Musolino, J., Sommer, J., Hemmer, P. (2022)
Mardelle Shepley and Heather Kolakowski: How COVID-19 will Change Health, Hospitality, and Senior Facility Design, in Frontiers in Built
Environment (September 2021)

• In November I traveled to the Universidad de los Andes in Bogota, Colombia, for the 2023 meeting of the UniAndes Business School’s International Advisory Board, which I joined this past March. This group includes a deep bench. I’ve had the privilege to work with Dean Veneta Andonova on the CEMS Strategic Board, and was pleased on this trip to become acquainted with UniAndes’s newly-appointed dean Ximena Rueda, whose research focus addresses the wicked problems of understanding, designing, and implementing private-driven instruments for sustainability.