IMPACT magazine - Issue 11 by Durham University Business School

Wo r ld Eco n o my a n d S o ci e ty / Iss u e 11

The economic impact of terrorism Global imbalances: is sustainability nearly enough? An economist’s post COP26 thoughts

Balanced on a knife edge – will our global economy survive?

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Welcome IMPACT / Issue 11

Welcome to our eleventh issue of IMPACT magazine, which showcases the many ways the Business School’s research and education make a positive impact on society and the world we share.

hange is always with us and 2022 has already seen some significant changes. On a global scale we have witnessed Russia’s invasion of Ukraine, resulting in escalating economic sanctions against Russia. Indeed, economics has been talked about as being weaponised, with Russia threatening to cut off gas and oil supplies to Europe/the West in retaliation for the sanctions imposed on it. And the capture or blockade of Ukraine’s black seaports is compounding a global grain crisis, with many Middle East and African countries who rely on grain imports facing food insecurity with the potential for mass hunger and famine. On an individual level, we’re seeing the return of social norms as many countries relax the Covid-19 restrictions that the pandemic brought. There have also been changes within the Business School which sees me welcoming you to this issue of IMPACT. At the end of March, Professor Susan Hart retired as the School’s Executive Dean after a tremendous six years in charge. I’m honoured to be fulfilling the role of Interim Executive Dean and playing my part in the smooth transition to the leadership of Professor Cathy Cassell who will be taking over at the School on 1 September. With the big economic and planetary changes being forced upon us, it seemed appropriate for this issue of IMPACT magazine to focus on World Economy. At the start of my introduction, I mention the macro-economic effect of the Russian invasion of Ukraine. However, a single terrorist attack can have long-lasting effects on microeconomics as Professor Dimitris Petmezas outlines in his article on the economic impact of

Issue 11 / 2022

terrorism. This is followed by Dr Sara Eugeni’s look at the very real impact a nation’s savers can have on global economics. Perhaps this isn’t a surprise when the nation is China. Dr Eugeni suggests that pension policy changes by the Chinese government could give the postpandemic world economy a muchneeded boost. Elsewhere, we look at the constantly changing world of technology with Dr Ahmed Elsayed’s article examining if cryptocurrencies are a safer investment. The Russian/Ukrainian conflict is having a global economic impact and the sanctions on Russian oil and gas have countries scrambling for alternative sources of energy which have seen talk of a return, if only temporarily, to coal-burning power generation and further gas exploration — at a time which was already classed as critical in the planetary fight against climate change. Dr Laura Marsiliani was at COP26 in Glasgow and she shares her thoughts on the discussions at the time. The remainder of the World Economy section of IMPACT sees a wide range of other articles from the School’s faculty covering everything from how globalisation effects the poorest countries (Dr Michael Nower) to the historic economic policies of Lord Liverpool (Professor Kevin Dowd) and from the benefits and risks of tax breaks for R&D (Professor Christos Tsinopoulos) to the economic considerations of levelling up (Professor Bernd Brandl). As with our previous magazines, issue 11 contains the usual mix of thought leadership articles and research updates together with student and alumni engagement features, plus other School news. Research is the lifeblood of the School and after a delay — due to the pandemic — the UK government’s

Research Excellence Framework (REF) 2021 finally reported in May 2022. I’m delighted to report that all of the School’s submitted research was assessed as worldleading or internationally excellent. Our research has high impact. You can read a review of REF and our research case studies on page 56. However, our determination to make a positive impact on society and the world we share is relentless, so you can see new comments on Sustainability Reporting by Professor Carol Adams. Meanwhile, Dr Zsófia Tóth and Professor Julie Hodges bring two very different ethical considerations into focus – the accountability of artificial intelligence robots for the former and how we build the resilience of our human rights champions in the latter. 2022 has also seen the return of in-person activity. In our engagement section you can read about our overseas study trips – an essential part of an international business school’s education. And in the News and Events section, we celebrate the return of our congregations with a review of the winter graduation through some joyous photographs marking student achievement after a few difficult years for everyone. I would like to thank everyone who has contributed to this eleventh edition of IMPACT. The continued support from our staff and students demonstrates our tremendous collective commitment to generating positive societal impact.

Professor Kieran Fernandes Executive Dean of Durham University Business School

Contents The world economy and society issue Issue 11 / 2022

Credits

The IMPACT Team

An economist’s post COP26 thoughts Dr Laura Marsiliani’s take on the unresolved issues of the climate change conference in Glasgow – and some potential solutions.

Liz Lawrence Senior Marketing Communications Manager Martin Thomas Marketing Communications Manager Lindsay Webber Marketing Relations Manager Sophie Patterson Marketing Communications Officer

Charlotte Wareing Marketing Officer

Is globalisation leaving the poorest countries behind? Dr Michael Nower compares the impact of rising international trade on countries of varied income levels, and how all might benefit.

Paula Lane Marketing Officer Stephen Close Web and Digital Officer Deanne Dutton Conversion Relations Officer Laura Kovic Marketing Administrator

Thank you Thank you to all those who have worked on this issue including faculty, other School staff, students, alumni and business connections.

Contributors Professor Carol Adams Peter Allen Matthew Bainbridge Natasha Boulding Professor Bernd Brandl Dr Atanu Chaudhuri Professor Kevin Dowd Pauline Dowson-Pounder Dr Ahmed Elsayed Dr Sara Eugeni Professor Kieran Fernandes Dr Mariann Hardey Professor Julie Hodges Chloe Holmes Dr Laura Marsiliani Professor Mike Nicholson Dr Michael Nower Professor Dimitris Petmezas Xinghua Tong Dr Zsófia Tóth Professor Christos Tsinopoulos Harshpal Singh Vilku Jamie Weston Professor Sarah Xiao Steven Zwane BlueSky PR

Exploring the circular economy: how giving electronics a new lease of life could also help save the planet Professor Kieran Fernandes discusses how industry can make the most out of resources and extend product lifecycles.

Are cryptocurrency returns affected by monetary policy spillovers? Dr Ahmed Elsayed shares his research into whether virtual currencies are immune to spillovers, making them a valuable asset.

Why ethical use of AI robots must incorporate accountability and moral intensity Dr Zsófia Tóth shares her research into the culpability of stakeholders when artificial intelligence robots enter the workplace.

A research environment supporting excellence – case studies from the Research Excellence Framework (REF) 2021 We give an overview of our academics’ excellent research on important topics across Accounting, Economics, Finance, Management and Marketing.

Durham University Business School / IMPACT

World Economy 06 The economic impact of terrorism The long-lasting effects acts of terrorism have on local economies 08 Global imbalances: is sustainability nearly enough? Current account imbalances are growing – Dr Sara Eugeni looks into why 10 An economist’s post COP26 thoughts Dr Laura Marsiliani reflects on the issues still being hotly debated 12 Are cryptocurrency returns affected by monetary policy spillovers? How cryptocurrencies could be a less volatile investment 14 Blockchain could be key to improving sustainable practices in the supply chain Can new technologies help businesses create more ethical supply chains? 16 Is globalisation leaving the poorest countries behind? The rise of international trade benefits some more than others 18 Exploring the circular economy: how giving electronics a new lease of life could also help save the planet Helping industry make smarter, more sustainable decisions 21 The economic policies of Lord Liverpool A look back on the feats of an influential UK prime minister

22 Risky business? Why firms should be aware of the consequences of tax benefits for R&D Do they hinder more than they help? 24 Levelling up will take years, be costly and likely cause job losses if not carefully prepared and managed Continuing our look at postBrexit Britain’s prospects

Society 26 Follow back? Dr Mariann Hardey reflects on Elon Musk’s ‘democratic’ interest in Twitter 29 Why ethical use of AI robots must incorporate accountability and moral intensity Who takes responsibility for AI robots’ mistakes? 32 Can you control your impulses? Can someone else? The latest in consumer behavioural profiling 34 A Q&A with Executive Education Director Christos Tsinopoulos His approach to developing future leaders 37 How long can USS members expect to live? The life expectancy of academic staff versus their pensions funds 38 Who cares about corporate greenwashing? How sustainability reporting is changing A critical look at who keeps organisations accountable 41 Helping human rights champions to change and develop A new framework for National Human Rights Institutions

Engagement 42 Natasha Boulding: Building a new future PhD students transforming the construction industry 45 Using artificial intelligence to improve efficiency in the aviation industry MBA (Full-time) student Harshpal Singh Vilku shares his Strategic Business Project 48 Inspired and continuous learning Why entrepreneur Steven Zwane returned to Durham for his DBA 49 My Durham Masters: football, finance and the global economy Alunmus Matthew Bainbridge shares his story 50 The return of in-person international study tours Opportunities to visit companies abroard for postgraduate students 52 An unforgettable experience in Stockholm Masters student Xinghua Tong reflects on her study trip

News and events 54 Business School and MBA rankings stay strong Celebrating success across three key global rankings 56 A research environment supporting excellence – case studies from the Research Excellence Framework (REF) 2021 Read more on our academics’ achievements in research 60 The return of celebrating congregation in person! Photos and stories from our recent graduates 62 Our events Visits from world-class scholars and a long-awaited reunion

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Issue 11 / 2022

World Economy

The economic impact of terrorism Do acts of terrorism affect the mergers and acquisitions of companies nearby? According to a recent study by Professor Dimitris Petmezas, such events bring deals to a halt and repercussions can last for up to two years, significantly damaging local economies…

e hear repeatedly from business gurus, economic experts and other industry advisers that to succeed in an increasingly unpredictable, volatile, global market, we need to boost our resilience. We need to be flexible and prepared for shock. But whilst governments and national bodies can build some defences for when the unexpected occurs, at a local level, it can be harder to overcome. When such unpredictable, damaging and shocking acts like terrorism occur, the consequences can extend beyond the tragic loss of life and damage to a community. It, understandably, takes time for people to recover emotionally, and areas impacted to recover visibly. However, there can also be farreaching consequences when it comes to the recovery of the local economy — and not just for those businesses that are directly impacted by such events happening on their doorsteps.

We can all agree that it's entirely human, and unquestioningly understandable that nobody in their right mind would choose to place themselves within striking distance of a dangerous situation — figuratively or literally. When such events occur, as well as those living and working in an area suffering as a result, the disruption is felt further as businesses and investors seek to distance themselves from the danger. What are the wider impacts of such deliberate distancing? My study, conducted alongside colleagues from Manchester Alliance Business School and Surrey Business School, sought to explore how exogenous shocks such as terrorist attacks can impact the business economy at a local level due to the uncertainty they leave in their wake. Most importantly, we sought to understand to what extent such shocks are felt and for how long after an event occurs.

Durham University Business School / IMPACT

To conduct our research, we gathered data from a number of sources. First, we reviewed the M&A (Mergers and Acquisitions) activity of firms located in and around the locations of a sample of terrorist attacks across the USA that were heavily covered by media over a twenty year period — between 1995 and 2015. Then, to gain an insight into the scale of local level impact, we also utilised Metropolitan Statistical Area (MSA) data, which holds information on regions that consist of a city and surrounding communities linked by social and economic factors. Finally, we used physical distance to measure each firm’s geographic proximity from the attack locations for each event. To build a framework for such events, we also rated the severity of each terrorist attack by considering the number of human casualties involved. In doing so, some troubling findings were revealed… Whilst an immediate negative impact of such shocks was to be expected, our study revealed several harmful consequences for firms located near terrorism-stricken areas when it came to their long-term M&A prospects. Firstly, we saw that such firms become significantly less attractive to potential acquirers and, as a result, were less likely to receive an acquisition bid. Not only that, but the impact was also shown to last for as long as two years after the incident occurred. In a further blow, firms which had deals on the table before an attack occurred were, more often than not, far more likely to have those deals withdrawn in the weeks afterwards. The overall result was a significant hit to the local economy — a further complication on top of an already difficult situation. Whilst there was some argument to be made for investors securing lower-priced acquisitions as a result of such events, or for a “bargain” becoming a more desirable option to potential investors, our findings didn’t support this perspective. Instead, we witnessed that acts of terrorism prompted acquiring firms to show their preference for cross-MSA targets, or targets located further away from where the acquirers were located. This supports the growing idea that target firms located in areas subject to a terrorist attack become less attractive as a result.

And for those few firms which did manage to secure deals? Our research revealed they did indeed receive a lower acquisition premium, leaving them with less bargaining power and less benefit when acquisitions did occur. Our study saw how this also translated into lower target firm stock returns and lower overall acquisition synergies. As well as the significant hit to local economies in regard to their value and profitability, a combined impact of business struggles and the root cause of such difficulties also often resulted in decreased productivity, demotivated or uncommitted workers and a loss of human capital. Bringing the problem full-circle, the loss of talent can potentially stoke the flames of terrorism-induced uncertainty, as labour productivity in firms located in terrorism-stricken areas decreases, further increasing the real option value to delay or reduce the value of M&A investments. With such worrying findings, it’s important to remember there are lessons to be learned — not only by heads of industry when it comes to deciding how to staff, market, and protect their organisations, but beyond that to local and national governments and policymakers. Apart from the impact of terrorism on target firm’s labor productivity, our results also suggest that personal uncertainty and fear affect the acquirer-CEO’s bid decisions. They also uncover a negative link between terrorism intensity and acquisition premium offered, which becomes more pronounced when the acquirer-CEO is more risk averse or when target firms are more human capital dependent. For policymakers to combat this, greater consideration and expenditures on public security and local-level investment should also be considered to give companies a firmer grounding to bounce back.

Our study revealed several harmful consequences for firms located near terrorism-stricken areas when it came to their long-term M&A prospects.

For more information in Professor Petmezas and his research interests, visit durham.ac.uk/business/dimitris-petmezas

It's important to remember there are lessons to be learned not only by head of industry...but beyond that to local and national governments and policymakers.

Issue 11 / 2022

World Economy

Global imbalances: is sustainability nearly enough? Dr Sara Eugeni examines the factors behind current account imbalances around the world.

he unprecedented fiscal stimulus that took place in many advanced economies as a response to the pandemic has once again led to the widening of global current account imbalances, according to the International Monetary Fund’s (IMF) latest External Sector Report. Despite households’ savings having risen due to heightened economic uncertainty, this hasn’t compensated for the fall in public saving. As public debt has reached the highest level in several decades, advanced economies’ reliance on foreign borrowing has increased. The UK’s current account balance, for example, went from -3.1% of GDP in 2019 to -3.5% in 2020 and is projected to reach -3.9% in 2021. The global financial crisis of 2007-2008, and other crises around the world, taught us that large current account deficits are often a signal of economic distress. Excess levels of foreign borrowing can precede an economic crisis and/or can make economies vulnerable to sudden stops and reversals of capital flows. Nowadays, we’re in a much better place when it comes to evaluating the sustainability of a country’s external position. In 2012, the IMF introduced the External Balance Assessment framework aiming to assess external positions by comparing an economy’s actual current account balance with a current account norm. The current account norm is determined by estimating the level of current account that’s consistent with the country’s economic fundamentals. In case the actual current account is weaker or stronger than the norm, the IMF provides policy recommendations to reduce the current account gap. For example, if a country’s in deficit and the IMF estimates that the deficit should be smaller, this could signal that an economy’s receiving an excess of capital flows, e.g. for speculative reasons.

My work has contributed to a line of research that identified demographic factors as being a key determinant of a country’s current account balance. My paper titled ‘An overlapping generations (OLG) model of global imbalances’ has been cited as one of the papers that led IMF researchers to rethink and update their methodology by including demographic variables in the estimation of the current account norm. The paper highlighted that one of the main reasons for the persistent current account imbalances between the US and China is that the latter lacks a comprehensive pay-as-you go pension system. Many Chinese citizens aren’t covered by a state pension and, when they are, the extent of the coverage varies across provinces. Chinese citizens then need to save more than Americans to fund their retirement. As domestic savings are much higher than what’s needed to fund domestic investment, this results in a current account surplus. I backed the importance of this mechanism with some empirical analysis showing that countries with a higher percentage of the working population covered by a pay-as-youearn-system are more likely to have lower savings and current account balances. The inclusion of demographic variables into the IMF model is a welcome development, as the body of literature providing evidence that they’re important drivers of current account balances is growing.

Crises around the world taught us that large current account deficits are often a signal of economic distress.

Durham University Business School / IMPACT

My analysis implies that at least part of the persistent current account deficits run by the US and other advanced economies over the past 30 years are sustainable. This is because they’re funded by a high level of savings in the world economy due to China’s different economic fundamentals. However, the IMF still recommends that China “shifts policy support toward strengthening social safety nets to reduce high household saving”. In fact, while sustainability is an important concept, the low real interest rates world in which we live in is an undesirable state of affairs. As Ben Bernanke claimed in 2005, the “global saving glut” has led to a decline in real interest rates around the world. Although China might be saving within the norm, my paper shows that policies that improve the Chinese pension system wouldn’t just reduce the imbalances but also ensure that people enjoy a higher standard of living through higher consumption.

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In another paper, I compare the current situation with the patterns of international borrowing and lending during the first wave of financial globalisation (1870-1914). At the time, the UK was in China’s shoes as the world economy’s main lender. However, differently to China, the UK received high interest payments on its foreign loans which allowed it to run a trade deficit by consuming more than it produced. An improved coverage to the Chinese pension would boost consumer spending, which could be beneficial for the world economy as a whole. However, as real interest rates would increase, the US and the UK would need to stop relying on cheap borrowing from China and live more off their own means by starting a potentially painful process of fiscal consolidation. For more information about Dr Eugeni and her research interests, visit durham.ac.uk/business/sara-eugeni

World Economy

An economist’s post COP26 thoughts

OP26 negotiations closed on 13 November 2021 yet pledges remained unfulfilled, with the removal of fossil fuel subsidies and finance for loss and damage still hotly debated. They’re also where the ‘Global North-South divide’ has been most acute. Typically, least developed countries (LDCs) fear that development and poverty alleviation would be hindered if fossil fuels were excluded from the energy generation mix. The lastminute intervention at COP26 of some LDCs negotiators, led by India and China, demonstrated this concern. The phrase ‘coal phase-out’ was ultimately changed into ‘coal phase-down’, leading to COP26 President Alok Sharma’s apologetic, emotional speech at the conclusive plenary session. As an economist I appreciate these issues, but I also wonder at the persistence and impact of economic systems riddled with fundamental inefficiencies that delay progress and prosperity. Energy markets often suffer from heavy subsidisation of fossil fuels and government regulated electricity prices. These market distortions prevent the optimisation of the fuel mix in electricity production, promote overconsumption of fossil fuels and ultimately delay transition towards sustainable development.

Dr Laura Marsiliani, Associate Professor of Economics shares her thoughts on COP26 in Glasgow and what lessons we can bring to COP27.

Take the case of Bangladesh. At COP26, Bangladesh led the negotiations for the Climate Vulnerable Forum (CVF), a group of 48 countries facing high disaster risk from climate change. The CVF strongly advocate actions to limit the rise in global average temperatures to 1.5°C degrees above pre-industrial times, in line with the 2015 Paris Agreement. Bangladesh has pledged to reduce greenhouse gas (GHG) emissions by 15% (of which 5% is unconditional to any transfers from the global community) with respect to Business as Usual by 2030 and renewed this commitment at COP26. However, its overall CO2 emissions have risen dramatically in the last ten years, mainly due to an increasing reliance on oil (currently accounting for more than 30% of Bangladesh’s electricity generation). In addition, plans to step up the use of domestically sourced coal and waste-to-energy are under discussion. Given its dependence on fossil fuels and carbonintensive technology, will Bangladesh succeed in fulfilling its Paris Agreement pledge?

Durham University Business School / IMPACT

These market distortions prevent the optimisation of fuel mix in electricity production, promote overconsumption of fossil fuels and ultimately delay transition towards sustainable development.

Recent research by economists at Durham University Business School, Durham Energy Institute, NorthSouth University Bangladesh, and Copenhagen Business School has evaluated the effects of several decarbonisation policies in Bangladesh, namely the removal of intra-sectoral electricity price distortions (including implicit fossil fuels subsidies) and the implementation of carbon taxes. We’ve seen that a move towards liberalised energy markets can create a win-win situation by improving economic performance and reducing CO2 emissions by 4.6%, helping Bangladesh achieve its target. Interestingly, eliminating energy price distortions trumps carbon taxes, although a policy package that includes all decarbonisation methods can deliver even higher reductions in CO2. These lessons hold for any country with a fixed price system for energy in place. It’s hoped that COP27 will give more attention to energy

A move towards liberalised energy markets can create a win-win situation by improving economic performance and reducing CO2 emissions.

Issue 11 / 2022

price distortions for an effective decarbonisation agenda in LDCs. Another contentious issue that emerged was liability and compensation for loss and damage caused by historical greenhouse gas emissions from developed countries. In the policy debate, the word ‘compensation’ has often been substituted with the term ‘solidarity’, as legal liability is hard to determine when it comes to climate change. From an economist’s point of view, the debate is further complicated by the implications of the work of Economics Nobel Laureate Ronald Coase which argues that compensating victims of environmental damage may create the perverse incentive to not protect oneself from further damages for the sake of compensation. Would loss and damage finance translate into more misery for vulnerable communities? It’s a tough road ahead to COP27.

For further information about Dr Marsiliani, Co-Director Centre for Environmental and Energy Economics (CE3) and Fellow of the Durham Energy Institute (DEI) and her research interests, visit durham.ac.uk/business/laura-marsiliani

World Economy

Are cryptocurrency returns affected by monetary policy spillovers? As international monetary policy spillovers become more commonplace, is cryptocurrency a safer investment? Dr Ahmed Elsayed, Associate Professor in Economics and Finance, investigates.

n the aftermath of the global financial crisis, central banks in both developed countries and emerging market economies have deployed a series of unconventional monetary policies, whereby the expansion of the monetary authority's own balance sheet is used to support economic activity and promote higher inflation. These large-scale national policies were quickly transmitted across jurisdictions and a global surge in liquidity was witnessed. Not surprisingly, international monetary policy spillovers became particularly relevant, posing challenges for policymakers. Thus, understanding their nature and size is crucial. Spillovers are when an economic event in one country has a ripple effect on the economy of another, usually more dependent country, for example a stock market downturn. Though monetary policy spillovers are incredibly common in today’s economy, and the majority of investments are easily impacted by changes in central banks’ monetary policies. The emergence of cryptocurrencies in recent years could provide an investment opportunity that may be unaffected by these spillovers — at least that’s what we’ve been researching.

Cryptocurrencies are unique, as they don’t generate cash flows. These virtual currencies rely on decentralised control and require no third-party involvement, being independent of central banks and governments, despite counting on regulated financial institutions to operate. Thus, in contrast with traditional assets (e.g. bonds, commodities and equities), the standard transmission channels of monetary policy don’t apply in the absence of intrinsic cash flows for investors to discount for or to form expectations about. Despite this, the empirical evidence on the link between monetary policy and cryptocurrency returns is rather limited and inconclusive. This is why I, along with my colleague, Professor Ricardo Sousa of the University of Minho, decided to comprehensively research the impact of monetary spillovers on cryptocurrencies. In order to understand the dynamic and spillover effects of leading countries’ international monetary policies on the cryptocurrency market — and whether or not they were affected in the same way as other financial traditional assets — we used daily data on shadow policy rates (indicators of monetary policy actions) for four major economies: the Eurozone, Japan, the UK and the US. We then used daily closing price data on three key cryptocurrencies, Bitcoin, Litecoin and Ripple, to determine whether these monetary policy changes had an impact on cryptocurrency returns.

Durham University Business School / IMPACT

From conducting the research, we found that cryptocurrency returns are immune to spillovers caused by changing international monetary policies, meaning cryptocurrencies may offer diversification benefits as a digital asset. We also found that interconnectedness between cryptocurrency returns and monetary policy spillovers were particularly large when shadow policy rates became negative, moderated during the Fed's ‘tapering process’, and sharpened again more recently as cryptocurrency buoyancy returned. However, we did find strong interconnectedness between cryptocurrencies, with returns correlating as both high and positive for all cryptocurrencies reviewed. Shadow short-rates and cryptocurrency returns also typically had a low correlation, which tends to be negative, suggesting that monetary policy tightening has a negative effect on cryptocurrency returns. In a low interest rate environment, investors tend to ‘search for yield’, which again reinforces the view of some diversification gains provided by cryptocurrencies in addition to portfolios consisting of alternative and conventional assets. As previously mentioned, central banks around the world deployed unconventional monetary policies after the global financial crisis, with international monetary policy spillovers posing challenges for policymakers. Our research suggests cryptocurrencies are a less volatile asset when it comes to these spillovers.

Issue 11 / 2022

Our research suggests cryptocurrencies are a less volatile asset when it comes to these spillovers.

This research supports the view of a somewhat low monetary policy synchronisation in recent years, as economic growth geared at different speeds across jurisdictions. Thus, the US is generally a net transmitter of shocks, while the Eurozone and the UK are both net transmitters and receivers. As for cryptocurrencies, Bitcoin and Litecoin are net transmitters of shocks, while Ripple is a net receiver. These findings of strong international monetary spillovers pose challenges for national authorities, reinforcing the importance of policy coordination. The research suggests setting up a global level playing field to avoid regulatory arbitrage and deter any potential financial instability that might be attributed to sharp shifts in capital flows associated with portfolio reallocations into and away from the cryptocurrency space. For more information about Dr Elsayed and his research interests, visit durham.ac.uk/business/ahmed-elsayed

World Economy

Blockchain could be key to improving sustainable practices in the supply chain How can new technologies help businesses better their supply chains? Associate Professor Dr Atanu Chaudhuri shares why blockchain may be the answer.

he theme of this year’s much delayed but vitally important World Economic Forum (WEF) in Davos was ‘History at a Turning Point: Government Policies and Business Strategies’. The event, which gathered more than 2,500 leaders from across global politics, industry, civic society, academia, arts and the media, placed a steady focus on two critical messages. One: There’s no more time to delay — to have any chance at meeting any of the 17 sustainable development goals (SDGs) by 2030, we must act now to reduce the impact our very existence has on our societies and ecosystems. Two: To be effective in our goals, the responsibility to take action must go beyond global governments and authorities to be shouldered by our industries, large and small. Businesses must be fully aware of how their operations affect the world around them and actively work to both lessen their footprint and work for the benefit of all. Regarding the second point, it’s well understood that this is easier said than done. Besides the additional strain of the past two years as the pandemic has upended typical business practice, researching and investing in sustainable business practices can be an unpredictable, costly and potentially ineffective activity. However, it could also be argued that our industries have never had more tools at their disposal to make the seemingly impossible happen. The advancements in new, smart, technologies have not only helped businesses significantly increase their capabilities and output, but at a fraction of the cost and a greater speed than a fully human workforce could achieve.

These tools, which have so far mainly been used to provide better customer service, shape more effective products, and amass a greater profit, can also be used in a variety of ways to help organisations to review their practices, identify areas for concern, and make reliable predictions for the effectiveness of new practices. A key example of this, as identified by my own research, can be found in the application of blockchain technology in improving supply chains. It reveals how the technology can act as an enabler for improving social sustainability, increasing transparency and eliminating risks, and enabling companies to act in a more ethical manner. Often, global supply chains are subject to fraud, counterfeit products, child labour, and the risk of low quality. Worryingly, many of these issues can occur without the company at the end of the chain having any knowledge of them. And yet, they must be accountable for how their supply chains operate. The study, conducted with my colleague Professor Kieran Fernandes alongside Coventry University, Toulouse Business School and the Turkish German University, investigates how blockchain can be deployed to help companies become more vigilant about how their practices impact the world around them at every level, and reduce the potential risks they might face from unethical activities in the supply chain that they may be unaware of. In an age where it’s not only government bodies that are calling on industries to act more consciously and become more accountable, but

It’s never been more important for organisations to prioritise working for good as well as for profit.

Durham University Business School / IMPACT

also an increasingly socially aware customer base, blockchain provides companies with the ability to alleviate the above challenges. This is because the traceability that comes through blockchain use can ensure that fair practices are followed at every stage, thus minimising risk. To uncover our findings, interviews were conducted with the co-founders and CEOs of service providers providing blockchain solutions in diverse industries such as: coffee production, aviation spare parts, shipping fuel, and recycled plastics for consumer goods industries. The interview stage was a vital step in our work as it provided a first-hand perspective of how blockchain implementation was improving social sustainability and reducing risk in the supply chain. Then, to support these perspectives, we sourced additional information and evidence from the companies involved, concerning their operational practices and output. Whilst the responses we received from our initial investigations painted an initially rosy picture, there were a few key concerns identified which, if left unchallenged, could pose a significant hurdle to improving sustainability. While attempting to source examples of those who had successfully implemented blockchain to their supply chains, we found that the majority of service providers faced multiple challenges in doing so. As always when it comes to implementing new technology, the issues didn’t stem from the technology’s capability but rather the understanding of those attempting to harness it. The lack of understanding of the mechanisms needed for blockchain implementation to improve sustainability and risk management in supply chains meant that, for many, implementation will fail to live up to its promise. So how can we overcome such challenges? WEF has made it clear that we’re no longer in a position to wait. Action must be taken immediately.

To that end, my research colleagues and I identified a number of steps that blockchain service providers can take to ensure the companies who use their services can fully understand how to best adopt and integrate them. Developing user-friendly interfaces, customised secure digital payment systems, and easily accessible technical support for suppliers are all simple but vital actions which would go a long way to ensure stakeholders across the supply chain can engage effectively. Furthermore, applying local-level knowledge and building relationships facilitates smoother adoption of the technology. And, when it works, there are multiple benefits. As well as company owners being more assured that their operations are efficient, sustainable and resilient, there are the added bonuses of being able to act for the greater good. By using blockchain, firms can also better mitigate supply chain risks at lower costs when compared to a traditional supply chain, where firms tend to hold higher stocks of inventory at an excessive capacity to compensate for possible disruptions along the line. As blockchain enables businesses to track and trace the complete movement of raw materials and products throughout the supply chain, it can help companies identify not only questionable practices but potential risks to progress and plan accordingly. The SDGs were established seven years ago, and we’re now eight years away from the set 2030 deadline — putting us firmly at the halfway mark of our progress. We know that we, as a global society, haven’t yet achieved enough and have a long way to go. It’s never been more important for organisations to prioritise working for good as well as for profit and put in place practices to help them work towards a greater contribution to these global goals. New technologies such as blockchain provide perhaps the first means for doing so that can suit both planet and profit. For more information on Dr Chaudhuri and his research interests, visit durham.ac.uk/business/atanu-chaudhuri

The traceability that comes through blockchain use can ensure that fair practices are followed at every stage.

Issue 11 / 2022

World Economy

Is globalisation leaving the poorest countries behind? As international trade rises, Dr Michael Nower asks, how have countries with varied incomes been impacted differently?

lobalisation, and the associated falls in the costs of trading goods and services internationally, has resulted in an explosion in global trade volumes, rising from 25% of global GDP in 1970 to over 57% in 2018. One of the easiest ways to see the impact of globalisation is through the changing impact of geographical distance on trade. As trading internationally has become cheaper and easier and global shipping costs have fallen, countries have been increasingly trading with others further away from them. However, the question arises whether this impact on trade has been evenly distributed across countries, and if not, if there’s a pattern to these cross-country variations, i.e. have the poorest countries been ‘left behind’? And if they have, what can be done to spread the benefits of globalisation more evenly? Recent research conducted in the Business School can shed some light on this question.

For trade in goods, middle-income countries like China have experienced the largest falls in the impact of distance, trading substantially more with countries that are further away. In contrast, higher-income countries like the UK, and lowerincome countries like Indonesia, have experienced much smaller declines in the impact of distance on their trade in goods. For trade in services, the relationship is different, with the richest countries experiencing the greatest declines in the impact of distance compared to both middle-income and lower-income countries. At face value, these findings suggest that globalisation has indeed left the poorest countries behind. However, to examine the impact of globalisation more deeply, it’s necessary to distinguish changes in the overall impact of distance coming from two sources: (1) changes within each industry and (2) changes coming from the composition of trade. For example: if the UK used the decline in shipping costs to import less furniture from European countries and more from China, this would represent the first source of change. Whereas, if the UK used the decline in shipping costs to trade more car parts back and forth with European countries as part of a more integrated supply chain, this would represent the second source of change.

Durham University Business School / IMPACT

Breaking down the changes examined above, we can again see a sharp contrast between the poorest and the higher-income countries. For middle-income countries, there’s been very little change in the composition of their goods trade, with most of the substantial declines in distance coming from changes within industries. For the poorest countries, a similar pattern emerges, meaning that for them, the impact of globalisation on goods trade can’t be seen either in the composition or in the impact of distance within industries. In contrast, the composition of higher-income countries trade changes substantially. These countries trade more over time in goods industries that are more impacted by distance. They’re also able to take advantage of the declines in international shipping costs to outsource supply chains to nearby countries, resulting in large reductions in the costs of production. One key explanation for why lower-income countries have been unable to take advantage of globalisation is their focus on the production and export of primary products, such as agricultural goods. Over time, these primary products, that they are so dependent on, have remained persistently impacted by distance. For these industries, the impact of distance has barely changed over time despite the falls in global shipping and freight costs. Returning to the original question, we can see clear evidence that the poorest countries have indeed been left behind in trade in both goods and services. Middle-income countries have experienced greater falls in the impact of distance than lower-income countries in both trades, and higher-income countries have experienced the largest falls in the impact of distance on their services trade while being able to more closely integrate their supply chains

Issue 11 / 2022

in goods highly impacted by distance. It's only the lowest income countries that have neither experienced large declines in the impact of distance, nor been able to more closely integrate their supply chains, and therefore have been ‘left behind’ by globalisation. Going forward, if globalisation is One of the easiest ways truly to benefit to see the impact of all countries, globalisation is through then substantial the changing impact improvements of geographical in global trade distance on trade. infrastructure will be needed. For goods, improvements in the capacity of international ports and airports and the expansion of internal transportation infrastructure would be immensely beneficial. For services, the improvements in telecommunications infrastructure that have spilled over to so many other service industries should be expanded dramatically. Alternatively, a structural shift in the lower-income countries, away from primary products that remain unresponsive to globalisation and towards manufacturing would likely bring substantial benefits. If such change is achieved then it will become possible for the benefits of globalisation to expand, and no longer leave the poorest countries behind. For more information on Dr Nower and his research interests, visit durham.ac.uk/business/michael-nower

World Economy

Exploring the circular economy: how giving electronics a new lease of life could also help save the planet

As the UN’s 2030 deadline for meeting SDGs gets ever closer, Professor Kieran Fernandes explains how academic research can help industry make smarter, more sustainable decisions.

or those unfamiliar with the term, Circular Economy (CE) simply describes a model of production and consumption in which we make the most out of as little resource as possible. We share and lease items, we repair and refurbish goods and we recycle unwanted or unfixable materials to make new products, extending their lifecycle for as long as possible and reducing the need for us to further plunder our Earth’s all too finite resources. Understandably the notion of a CE has recently gained significant attention, both in research and practice, due to increasing sustainability concerns. Our world is racing towards the United Nation’s 2030 deadline of meeting its Sustainable Development Goals, and despite having had these goals set for a number of years, we’re still woefully short of the targets set. There’s also now more legislative requirement for some sectors of industry, which have come in as a bid to boost engagement and compliance with more eco-friendly practices. A growing number of businesses want to be seen to be doing the right thing by the planet — whether by governments, trade bodies or associations, potential investors or even customers, who are becoming increasingly aware of how their lifestyles and purchasing habits impact the world around them.

While the concept of a circular economy is no doubt a benefit to the planet, it’s not as simple to put the idea into action. As well as environmental considerations, we must also consider the economic factors for industry. For all their planet-saving positives, it can often be much more costly and time-consuming for companies to act in a responsible or more considerate manner — particularly if it poses significant risk to financial stability. In enabling industry and society to tackle some of the most pressing and confounding problems, it often falls to the researchers, analysts and exploratory thinkers housed within universities and think tanks to provide solutions, new approaches and evidence to help prompt change. However, in the fight for the adoption of CE by industry around the world, despite extensive research having been undertaken in this area, there’s a gap when it comes to both the development of decision-making models for managers and manufacturers which may consider the life-cycle span of product returns, and the selection of an appropriate reprocessing option for value reclamation. My own research, completed in collaboration with colleagues at the Indian Institute of Management, Huddersfield Business School and the University of Warwick, has contributed to filling this gap. Our work explored the possibilities of developing an effective CE within the Indian electronics industry that could benefit customers, organisations and the planet.

Durham University Business School / IMPACT

One of the most challenging aspects in the implementation of a CE is managing product returns from customers and recovering the residual value of unwanted or faulty items through reprocessing them. There are a number of options to take; through resale, repair, refurbishment, cannibalisation, recycling, or disposal of the entire product, or some of its modules, components, and parts. To tackle this, first we developed a comprehensive decision-making model for organisations within the sector to test. The model makes a trade-off between different recovery alternatives while considering a wide range of significant criteria to help organisations to determine the optimal recovery option for their returned products on a case-by-case basis. Most of the existing research until now has been based solely on the cost-benefit analysis of CE and hasn’t focused on additional but vital factors for such decisions, such as a product’s life-cycle, usage duration and other aspects which influence a product return. Secondly, we proposed a twophase mathematical model to help organisations overcome issues related to uncertainty and incomplete information in the decision-making process.

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World Economy

Thirdly, we focused on both action and effect. Our work is one of the first studies in this field which both investigates and compares the implementation of product recovery in CE for short life cycle (SLC) and long life cycle (LLC) electronic product returns. To ensure our work provides directly applicable value for industry we also made sure to validate the industrial applicability of our proposed model by using real-world data collected from the Indian electronics industry. By taking such steps, our results provide managers with a tested, reliable insight into what might be possible if they were to implement a circular economy strategy for their own products, including a focus on repair strategy for SLC returns and on remanufacturing strategy for LLC returns. One of the key implications for managers is that they need to develop different recovery strategies to manage SLC and LLC returns in a CE to ensure the most environmentally and economically sustainable performance. Our results indicate that, in most instances, choosing to repair a product is the optimal recovery strategy for SLC returns which typically have fast value erosion rates, while for LLC returns with slower value erosion rates, remanufacturing is the best-suited option. This particular point is important as there’s often a conflicting paradigm of effectively managing the recovery operations for both SLC and LLC returns whilst also ensuring both economic and environmental benefits.

Additionally, the decisionmaking model also enables managers to make their CE decisions and strategies in a timely manner, which holds multiple benefits. Not only does this ensure swifter recovery and processing of returns, helping to minimise the risk of financial loss, but also decreases the potentially harmful environmental consequences, as reusable materials are made more readily available, decreasing the need to find fresh materials. As a result, another key benefit to be gained is the avoidance of negative societal consequences, such as potential backlash from customers who may boycott a company or its products, or government-imposed penalties if a company is not seen to be doing the right thing. There are important findings to be gained by both shareholders and policy makers who wish to influence the further development of a CE in this sector. By differentiating policies between SLC and LLC returns, they can encourage companies to better appreciate the environmental aspects of a CE rather than solely fixating on costs and potential profits. Offering benefits and support such as subsidies for effective implementation, technical support and even public recognition for their efforts could all serve as motivations to improve their operations. For investors, using such measures to screen and vet potential new projects can also provide organisations with encouragement to implement more ethical practices. The fact of the matter is that, at some point, our world’s resources will run out unless we take action now. And the electronics industry is not the only one which needs to be held accountable for its actions. Only by supporting industry to make better, smarter decisions can we expect change to happen, and this is where academic exploration becomes an invaluable resource. With our study we’re encouraging one industry to take a small but significant step towards a more sustainable future. It’s our hope that, in the not too distant future, many more will follow.

Only by supporting industry to make better, smarter decisions can we expect change to happen.

For more information on Professor Fernandes and his research interests, visit durham.ac.uk/business/kieran-fernandes

Durham University Business School / IMPACT

World Economy

The economic policies of Lord Liverpool Professor Kevin Dowd reflects on the accomplishments of a UK prime minister faced with troubling times.

ear’s Lair journalist Martin Hutchinson and I have a piece by this title in the valedictory issue of the Cato Journal, published by the Cato Institute in Washington DC last autumn. Robert Banks Jenkinson, 2nd Earl of Liverpool (1770–1828) was a (high) Tory UK prime minister over the period 1812–1827. He was prime minister over a turbulent period and had to deal with problems posed by revolutionaries, manage the American and Napoleonic Wars and the disruption that followed the end of those wars. This included the problems posed by Luddite groups opposed to mechanisation, and the 1825 financial crisis, the worst in over a century and which was only to be matched by the recent Global Financial Crisis. His achievements were remarkable: he designed the financial attrition strategy that defeated Napoleon; led the UK through the turbulent takeoff stage of the industrial revolution; inherited a daunting debt/GDP ratio of about 250% and implemented the austerity measures needed to get on the path to later Victorian low debt levels; reformed the currency; abolished income tax; promoted both the Corn Laws and free trade; pushed through the return to the gold standard and legislation establishing the first Savings Banks; successfully managed the 1825 financial crisis; and pushed through subsequent reforms that put the UK banking system onto a stable trajectory that lasted into the late 20th century. His administration set up the conditions for the century of peace and prosperity that followed. Economically, his record is unmatched.

For an administration that’s long been criticised (with some justification: the press was still muzzled, the Bloody Code still on the statute books, and Liverpool opposed Catholic Emancipation) as reactionary, some of its measures were surprisingly progressive. A striking example was the first step in regulating child labour: the Cotton Factories Bill, passed in 1819. This legislation forbade the employment of children younger than 9 in cotton factories and limited their working day to 12 hours until the age of 16. Liverpool’s speech introducing the Second Reading was brief and eloquent. “I highly approve of the Bill and consider it so much a principle of the common law of the land that children should not be overworked, that I desire some words to be introduced into the bill to declare this fact,” he began. “I contend that the children to whom this bill applies are not free agents, . . . nor is there any doubt that such excessive labour is highly injurious to them.” The following day, he reinforced this view: “Is it possible to say that children compelled to labour more than fifteen hours a day are not overworked? What evidence could [negate] that proposition? If all the medical staff of Manchester were brought before the bar to prove it, I would not believe them.” For more on Liverpool, see Martin’s biography Britain’s Greatest Prime Minister: An Examination of Gold Standard Government and my review of it. Martin’s book also includes his own highly unconventional assessment of all the other UK prime ministers from Walpole down, and some of them get an entertaining drubbing. To answer the obvious next question, I tried and tried to get Martin to name the worst UK prime minister, but there was an awful lot of competition for that slot. More information on the book and Lord Liverpool can be found at www.lordliverpool.com For more information on Professor Dowd, his research and publications, visit durham.ac.uk/business/kevin-dowd

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World Economy

Risky business? Why firms should be aware of the consequences of tax benefits for R&D Do firms that secure tax benefits for Research and Development risk hindering innovation thanks to heavy political intervention? Professor Christos Tsinopoulos explains.

t’s hardly a groundbreaking statement to say that, in order to stay competitive in any industry, it’s vital for a business to keep innovating. However, this statement has never been truer than it is now. With the many and varied rapid advancements in digital technologies and their growing impact on the way we live and work, it’s essential that companies are able to take advantage of the latest capabilities they offer. By refusing to settle for the status quo of dayto-day operations and committing to consistently investing in research and development (R&D), companies are often reassured they’ll be able to stay ahead of the competition. Yet, this can be easier said than done – especially for smaller firms. R&D is often an extremely costly exercise which can amount to very little in the way of outcomes unless done correctly. Thankfully organisations don’t always have to go it alone — there are often benefits and support schemes on offer to encourage companies to commit to their R&D efforts. Many such schemes are provided by local and national governments.

Of course, firms innovating and becoming more and more competitive provides a bonus for government too. After all — if the businesses and industries in their locales are providing the most innovative product or service on the market, then not only will these companies’ profits increase, but the government also stands to profit too through tax revenues. Therefore, it seems to make perfect sense for governments to do all they can to help firms become more innovative, such as offering tax benefits for those which agree to invest in R&D. Or does it? While on the surface it seems such schemes provide a win-win for business and government, my research together with PhD candidate Chris Yao, reveals there is a negative to these seemingly rosy partnerships. We found firms that seek out tax benefits for R&D through institutional intermediaries, like professional and membership associations, can risk a lack of innovation because of the large level of political intervention that typically comes with such support. These intermediaries are frequently seen by businesses as a way to gain greater financial support for their projects. Membership to such associations can also help to create legitimacy and firm credibility, something which can be hard to come by when starting R&D from scratch. Moreover, they help those seeking buy-in by potentially unlocking new resources including access to investment funds, which can help provide a bed for innovation to grow from. However, the conflicting demands that can be imposed on R&D by government links can blur a firm’s strategy, impact their vision and, as a result, restrict their ability to experiment and innovate rather than enhance it.

Durham University Business School / IMPACT

Our findings were discovered through interviewing the CEOs of nine separate firms in China and analysing data from a survey of 548 firms on their links to government funding. We then used the successful or failed patenting by these companies as a proxy to determine the extent of each firm’s innovativeness over a specific period. We found that, while government funding of R&D initiatives could make a firm more innovative initially, such schemes also had a negative effect on innovation by making projects less autonomous or flexible. These limitations meant companies were unable to experiment as much as they would like. Unfortunately, despite the limitations that using intermediaries can have, this is often the only way for small firms to gain vital support to develop and grow. Committing to such schemes is often, therefore, a double-edged sword. The decision between exploring R&D freely with little financial backing or accepting support and benefitting from tax breaks with a caveat or R&D boundaries, makes it incredibly difficult for smaller firms to navigate R&D effectively and commit the necessary funds to do so. The very real risk, if the wrong decision is made, is that a company may either become less competitive and therefore less profitable if their R&D activities are ringfenced or go out of business entirely if they simply cannot keep up with the rate at which the market is evolving. So what should smaller firms do when finding themselves at such crossroads? Our findings provide several important insights for both managers of small firms and for policymakers aiming to cultivate an ecosystem of innovation.

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Smaller firms certainly need to lean on both the expertise and the funding of policymakers to help them to innovate and grow. However, membership associations that function as intermediaries must raise greater awareness of how their supportive policies operate, in order for small firms to fully understand and benefit from them. There must also be room for flexibility. Such intermediaries should seek to seamlessly bridge the link between small firms and the state, providing better access to policy information and institutional support without limiting opportunity. After all, as with any effective service, it must be developed with the user’s key needs in mind and reviewed and updated regularly. The business landscape is continually evolving. It stands to reason that the support schemes dedicated to helping businesses navigate such unpredictable futures should evolve too. To find out more about Professor Tsinopoulos and his research interests, visit durham.ac.uk/business/christos-tsinopoulos

World Economy

Levelling up will take years, be costly and likely cause job losses if not carefully prepared and managed Following on from our previous issue, Professor Bernd Brandl examines how the Conservatives’ plans to "level up" the UK post-Brexit could affect businesses and their employees.

n the Conservatives’ 2019 manifesto, Boris Johnson stated that one of the party’s main focuses was to “level up” the UK. This is based on the idea that people and communities that feel they’ve been left behind should get a chance to catch up to other, more prosperous UK towns and cities. This pledge involved investing in towns, cities, and rural and coastal areas, giving those areas more control of how investment is made and levelling up skills using apprenticeships and a £3bn National Skills Fund. In principle, the levelling up agenda sounds promising, and one that may sway particular voters — especially those in areas deemed to be ‘left behind’. However, in reality, how likely is this to not only be effective, but actually even work? This move may be highly beneficial for businesses and workers in the long run, but without extreme planning, it’ll cause painful disruptions over the next few years. The change won’t be quick and could take years or even decades for some businesses. In the short

run, many existing companies won’t be able to afford higher wages and go bust, causing job losses and industrial conflict. Yet in the long run, the economy could benefit as more productive, skill-driven and innovative companies would be able to succeed on the market. But, how do we know this? This area of focus is something I’ve researched for a number of years, with a particular look into the governance of wages, skills, and productivity in different countries, and what role interest organisations play in the governance that has examined the consequences of the government’s transition on the economy, businesses and workers. So, is a successful transition possible? It can only work if it’s accompanied by policies that support business and workers. A smooth transition will be costly for the government due to the need to invest in infrastructure and training facilities. Many British businesses have been running on a low-wage, low-skill, low-productivity business model, due to two main reasons. First, in the past few decades there was a constant influx of migrant workers willing to accept low(er) wages, and second, apart from the minimum wage, there was almost nothing in place that prevented companies from keeping wages low. Therefore, many businesses competed with each other by keeping wages and working conditions low and had little incentive to invest in the skills of their employees in order to gain a competitive advantage.

Durham University Business School / IMPACT

Now, the PM’s new economic vision looks to replace mass immigration with higher wages and better working conditions to encourage people into key sectors under the guise of moving Britain "towards a high-wage, high-skill, high-productivity economy", in which "everyone can take pride in their work and the quality of their work". There are three key elements to make the transition work. The first is patience — the transition could take years for some sectors, and even decades for others. Secondly, the transition is costly and the government must be prepared to invest in infrastructure and training facilities. Thirdly, the process is likely to be painful for many businesses and workers since there’ll likely be job losses and social disruptions in the years ahead. However, in order to accelerate and facilitate the transition, the government should manage and coordinate the transition process. Preferably, they’d work together with representatives from employers and employees so that no one’s left out and the expertise of everyone is taken on board. The way the government manages the transition will also show how conflictual the

years ahead will be since the Many businesses transition could be socially competed with each and economically cushioned. other by keeping In summary, the transition of wages and working the British economy "towards conditions low and a high-wage, high-skill, highhad little incentive productivity economy" isn’t as to invest in the easy as it looks and might lead to skills of their substantial disruptions and conflicts in employees. the years ahead. The transition process can be expected to be time-consuming, costly and likely to cause some damage in the short term. However, in the long run, it could be highly beneficial for businesses and workers. It'll take a lot of “guts” for the government to initiate this move, since voters in the next election might go to the ballots on basis of the short-term pain they already see instead of considering the long-term gains. For more information on Professor Brandl, and his research interests, visit durham.ac.uk/business/bernd-brandl

This move may be highly beneficial for businesses and workers in the long run, but without extreme planning, it’ll cause painful disruptions over the next few years.

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Society

Durham University Business School / IMPACT

Follow back?

h, a billionaire buying a tech company. According to the recent app prompt, I was an early adopter of Twitter and just passed my 15th Twitter-versary. In retrospect, and I think a lot about this (daily), the primary indicator of whether something is good for you or not is… time. Specifically, the part when we realise how much of our day is given for free to the platform. The social accounts I started in the 1990s (bFB, before FB) had defined boundaries, controlled content (with effective moderators), and received generally-expected etiquette feedback. Frankly, there wasn’t much you could do beyond sharing favourite music, IM-ing, or adding to the many discussion threads built into a listserv. Then social media emerged, and we started to enjoy realtime updates and dedicated more time to the platforms to discover new things or get shouted down for beliefs we thought were personal and private to us. It’s a choppy time for big tech. Elon Musk’s aggressive negotiation to seize control of Twitter, while promoting a PR narrative (mainly on Twitter) around the liberation of the site, underscores the complex set of relationships users have with platforms. Twitter is essentially a thing that we use. We use it for ‘free’ (aside from our labour and content on the site, but practically anyone who has access to the internet can sign up). Like its counterparts, it’s also a thing characterised by the perspectives of the CEO and major shareholders’ vision for the site. In numerous conversations, many posted as Twitter threads, Elon Musk has shouted to followers about what he promises to do with Twitter. Musk is the world’s richest man — intent on enabling people to live on other planets and accelerate sustainable transport. For Twitter, Musk promises an open, free and authenticated experience. He’s recently tweeted that the Twitter deal has been put temporarily on hold pending details on the proportion of spam/fake accounts.

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Would Elon Musk’s Twitter be the democratic free speech haven he claims? Dr Mariann Hardey reflects on the billionaire’s deal to buy the social media platform. I’d be surprised if this prevented Musk from securing Twitter. Instead, this is the subtle art of negotiation involving due diligence to test the value proposition and ensure Musk doesn’t spend too much on closing the deal. It’s not easy to understand the consensus behind huge (astronomic) valuations in big tech markets. In the US, where most major tech billionaires and their companies are based, there’s increasing scrutiny from politicians concerning the monopoly trend of companies like Amazon, Google, Facebook, Twitter and others to distort information and grab all the profits they can. Democratic Representative, Alexandria OcasioCortez, is well known for speaking out against giant and greedy Silicon Valley tech companies. Musk has a reputation as a shrewd businessman — a mogul who follows his gut and dreams, believing that his investment is correct. At the SXSW 2018 conference, Musk explained his business fortitude, often acting on impulse. It’s easy to see why a social media company whose operations are based on impulsive streams of consciousness would appeal. The news that a billionaire is initially seeking to buy with another tech company doesn’t seem that interesting. This is reminiscent of the rat finding the cheese in a maze test — a test revealing that rats are very smart, quick and like cheese.

There's increasing scrutiny from politicians concerning the monopoly trend of companies like Amazon, Google, Facebook, Twitter and others.

Society

The features of billionaires buying tech companies:

Control Musk tweets for freedom of expression: “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.” I’m pretty sure Twitter tried this approach back in the old days, but then the company and its users had to deal with the reality of farmed bots, trolls and users with high follower counts (key persons of influence) who march into the town square and shout the loudest. Musk may have overlooked (or maybe he isn’t concerned about) EU legislation moderating illegal and harmful content. Even town squares need rules and policing. Musk’s mission is “free speech”. Ironically, this billionaire seems intent on buying a social media platform under the umbrella of free speech principles so he can control the narrative. Maybe, but it’s also clear the mission of Musk is to invest in a profitable tech company and distract our attention ahead of the sh*tshow that is the norules, anyone can post, welcome Trump back, marketplace.

Principles With great wealth comes telling the little people what to do. A more honest description of social media would be ‘marketplace platforms’ or ‘consumer data tailing’. Social media platforms make a show of protecting their users while simultaneously selling their data to third parties and tracking them over long periods to better sell them more things, sell this information onto third parties, and continue to follow them to… you get the picture. So, Twitter, along with all its friends and followers, isn’t a marketplace based on consumer data tracking; it’s a democracy. Use the word ‘democracy’ and your billionaire is offering us salvation and voilà… more profits. Today, I negotiated with my six-year-old the number of marshmallows reasonable in a hot chocolate (it’s a lot). Today, I began calling the dog Number One, which I am sure means that I’m Captain of the Enterprise. So, I’m just like US representative Katie Porter with her whiteboard. On Musk’s Twitter, you won’t be a user but a visitor to his town square — let’s make no pretence who will be mayor. ‘Town square’ implies a socially safe space, and ‘visitor’ ensures you forget about the strong market forces following your every move.

Red flags A more honest description of social media would be ‘marketplace platforms’ or ‘consumer data tailing’.

The cat has informed me she will eat a ball of yarn, a red flag. Obviously. And potentially expensive vet bills. So now we’re going to review the Twitter-Musk, Twusk(?), and Mutter(?) red flags. Twitter isn’t a democracy. It’s a tech company designed to make its shareholders and investors’ money. With a billionaire at the helm, ‘free speech’ becomes an effective PR strategy to produce more content and set the town square on fire. One observation by John Naughton, writing for The Guardian, is the tight spot Musk will find himself in with Chinese investors. If Musk refuses to initiate new levels of control for Twitter over what the Chinese state perceives to be seditious content, this could be very damaging for Tesla. The above is Big Tech frippery: big billionaires and big nations posturing to each other. An actual red flag is the coordination of far-right accounts to abolish women’s rights. Social media feels already a very unsafe space for women. Much like many real-life town squares, we must choose carefully when to enter those spaces and how long to stay there. Musk created controversy in Texas when he implemented a new company policy to pay for Tesla employees’ out-of-state abortions. Ok, fine… So, is it the Chief Executive’s role to impose rules and intervene — or is Musk leaving the town square to its misogyny and trolls? The social media maze is windy with lots of dead ends, but the stale cheese means it’s beginning to smell. Please don’t follow back. For more information on Dr Hardey and her research interests, visit durham.ac.uk/business/mariann-hardey

Durham University Business School / IMPACT

Society

Why ethical use of AI robots must incorporate accountability and moral intensity

he use of Artificial Intelligence (AI) robots in the workplace and to provide both services and products is becoming more and more commonplace. Today, autonomous bots are deployed to perform tasks across a whole host of sectors in order to make practices smoother and more efficient, improve services for customers and even keep people safe. Far from day-to-day routine tasks in sales, education delivery or processing, today’s AI bots can effectively support medical diagnosis, handle dangerous items or complex information, take over security, or even assist us in hospitality. The sheer number of tasks

For many businesses, investing in AI improves productivity, boosts revenue, increases accuracy and opens new avenues for industry. But, according to Dr Zsófia Tóth and her colleagues, this isn’t without risk…

they can take on, the swift nature of the way they operate, and the speed of their learning makes it impossible for humans to keep up. Whilst such efficiency has previously caused alarm amongst human workers when it comes to job security, the pace of change in the workplace, and the pressing need for tech-savvy upskilling, there’s another concern growing in momentum. With this increase in AI robotics use and capability, questions arise of another nature… How can we keep track of their actions and decisions? And, how can we make sure to clarify accountability to reduce errors in the actions of an AI robot?

Today’s AI bots can effectively support medical diagnosis, handle dangerous items... take over security, or even assist us in hospitality.

Issue 11 / 2022

Society

Though highly trained AI robots are typically more effective and make less mistakes than human counterparts, there’s one glaring issue that arises when those rare mistakes happen. In the case of tasks that aren’t supported by AI robots, there’s typically more clarity on who takes responsibility. However, when an AI robot operates, who are the stakeholders that take responsibility? And how does moral intensity come into play (i.e., is it a menial task like cleaning, or something of higher risk such as caring for vulnerable people)? We decided to explore this in our latest paper. Through our research, we’ve devised a framework for industry and society to follow in order to clarify where responsibility lies when AI slips up. We researched two themes for ethical evaluations; the locus of morality, meaning the level of autonomy to choose an ethical course of action, and moral intensity, meaning the potential consequences of the use of AI robots. To develop the framework, we first reviewed the uses of AI robots in different professional settings from an ethical perspective. From there we developed four clusters of accountability to help with the identification of specific actors who can be held accountable for an AI robot’s actions.

These four clusters revolved around the ethical categories of; illegal, immoral, permissible and supererogatory, which are outlined in normative business ethics. Supererogatory actions represent a positive extra mile from what one expects morally, whilst the other three categories were either neutral or negative. Illegal is any action that’s against the law and regulations; immoral is any action that only reaches the legal threshold’s bare minimum, and morally permissible actions are those not requiring explanations of presumed fairness or appropriateness. Humans can set the boundaries of what AI robots can and should learn and unlearn (e.g. to decrease or eliminate racial/gender bias), and the type of decisions they can make without human involvement (e.g. a self-driving car in an emergency setting). With this in mind, each cluster in the framework included actors who were responsible for an AI robot’s actions. In the first cluster, ‘professional norms’, AI robots are used for small, remedial, everyday tasks like heating or cleaning. Here, robot design experts and customers take the most responsibility for the appropriate use of the robots.

AI may make decisions with potential major consequences, such as healthcare management or crimefighting.

Durham University Business School / IMPACT

In the second cluster, ‘business responsibility’, AI robots are used for difficult but basic tasks, such as mining or agriculture. In this instance a wider group of organisations bear the brunt of responsibility for any misstep made by the technology. In cluster three, ‘inter-institutional normativity’, AI may make decisions with potential major consequences, such as healthcare management or crimefighting. Here, it’s domestic governmental and regulatory bodies who should be increasingly involved in agreeing on specific guidelines and shouldering responsibility when errors occur. In the fourth cluster, ‘supra-territorial regulations’, AI is used on a global level, such as in the military, or driverless cars. Here we deduced that a wider range of governmental bodies, regulators, firms and experts must hold accountability. As it becomes increasingly complex to attribute the outcomes of AI robots’ use to specific individuals or organisations, these cases deserve special attention.

When an AI robot operates, who are the stakeholders that take responsibility?

When you bring AI robots into the mix, the line of accountability becomes much more difficult to understand. If we can’t take responsibility for error, how are we ever to learn how such incidents could’ve been prevented, or avoid repeating them in future? This is among the reasons why this framework can be useful. Previously, the accountability of these actions was a grey area. By offering ways to ensure better clarity of responsibilities from the beginning when it comes to the use of an AI robot, business leaders, policy makers and governments can be reassured knowing that their technological advances are not reckless. To find out more about Dr Tóth and her research interests, visit durham.ac.uk/business/zsofia-toth

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Society

Can you control your impulses? Can someone else? Research into consumer behavioural profiling and impulse buying led by Professors Sarah Xiao and Mike Nicholson has enabled companies to build new marketing toolkits, resulting in significant financial gains…

id you decide to buy that new outfit on your own? Or were you subtly encouraged to do so? We all know by now that, more often than not, our choices are not our own — particularly when it comes to purchasing. Every day we’re confronted with persuasive messaging and attractive imagery about products and services as companies vie for our attention and our business. Whether through catchy jingles on radio adverts, flashy or aspirational images in window displays or magazines, or recommendations made by online marketplaces offering daily deals and bargains based on previous shopping habits, we’re influenced in our everyday and impulse purchases. To this latter example, as technology becomes more advanced, the ways in which companies can reach us and appeal to our tastes are getting increasingly smarter, from internet browsing history recording items we’ve viewed online and using that to tailor adverts across other web pages, to supermarket loyalty cards using data analytics to keep track of purchases and offer discounts on items that might be of interest. While some of it may sound rather devious, there’s a significant upside. As technology gets smarter, companies are able to tailor their advertising and marketing accordingly — ensuring that what they put in front of their consumers will address their needs as closely as possible. Meaning that, when marketers can get it right, there’s far less chance of consumers being bombarded with nuisance messages that don’t offer anything they might be interested in. Which, for anyone who’s been on the receiving end of poorly targeted adverts, would be a significant benefit.

And, when organisations and retailers can get their marketing right, appealing to the right audiences with the right products and services in the right way, the result is usually a boost in sales and revenue and a chance for a company to profit and grow. It’s a win-win — but where to begin? This is the question that I, along with Professor Mike Nicholson, have sought to answer through our research. In aiding organisations to provide the best possible service for their customers, we’ve undertaken a number of collaborative research projects which explore the relationships between consumer behaviour, consumer profiling and the interventions made by retailers. The results of these studies have been instrumental for marketing agencies and companies to build new toolkits which have resulted in significant financial gains. There have been three key studies that have supported our work in this area. The first, 'Developing a shopping contextspecific approach to marketing in retailing', explores how to map, characterise and integrate the different stages of a consumer’s journey, the context behind it, and the lived experience of the customer by analysing their use of various retail channels — traditional in-store shopping, online shopping on a computer and the ever more popular mobile sites. By combining each of these factors, we were able to develop a context-dependency approach which integrated the personal attributes of the customer (such as their attitude, their past experiences or their personality) with the influence of their social situation or physical environment, plus any triggers (promotions, flashy packaging or desirable brands, etc.) they may be exposed to during their purchasing.

As technology gets smarter, companies are able to tailor their advertising and marketing accordingly.

Durham University Business School / IMPACT

Adopting a behavioural approach to our work, rather than relying on a purely statistical analysis, allowed us to better understand, predict, and then devise ways of appealing to consumers in any given situation. By sharing these findings directly with industry, our work added real value to firms seeking to communicate with their customers in different situations. A further study, 'Identifying behaviour intervention for impulse buying in consumer journey', explored the effectiveness, or lack thereof, of the marketing tactics designed to encourage impulsive or unplanned purchases. To date firms have often found tactics such as these difficult to actually put into practice due to wide variations in outcome. The methods developed have therefore focused on applying behavioural science insights to target such tactics more precisely to appeal to the dominant behavioural patterns of consumers. Together, Professor Nicholson and I mapped a large number of the key factors and triggers known to increase impulse buying during the consumer purchase journey and associated decision-making processes. Through our work, we identified the important factors that marketing managers need to be aware of — the interacting effects of internal triggers (the consumer’s urges), external triggers (like adverts and promotions), and learned rules (such as herd mentality and social conformation) which influence consumer decision-making. By breaking this down we were able to offer clear guidelines for developing appropriate behavioural interventions (or 'nudges') for each stage of the shopping journey. Other studies we’ve embarked on have involved exploring the impact and potential to be gained from the ever-smarter Internet of Things when it comes to consumer behaviour, and even setting up lab-based projects within the Business School using sophisticated eye-tracking technology on consumers as they browsed websites whilst purchasing. Looking to the future of retail, a further study has explored how virtual reality technology can link consumer perception to reality in their decision-making process.

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The culmination of these efforts is producing marketing toolkits — simple, industry-focused guides, instructions and processes for businesses to use in their own marketing operations. Additionally, by working with companies like Procter and Gamble, IBM and numerous small and medium businesses in London and the NorthEast, we’ve been able to place our academic acumen directly at the heart of industry and see first-hand how better appealing to consumer behaviours can contribute to changes in the marketplace and people’s purchasing behaviour. The result of the research saw an increase in profits for companies by providing them with an improved approach to market research and new marketing toolkits that allow them to access potential clients in a scientific (evidenced) based way — linking academia to business practice to enhance work, life and opportunity for all. For more information on Professor Xiao and her research interests, visit durham.ac.uk/business/sarah-xiao To learn more about Professor Nicholson and his research interests, visit durham.ac.uk/business/mike-nicholson

Society

A Q&A with Executive Education Director Christos Tsinopoulos In this reprinted Q&A, Christos Tsinopoulos shares his thoughts on the future of work and what makes Durham University Business School so distinct.

ewly appointed in his role as Associate Dean for External Engagement at Durham University Business School, Professor Christos Tsinopoulos is responsible for leading and implementing the School’s outreach and executive-education strategy. With the school being one of the UK's longest established business schools and recognised globally as a top international and triple-accredited institution, some might think Tsinopoulos has an easy job of compelling participants and corporates to join the School’s executive-education programmes. However, the world has experienced an unprecedented level of change in the past few years, which has made it tricky for some organisations to return to the status quo of operations — let alone consider embarking on developing new skills and practices. Yet it is for precisely this reason that Tsinopoulos argues that lifelong learning and committing to the continuous development of skills and abilities is so vital. By creating innovative, challenging and flexible executive-education programmes, and leveraging the best elements of both face-to-face and virtual learning, Tsinopoulos believes Durham will not just educate but inspire lifelong learners to do better — not just professionally but to the world around them. We spoke with Tsinopoulos about educating executives in a post-pandemic world, the importance of ensuring access to education for all, and how Durham University Business School is leveraging all the tools in its arsenal to meet the demands of the future.

What is Durham University Business School Executive Education’s general approach to leadership development?

We aim to work with our partners to develop and enthuse leaders and entrepreneurs who create, share and use knowledge to deliver equitable and sustainable futures around the world. We have developed three distinct, yet flexible streams of programmes that have been tailored to address our clients’ needs. All are built on our world-class research and management education, and are delivered through a mixture of face-to-face, virtual and hybrid formats. The first stream benefits from the government’s senior leadership apprenticeship scheme. This is appropriate for individuals who are moving into the senior leadership roles. The second, and more substantial stream, focuses on the development of partnerships with our clients. Here we develop customised programmes to tackle specific management development needs. Finally, we offer a stream of open programmes, which are available to any seniorlevel professional who wishes to expand their knowledge and perspectives in a specific area. The structure of these is inspired by our MBA suite of offerings, so participants can choose to build a portfolio of executive-education modules, leading them on to securing accredited academic and professional qualifications.

Durham University Business School / IMPACT

What are three key leadership skills executives need to be successful in business?

The foundational leadership skills of showing empathy, fostering open communication, and building a culture of trust have not gone away. However, we have seen a rapid shift on the need to manifest these in hybrid environments. So, the three emerging leadership skills are: • ability to swiftly manage change in hybrid environments • capability to communicate and lead in a constantly changing digital world • ability to make swift, data driven decisions which take into account a changing business environment. Durham’s flexible and tailored approach to executive education supports businesses of all sizes and across all sectors to develop the leadership skills needed to take them forward in this ever changing working world.

As companies assess the future of work, how is lifelong learning increasingly important?

Before the pandemic, the future of work was frequently imagined as a far-off environment where individuals would have built the skills to enable them to work in a digital world, it was a distant aspiration. However, the pandemic has significantly accelerated this transformation as companies have had to adapt swiftly to remain operational. Not only has it boosted investment in technologies allowing seamless distant working, more crucially, it has made people challenge their long-held assumptions about what are the best ways to work. We are in the beginning of a new era where flexibility, leadership in a virtual world, and the ability to acquire new skills will be the key differentiators for businesses and individuals. Those who are open to change, to growth and pursue new ideas, and who invest the time and enthusiasm in educating themselves (and their teams) to building such skills, will find themselves at a significant advantage. As digital technologies grow ever smarter, we too must stay ahead of the curve and develop our own capabilities.

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Vitally important in this digitally-savvy, increasingly hybrid world is the ability of individuals to stay connected to their teams, build authentic connections in virtual settings and for a progressive, supportive culture to extend beyond the physical walls of the workplace. This is why the modular format of executive education at Durham University Business School works so well — it encourages and enables participants to explore a range of skillsets, consider new areas of professional development and build both their personal and practical skills.

Is online delivery here to stay?

Yes. However, the exact way in which online will be combined with face-toface delivery is likely to be not known for a while. At Durham University Business School, we were fortunate in that one of our flagship professional programmes, the MBA, was offered online long before the pandemic. Our online MBA has been well-recognised for its quality and effectiveness. This meant our technology, approaches to teaching, and willingness to experiment were significantly ahead of our competition. Even so, we learned a lot during the last two years. We had to make sure all our executive programmes were offered at the quality expected. We also found that our learners’ expectations of online experience advanced significantly. This meant we had to rethink a lot of what we do and how we do it. We introduced many more opportunities for learners to engage with each other, forums to share ideas and best practice and more interactive study materials. Fundamentally though, learners, employers and educators can now see how they can make more efficient use of their time by learning online. And how to better tailor learning for in-person and online delivery, taking the best bits from both to enhance the study experience overall. Our own hybrid executive-education model reflects exactly this. We therefore expect this trend to continue.

Society

What particular industries should be looking to executive education today?

The leadership skills needed to lead in this new world are not confined to one sector. However, we have noticed an increase in demand from the more ‘traditional’ sectors, e.g., construction, automotive and aviation. They are all looking to transform the ways in which they work and to upskill the management capabilities of their staff. Although it would be difficult to single out one sector, as digital becomes more a part of everyday working life, some of these traditional sectors may have some more catching up to do. Because of this, we are positioning our learning accordingly, so we can provide the opportunity and support that industries will need.

How is executive education at Durham University Business School supporting more women and minorities on their leadership journey?

Our business school more generally, and our executive-education provision more specifically, has put issues of equality, diversity and inclusion (EDI) at the forefront of how we operate. We have been recognised by the Athena Swan Charter and are fully committed to its principles. This approach has resulted in significant changes in many structures and policies. We have been continuously and substantially adapting our curriculum to proactively support women’s and minorities’ leadership journey. Our exact approach depends on the client, the course and the participants. For instance, our leadership modules deal directly with issues of equality in the workplace. Similarly, our academic research, which feeds into the material we teach, is at the forefront of EDI thinking. This is a complex, multifaceted issue. However, we strongly believe that our systematic approach and engagement puts us ahead of our competition.

What makes Executive Education at Durham so distinct?

Durham is a top international, triple-accredited, full-service business school. Founded in 1965, we are one of the UK's longest established business schools and are proud to be integral to Durham University. Durham is a globally outstanding centre of teaching and research excellence, a community of extraordinary people, and we are located in the unique and historic setting of Durham City. We are surrounded by English heritage, stunning architecture and plenty of open space to disconnect from the stresses of typical working life, take a breath and reflect on our own progression. We develop tailored programmes that make use of the latest management knowledge, often generated by research of our own academics. Therefore, our executive-education learners acquire leading edge knowledge relevant to their own needs, experience an outstanding learning environment, and earn a recognised, career-advancing qualification. There are many executive-education providers in the market — both via business schools and other, external industry providers. What I believe gives a business school the advantage here is their role in challenging, analysing and deconstructing long-held practices on how we should do business and make it their mission to identify flaws, find solutions and stop business thinking from stalling. Our academics and expert faculties provide the new ideas and creative thinking required to develop truly innovative, progressive programmes which explore the latest management knowledge and give our clients the edge in dealing with the modern challenges of their industries. Our Executive Education department consults with businesses to design both open and customised programmes that address their business needs. This means we are developing programmes that directly address the subject areas and skill sets that businesses require when they require them. The capacity to build up a portfolio of modules gives our individual executive-education learners the chance to tailor their learning making it relevant to their own needs, build a diverse and knowledgeable network of fellow lifelong learners and experience an outstanding learning environment through this. This feature has been reproduced with kind permission of The Economist Education. For more information on Professor Tsinopoulos and his research interests, visit durham.ac.uk/business/christos-tsinopoulos

Durham University Business School / IMPACT

Society

How long can USS members expect to live? How high are Universities Superannuation Scheme members’ mortality rates, and what does that mean for the future? Professor Kevin Dowd and his colleagues investigate.

y mortality modelling colleagues and I have just had a paper ‘A general framework for analysing the mortality experience of a large portfolio of lives: with an application to the UK Universities Superannuation Scheme’ published by the European Actuarial Journal. I admit the title doesn’t slip off the tongue. I preferred the earlier title ‘Professors are made of sturdy stuff’. The authors are Andrew Cairns (Heriot-Watt), David Blake (City University), yours truly, and Guy Coughlan, Owen Jones and Jeffrey Rowney from USS. Our study compares the Universities Superannuation Scheme (USS) ‘mortality experience’ (i.e. the ages members died) with English mortality experience subdivided into deprivation deciles using the Index of Multiple Deprivation (IMD). By English, I really mean English and Welsh, but not Scottish. Don’t ask why ‘English’ includes Welsh but not Scottish: the reasons are lost in the mists of actuarial time. The main finding is that USS members had significantly lower mortality rates than even IMD10, the least deprived or most affluent 10% among the English general population. In plain English, we (USS members) have better ‘mortality experiences’ and by implication, are likely to live longer than well over 90% of the general population for any given current age. This is good news, up to a point.

How do we explain this finding? We don’t, but I can hazard a partial guess. USS members are more affluent and more educated than most people, and higher affluence and education are known to be associated with lower mortality rates. The rest is speculative, but perhaps academics’ better mortality experience so far might also be associated with lower stress levels… at least in the distant past. Personally, however, I’ve never once in the last 30 years met a single good academic who wasn’t seriously stressed. I mentioned that our results are good news up to a point. Why the qualifier? Part of the answer is that it’s not good news for us/USS if we all live too long. If we live long enough, then USS (and any other pension fund) will go bust, which wouldn’t be good news for us either. No one knows what would happen then, but three possibilities come to mind. The first is that taxpayers step in and bail us out, but I wouldn’t count on younger tax-paying people being too keen to bail out an affluent older group who had it good for all these years. Second, there could be some situation where we/USS members see our pensions cut as part of a more general misery-sharing exercise. That’s usually what happens in such circumstances. Or, third, we might lose our pensions altogether (if current Financial Services Compensation Scheme rules still apply), get a cheque in the post and be told to sort our own pensions out when we’re in our dotage. In that case, we can at least expect some pensions salespersons to be waiting at the care home or our own front doors looking to take advantage of our situation. But all this is just a small part of a much bigger problem, namely, that both private and public pension funds across the world are seriously underfunded and have been for decades, and no one anywhere is doing anything to seriously address this problem. For more information on Professor Dowd and his research interests, visit durham.ac.uk/business/kevin-dowd

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Society

Who cares about corporate greenwashing? How sustainability reporting is changing Professor Carol Adams shares recent developments in sustainability reporting and just how much is at stake.

nitially, there was just one key player setting sustainability reporting standards and frameworks to hold organisations accountable for their impact on economies, society and the environment: the Global Reporting Initiative (GRI). The GRI Standards are concerned with reporting to a broad range of stakeholders, including investors. Other bodies were established to address the implications of sustainable development megatrends (particularly climate change) on companies. In 2022, these newer organisations, focused on ‘enterprise value’, have been absorbed by the International Financial Reporting Standards (IFRS) Foundation and an International Sustainability Standards Board (ISSB, now comprising six people) established to sit alongside the International Accounting Standards Board (IASB). Accounting academics researching accountability for sustainability have been critical of these developments for a number of reasons: their proposed focus solely on the enterprise value of sustainability trends; a so-called ‘investor perspective’ that doesn’t take as a starting point the impacts of organisations on sustainable development; the implications for ‘greenwashing’ and strategy in relation to sustainable development; and a lack of collaboration with the GRI.

However, on 24 March 2022, the IFRS Foundation and the GRI announced an agreement to coordinate their standardsetting activities and align terminology and guidance. The unworkable notion of dynamic materiality, concocted to show the relevance of bodies existing at the time, has disappeared. Instead, they favour the ‘two pillars’ that GRI CEO, Eelco van der Enden, has been speaking about. The IFRS Foundation/GRI agreement is quite remarkable given previous positions. While the GRI has supported the consideration of financial statement implications of sustainability matters from the outset, 18 months ago the IFRS Foundation Trustees put out a consultation paper that was dismissive of GRI.

Investors will benefit from continued GRI reporting on the impact of companies on sustainable development.

What’s happened since? A few days after the agreement was announced, the ISSB released its first exposure drafts: S1 on 'General Requirements for Disclosure of Sustainability-related Financial Information'; and S2 on Climate-related Disclosures. The reference to ‘financial’ disclosures in the latter, largely adapted from the Taskforce for Climaterelated Financial Disclosure’s recommendations, has been dropped. The general disclosure standard requires judging what is material is from an enterprise value perspective, providing ample opportunity for increased greenwashing. The promised connection of either exposure draft with the financial statements is elusive.

Durham University Business School / IMPACT

There’s much to do in developing approaches to disclosing the financial statement implications of sustainable development risks and opportunities.

Who stands to gain? • The ISSB stands to gain credibility in sustainability that it’s not yet earned and will not earn through an investor focus alone. • By aligning with the GRI it stands to benefit from their experience and multistakeholder approach to identifying issues. • The GRI might gain more funding, for example from national governments and stock exchanges seeking to mandate a double materiality approach. • Investors will benefit from continued GRI reporting on the impacts of companies on sustainable development (which affects long term returns). • Reporters will more easily align with both sets of standards and the EU Corporate Sustainability Reporting Directive (CSRD). • Mandating of GRI reporting alongside ISSB reporting will reduce greenwashing and increase accountability. • All will benefit from the disappearance of ‘dynamic’ materiality and the so-called WEF (World Economic Foundation) indicators. These are effectively a subset of GRI indicators selected to reduce the burden of impact accountability on businesses. Dynamic materiality refers to the progression of issues that impact the economy, environment and people to those that also affect enterprise value. A standard-setter focusing only on the latter would be taking a back-to-front approach and inviting greenwash: if you don’t prioritise looking at the impacts of an organisation on sustainable development and its megatrends, you can’t pick up what’s relevant to investors.

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Society

Where to now? Several accounting, investor and other capital market players have called for a two pillar or double materiality approach (e.g. the United Nation’s PRI and the Institute of Chartered Accountants of Scotland). Others have agreed with whatever the IFRS Foundation has proposed, perhaps assuming that it would make their lives easier or give them more control. Time will tell how many stakeholders will support this cooperation agreement. For example, will the International Public Sector Accounting Standards Board (IPSASB), which has committed to work closely with the ISSB, also now work with GRI and its Global Sustainability Standards Board (GSSB)? The latter seems a more obvious fit for the public sector with its broad range of stakeholders and the imperative of considering its impacts on sustainable development. With additional funds, GRI would be able to do more — including better connecting its standards to the achievement of sustainable development and speeding up the development of sector standards, such as a much-needed public sector standard. The ISSB must differentiate its work programme from what has been the purview of the GSSB. There’s much to do in developing approaches to disclosing the financial statement implications of sustainable development risks and opportunities. This is important to investors.

The ISSB stands to gain credibility in sustainability that it’s not yet earned.

Two pillars require a bridge. Contenders are an updated Management Commentary Practice Statement incorporating multiple capitals and the Sustainable Development Goal Disclosure Recommendations. The Management Commentary Practice Statement is guidance on narrative reporting published by the IASB. But its conceptual framing doesn’t fit the purpose of reporting to a broad range of stakeholders, nor on impacts of the reporting organisation on economies, the environment and society. A conceptually appropriate bridge could be co-created by the GSSB, IASB and ISSB. With respect to the three scenarios I set out in October 2021 (IMPACT magazine issue 10 — Sustainability and Society): the disastrous scenario A has been avoided and we’re on the way to achieving somewhere between preferred scenarios B and C. Staying on that path, arguing for both sets of standards to be mandated and maintaining a focus on the SDGs as our north star will require continued leadership of the sort demonstrated in forging the cooperation agreement. Much is at stake. This article was adapted from Professor Adams’ piece in ESG Investor (esginvestor. net). For more information on Professor Adams and her research interests, visit durham.ac.uk/business/carol-adams

Durham University Business School / IMPACT

Society

Helping human rights champions to change and develop The project aimed to produce a framework that would provide guidance to NHRIs and assist them in strengthening their independence through building their own resilience. To further this aim, I worked with the ODIHR in conducting research into resilience as it related specifically to the organisation, and then applied the findings to produce a Resilience Framework and Toolkit which focused on the factors outlined in Figure 1. The development and implementation of organisational resilience practices will help to improve the ability of NHRIs to anticipate, prepare for, respond to, and adapt to changes, threats and sudden disruptions. The framework and toolkit are due to be launched at a conference in Warsaw in September and I have been invited to facilitate a key session at the conference.

A widely published and leading expert on change in organisations, Professor Julie Hodges was invited to work with the Human Rights Department of the Office for Security and Cooperation in Europe (OSCE).

long with others I was invited to work with the Human Rights Department on a project aiming to increase effectiveness and strengthen the working environment for human rights defenders in the OSCE region, including National Human Rights Institutions (NHRIs). The Office for Democratic Institutions and Human Rights (ODIHR) is the principal institution of the OSCE and is responsible for the human dimension. ODIHR is active in the fields of human rights, election observation, democratic governance, tolerance and non-discrimination, and the rule of law. In accordance with the mandate of ODIHR, the Human Rights Department assists OSCEparticipating States in fulfilling their obligations to protect and promote human rights and fundamental freedoms in a number of areas. In particular, the Human Rights Education and Capacity Building Programme aims to increase the capacity of government officials to respect, protect and fulfil human rights, as well as strengthen the capacity of civil society actors and national human rights institutions (NHRIs) to monitor, report and promote human rights and fundamental freedoms. Human Rights Defenders in the OSCE region face challenges in conducting their human rights work safely and securely. NHRIs also face specific threats due to their position in the national human rights infrastructure. Such threats — which include physical attacks or threats, budget cuts, smear campaigns and infringement in selection and appointment procedures of heads of institutions — negatively impact the work of NHRIs, which rely on their independence to carry out their functions effectively in democratic societies. These serious challenges give rise to the need to provide operational guidance on building a long-term resilience of NHRIs.

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Effectiveness Legal powers & mandates

Efficiency

Leadership

Relevance

NHRI Resilience

Building alliances & stakeholder engagement

Morale

Human Rights competence

Communication

Financial resources

Integrity

Figure 1: Factors which contribute to the resilience of NHRIs.

For more information on Professor Hodges and her research interests, visit durham.ac.uk/business/julie-hodges

Engagement

Natasha Boulding: Building a new future Natasha Boulding discusses how she and her fellow PhD colleagues are transforming the construction industry. Article originally written by Chloe Holmes for North East Times Magazine.

atasha Boulding and her two friends Scott Bush and Phil Buckley are having the time of their lives making building blocks in a little trading estate unit in County Durham. Within five years, they have gone from experimenting with waste materials in their Durham University laboratories and kitchens, to developing technology capable of transforming waste plastic and other byproducts — otherwise confined to landfill or incineration — into a carbon-negative aggregate for concrete. No wonder the construction industry is already taking notice of their startup business Sphera. The trio are on the verge of upgrading their headquarters, expanding development, testing and staff, as they make environmentally-friendly concrete that will literally change our landscape forever. Before the big move, Colin Young met the entrepreneur who is helping transform the way we build. We’re 12 minutes into the interview and I know Natasha Boulding and I are going get along just fine.

Why would we not go into that industry to make a positive change?

Our chat comes just weeks before Natasha and her team moves to a much larger space at Jade Business Park, in Murton, near Seaham, in east Durham. “Being an outsider, you come from quite a special, naive place,” says Natasha. “And I think naivety is underrated.

“If I’m an architect asking another architect what would be deemed a ‘stupid question’, I might be judged. “But if I’m not from the sector and ask a stupid question, I might just get the answer I’m looking for. “I actually don’t think any question is stupid — I like stupid questions — and if someone has the confidence to ask a ‘stupid’ question, for me, that’s a strength. “We started our journey by asking lots of stupid questions and understanding the sector a bit more.

She likes stupid questions. The 28-year-old (she thinks) is explaining why she, and fellow Durham University PhD colleagues Scott and Phil, are transforming the construction industry through their business Sphera, by developing sustainable carbon-free concrete without any experience in the sector whatsoever. Speaking in a quiet room, away from the hubbub of testing and machinery, and the buzz of their industrial unit in Fishburn, near Sedgefield, County Durham, Natasha says it was an obvious decision for the trio, who have years of experience in scientific research and innovation, including synthetic polymer chemistry, functional surface chemistry and nanotechnology.

Durham University Business School / IMPACT

“It’s not worrying about asking the questions that counts.” And Natasha says the naivety of her, and her wider team, has benefited Sphera’s growth. She says: “We have zero experience of construction between us, and I think that has been one of our strengths. “You can start in a job or industry and learn from people who’ve done what they’ve always done and don’t really think about doing things differently — or if you do, you are seen as a disruptor. “I was very conscious initially that we didn’t have any experience and would think, ‘why are we doing this, because there’s so much to learn?’, but looking back that’s the best way to do it. “In academia, the longer the words and more complicated the sentences, the smarter you’re deemed, but I never understood that. “To have someone read something and not fully understand it is not being clever. “We are three people with zero experience in construction, but we could see what the problem was and thought maybe we could design a material that will help.” Natasha continues: “One of the biggest challenges in the world is concrete — there’s no debating that. “It is the second most used material behind water and contributes about eight per cent of emissions; so why would we not go into that industry to make a positive change?

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“We did some research on the biggest challenges and because concrete is quite complex, it tied in nicely with our expertise. “A lot of innovations now are tech-based and that’s just not us, but materials and physical products we do like — that’s how we started.” Sphera — a nod to spherical recycling — was founded at Durham University Business School, where the three PhD students came together, to examine the possibilities in the wider world and put their brilliant minds to good use, beyond the laboratories and classrooms (or online). They were given a project to ‘come up with an idea that would positively impact the world’ and spent two weeks before submitting a business plan and pitching to a panel. The plan would prove to be the kernel for Sphera’s OSTO-branded carbon-negative aggregate that has attracted the attention of major UK concrete makers ahead of production getting underway this year. Natasha says: “Construction was not mentioned initially, but we knew we wanted to do something that played to our strengths, so we started something with the materials aspect. “We made some concrete with different designs, pitched a simple business plan to the judges and thought that was it and that we would carry on with our PhDs. “But the judges came back and said, ‘maybe you should pursue this’. “A couple of days passed and I thought, ‘that was actually really fun, imagine if that was life and you get to do it all the time’.

Engagement

“So I got the guys back together. “We said if it didn’t look viable by June 2019, then we would forget it. “We were still full-time on our PhDs and after hours, in any time we had, we’d be making concrete. “We mainly worked at university, though Scott did a bit at home, and we basically worked anywhere we could, carrying out experiments and trying to understand it. “It was quite insane, and to start with nobody knew what would happen. “It started with a few hours and those few hours increased and the balance started going, but it became clear there was a real need for our innovation. “Phil and I finished our PhDs in lockdown, a little bit later than expected. “Scott is still to finish his… but it is very hard work.” The start-up has received grant funding from BEIS and Innovate UK, and substantial support from Durham University and the Northern Accelerator programme, as well as the Cambridge Institute for Sustainability Leadership, Creative Destruction Lab and Tech Nation. Business Durham — Durham County Council’s commercial support arm — has been instrumental in providing premises and grant support. Natasha is on the UK’s Green Building Council’s Innovative Start-Up Forum advisory board, and was last year named one of Innovate UK’s Women in Innovation, which she says has “opened doors” for the business.

She’s a trailblazer, a rare commodity in the maledominated construction industry, which is only just starting to open those doors to women. “It’s something I’m most passionate about,” she says. “There are a few females emerging but being a female in the construction industry is tough; people respecting you or even listening to you in meetings in the first place is tough. “I’ve had meetings where people wouldn’t look at me. “I didn’t really think about it until I experienced it — but it will never put me off. “I need to do what’s best for the business and get what we need to achieve from those meetings. “If I’m faced with discrimination, or someone who won’t talk to me, then we won’t work with them; we want to work with people who are forwardthinking and promote diversity in the sector. “There will probably be barriers over the next ten years of my career, but it’s getting better and the way people think is changing. “I’m 100 per cent sure you’ll see more females in construction, and STEM for sure, because it’s a fact; there aren’t many at the moment.” To read the full interview with Natasha, visit netimesmagazine.co.uk For more information on business-related PhD programmes, visit durham.ac.uk/business/phd

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Using artificial intelligence to improve efficiency in the aviation industry Hear from Harshpal Singh Vilku about his Strategic Business Project as part of his MBA (Full-time).

aking place from June to September, the Strategic Business Project forms the concluding and essential part of the Durham MBA (Full-time). Students work with businesses to analyse and evaluate a strategic issue. This provides an excellent opportunity for students to gain experience relevant to their career aspirations and enhance their professional network.

Issue 11 / 2022

Full-time MBA alumnus Harshpal Singh Vilku has a background in food and textiles and currently works for Coca Cola Europacific Partners. He was looking for a Strategic Business Project which would be challenging, interesting, and one where he could apply his management knowledge. With a keen interest in the aviation industry, Harshpal decided that a project with Boeing would be an ideal fit.

What was your project about?

My Strategic Business Project was focused on aviation turnaround management. Aircraft turnaround operations are the activities conducted to prepare an aircraft ready for departure. The turnaround process is a critical activity for airlines, airports and ground handlers and if done efficiently can help to save billions of dollars by overcoming delays and damages. Turnaround operations have been evolving from traditional to more technologically driven methods. The emergence of new technologies like artificial intelligence (AI) has opened new possibilities that can bring even more transparency to turnarounds. Boeing is leading this change by developing an AI-based model which offers two versions, a short-term and long-term solution. The purpose of my Strategic Business Project was to research and plan a successful business model for the two versions of the AI-based model. The project explored what the market was like for turnaround operations, researched how tech-ready stakeholders were, investigated what additional I have always been infrastructure would be needed fascinated by airline for stakeholders, reviewed which brands and listening set of stakeholders we should directly to officials work with first, and significantly, from major airlines covered the data privacy issues was an exhilarating related to the implementation experience. of both models. The project also involved interviewing stakeholders from multiple airlines, airports, and ground handlers across different regions.

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What were the project outcomes? One theme that emerged was that all stakeholders were willing to use new digital solutions for turnaround operations, with the majority preferring short-term solutions. The final proposal for the project was that Boeing was likely to benefit from the immediate launch of a short-term solution at multiple airports and in partnership with multiple airlines. The recommendations for the long-term solution was that Boeing should continue to work with all stakeholders in removing constraints for implementation.

My Strategic Business Project was both challenging and rewarding; it enabled me to use the knowledge and skills I had developed from my MBA. The experience of working with PhD researchers from Boeing was extraordinary. Weekly meetings ensured that I was always up-to-date with the project timeline, and kept me engaged with the project every single day. The knowledge sharing and support was immense, and I learnt so much from their way of thinking and working. Read all about Durham MBA programmes at durham.ac.uk/business/mba

Did you find it beneficial to undertake the project, and if so, how? Indeed, it was very beneficial. The project was challenging in nature, and I knew my skills would be tested due to the very nature of the project. These were my key highlights: • I enjoyed interviewing airline officials and learnt a lot from that experience. I have always been fascinated by airline brands and listening directly to officials from major airlines was an exhilarating experience. • The key concept of the project, turnaround management, was very interesting, and I was particularly fascinated with the use of AI for this.

Durham University Business School / IMPACT

This is just the latest example of a fascinating and practical business project conducted by one of our MBA students with Boeing. These projects focus on potential new products and services that are designed to support the aviation and aerospace sectors meet the challenges of a changing world. They are a great way for students to apply the capabilities they have developed on the MBA in a practical and challenging setting. Peter Allen Associate Professor of Strategic Management and Boeing Innovation Fellow

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Inspired and continuous learning

Steven will now be undertaking the research element of his DBA. Like many DBA candidates, the focus of Steven’s research is directly relevant and related to his not-for-profit organisation. “My thesis is entitled ‘Determining the Influence of Entrepreneurial Intervention on Entrepreneurial Intentions of the Youth of South Africa’. Most entrepreneurial education and intervention efforts in South Africa, Africa and other countries start at university and after high school which misses an opportunity to plant the entrepreneurship seed much earlier in young people’s minds; my MBA graduate Steven Zwane is inspiring Africa’s future entrepreneurs and has returned argument is that an opportunity is missed within this context. The basic education systems do not to Durham to continue his own learning have entrepreneurship as a subject hence I refer through the Durham DBA programme. to entrepreneurship interventions in the study. I will leverage the work of two organisations whose objectives are to teach teven Zwane recently visited entrepreneurship amongst I wanted to teach Durham as part of his Durham school age young people and young people to be DBA programme, and we took the test their effectiveness.” intentional in learning opportunity to find out more about While the research gets and harnessing these his MBA to DBA journey and what underway, Steven and YLED skills, knowing motivates his continued learning. continue to provide South Africa’s that the results In 2006, Steven first arrived at the Business young learners with much-needed of that will have School to start his MBA. He was one of three skills to improve their chances in life great impact. South African students to arrive that year and and prepare them for challenges and was supported by a prestigious Nelson Mandela opportunities beyond their schooling. This scholarship. Steven elaborates, “I was awarded continuation is much more meaningful after the scholarship in acknowledgement for the the disruption caused by Covid-19 with YLED work I was doing raising the aspirations of young boasting over 20,000 strong beneficiaries and the people in South Africa. I’d started YLED (Youth alignment of Steven’s research and his passion. Leadership and Entrepreneurial Development) Steven’s life mission is to help others reach as a social enterprise that was providing their full potential. “I currently also serve as a Saturday morning entrepreneurial sessions. I lecturer in at one of Africa’s leading business had a harsh life as a young person, in fact I had schools based in Johannesburg and would like to to raise and fend for myself from age 11 and build links between the schools YLED works with that gave me a great appreciation of how an and the university students. I would also like to entrepreneurship mindset can greatly contribute help expose Durham’s current MBA students to to one’s success. With those lenses and what I business and entrepreneurship on the continent.” was seeing in my home city, I wanted to teach For YLED, as a not-for-profit organisation, young people to be intentional in learning and developing these links and support is important. harnessing these skills, knowing that the results The organisation relies on donations and of that will have great impact to the trajectory generous contributions from both individuals of these young people lives. The work we do and business aligning their Corporate Social at YLED is centred on this cornerstone.” Responsibility activities to support YLED. YLED NPO Abridged Profile Steven had considered several UK business A non-profit organisation advocating life and entrepreneurship schools including Oxford, Manchester and Tofor find out more about Steven’s work and development of young people. Edinburgh before deciding on Durham. And YLED, visit yled.co.za or contact Steven via NPO Number: 134 – 341 when Steven decided to study for his professional Steven@yled.co.za PBO Number: 930067336 doctorate, he again looked at the offerings from the same schools. “One of the key factors in my decision was my MBA experience at Durham. I liked the small city experience and living at Ustinov College back in 2006. It gives a sense of community where people still acknowledge each other and that worked well with who I am. With the Durham Steven began YLED to inspire DBA I have been able to return to this beautiful an entrepreneurial city for my last taught modules and I hope to spirit in schoolreturn with my family.” age young people

in South Africa. Tebang Ntsasa |065 911 4405 | tebang@yled.co.za | info@yled.co.za | www.yled.co.za

Durham University Business School / IMPACT

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My Durham Masters: football, finance and the global economy We chat to alumnus Matthew Bainbridge about his postDurham career and his thoughts on the impact of the current economic climate.

riginally from Liverpool, Matthew Bainbridge left home aged 16 and moved to Lancaster to study and play football full time. He then crossed the Atlantic to complete his undergraduate degree in South Carolina, USA, as a student athlete on the men’s ‘soccer’ team. Matthew double-majored in Supply Chain Management and Economics, before returning to the UK to graduate with Distinction in MSc Finance (Economics and Finance) from Durham University Business School. Matthew shares his story so far.

Why did you choose to study at Durham University Business School? Upon completing my undergraduate degrees, I was uncertain on the specific career path I wished to pursue but wished to continue both my academic and athletic development. Durham provided an opportunity to continue my academic development at a world top 100 university, whilst allowing me to continue to train and compete with the Men’s 1st university football team.

Where has your career taken you since leaving Durham? Since graduating from Durham I joined AlixPartners, a global consulting firm who assist large companies with their most critical challenges. As a consultant in their Turnaround and Restructuring team, we assist companies in the most urgent situations who are in financial distress; working together to help stabilise their finances and improve their operations to preserve value.

Tell us more about your role and what you enjoy? When assisting companies during their most challenging times, I’m able to appreciate the immediate impact of the work we complete. Many of the companies we work with haven’t previously found themselves in such financial distress, whereas my senior colleagues have worked with companies in such situations every day throughout their career. Throughout my role I’ve had exposure to a variety of industries, from European telecommunications to global energy marketing. I enjoy the cliché that no two days or foci for analysis are ever the same.

What impact are you seeing from the current economic climate? Despite what sound reasoning would suggest, the number of large UK companies who’ve completed a restructuring process since the start of the pandemic is at a historically low average. A combination of factors such as government support, rent moratoriums and surplus liquidity in the market has resulted in a reduction of restructuring activity. As the restructuring industry has a natural lag to financial crises, firms in the industry are gearing up for expected busier periods ahead as cash stockpiles are whittled down in the face of rapid cost inflation in the wake of the global pandemic.

Finally, tell us how Durham helped you on your career path? Having studied in the USA, my understanding and experience of UK universities was limited to say the least. During my first term I found myself readjusting to the UK; the weather was different, the teaching methodology was different and the academic standards were also different. I found Durham pushed and developed my academic standards beyond the level I had previously accepted. Although at times the course was challenging, completing my MSc provided me with a newfound confidence in my academic abilities. For more information on the School’s range of Masters programmes, visit durham.ac.uk/business/masters

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Engagement

The return of in-person international study tours

urham Masters and MBA students have the exciting opportunity to visit international businesses abroad and learn more about the global marketplace. Jamie Weston, Administrator with International, Engagement and Careers, shares how students are benefitting again from in-person study trips. After two years of delivering our international study visits virtually, in 2022 we successfully completed our Masters and MBA visits in person to six destinations across Europe and the US. Over 190 of our postgraduate taught students took part in the international study visits, which were focused on Management, Marketing, Finance, and Global Business Experience. This year’s students travelled to Stockholm, Athens, Paris, Mannheim, Lyon and San Francisco. Following a highly competitive round of applications, the students visited international organisations, immersed themselves in local business culture and gained a critical awareness of the complexities involved in operating in the global marketplace. Through this experiential learning, the students worked hard to enhance their employability skills and gained an insight into practical organisational systems, putting their theoretical learning to the test.

The study visits are a crucial aspect of our strategy, particularly in terms of Internationalisation and Student Experience, and offer our students the opportunity to develop themselves further, both academically and as global citizens. Students on some of the visits were also given the opportunity to network with Durham Alumni, learning from their experience and expertise based on their careers after graduating. MBA students’ international study visits to Mannheim, Lyon and San Francisco included visits to companies such as Sanofi, European Central Bank, Intel, BASF SE and Siparex. Students on our MSc international study visits also met a wide range of companies, such as Hewlett Packard, Volvo Cars, Banque De France, Fjallraven Kanken, TAE Aviation Academy, Einride and CryptoAssets Institute (France). The trips were a resounding success, with student feedback praising the hard work and dedication of our partners, the companies, and the Business School for making this possible after two very challenging years. We would also like to take the opportunity to thank all our students for their dedication to the visits and wish them all well for their future careers! For more information on the School’s MBA and MSc programmes, visit durham.ac.uk/business/programmes

I’d like to thank Durham University Business School for their efforts in organising this trip, especially amidst changing travel regulations, in a world just coming back to normalcy. It was truly an unforgettable, oncein-a-lifetime experience, both professionally and personally! Sumedha Cavale MSc Finance

Durham University Business School / IMPACT

“For the international business trip I visited Mannheim. This was an excellent opportunity to gain insight into the German economy and culture. The lectures delivered at Mannheim business school were fantastic with excellent guest speakers, alongside company visits and cultural tours. I realised early on in the trip how little I really knew about German business culture and returned to Durham with new knowledge and skill sets that will only benefit me in my future career.” Stephen Mills MBA (Full-time)

1. MBA company visit to Intel, San Francisco. 2. MBA networking session, emlyon business school, France. 3. MBA students, Mannheim Business School, Germany.

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An unforgettable experience in Stockholm The School offers a range of international study opportunities, including Stockholm, Athens, and Paris. Current MSc Management student Xinghua Tong reflects on her five-day study trip to Stockholm earlier this year.

’m a student who’d worked for several years before coming to the UK for a masters degree, so my expectation of studying at Durham University Business School was high. Fortunately, my participation in the MSc Management programme confirmed I’d made the right choice, especially with the unforgettable experience of engaging with the International Study Tour module.

Enhancing both knowledge and skills The Study Tour not only enriched my studying experience, but also accelerated my understanding of what I’d learnt from other management and marketing modules. Previously, I’d learnt a lot of theoretical business knowledge and skills through taught modules like Strategy, Consulting and Economics. As an international student, I worked hard to absorb these analytical and strategic tools, but was still not assured of my ability in business practice for my future career. Thankfully, this module alleviated my worries about how to transfer this knowledge into my own practical use through a consulting project with Volvo around a new service offer. Throughout the six weeks, my dedicated group members analysed Volvo’s marketing position and capability following many different academic models such as Five Forces, PESTEL and VIRNE to investigate potential problems and opportunities.

Durham University Business School / IMPACT

With the guidance of our module's extremely knowledgeable and supportive leader, Associate Professor Zsófia Tóth, we enthusiastically proposed strategies in both sales channels and digital marketing. Despite having previous experience, I was still excited and proud while presenting our work at the Volvo Innovation Center. This was my first time working together with a group of people from western countries, which made me think more reflectively and cooperatively. Our group members communicated with each other with very inclusive minds, so, my sincere thanks to them (Miles MacLachlan, Gabriella Cairns, Benedict Rotchford, Mengyue Chen).

Fantastic learning tour in Sweden Alongside the project with Volvo, we also visited several successful companies in different industries, including HP, Husqvarna, Fenix and Einride, which significantly helped us expand our horizons in global business. For example, Fenix, an outdoor products company, has developed a variety of methods and materials to transfer into more sustainable production. Einride has already launched electric driverless trucks in Sweden. Furhat Robotics could even benefit human resource management by helping recruiters avoid unfair judgement like personal preference and emotional error. Communicating with these companies in person has widened our view of business in Europe and deepened our understanding of sustainability in contemporary company governance.

1. MSc Management Volvo studio visit, Stockholm.

I’m very grateful for our International Study Tour Team, especially Jamie Weston and Leigh Woods, who coordinated the trip to Stockholm. Our trip was perfectly designed, and even though the itinerary was full, we still had some time to view the city with a local guide. Together with her for five days in Stockholm, we learnt a lot about local culture and heard some interesting historical stories. Overall, the International Study Tour in Sweden has broadened my view of global business and left a golden memory in my studying life. Although the study visit was several weeks ago, the experiences of that trip are still vivid in my mind, as if I’m still talking and laughing with those lovely people. In other words, it really is one of the best experiences I’ve ever had in my academic learning.

The Study Tour not only enriched my studying experience, but also accelerated my understanding of what I’d learnt.

For more information on Masters programmes, visit durham.ac.uk/business/masters

2. Group welcome dinner, Urban Deli, Stockholm. 3. Guided tour, Old Town, Stockholm.

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News and events

Business School and MBA rankings stay strong The Business School and its MBA programmes have continued to perform well in three key global rankings.

n November, the Durham MBA (Full-time) was placed in the global top 10, Europe top 5 and UK top 3 in the Corporate Knights Better World MBA Ranking 2021. This is an increase of 19 places globally, 5 places in Europe and 4 places in the UK since the ranking in 2020. This ranking specifically focuses on and evaluates the extent to which programmes integrate sustainability knowledge and skills into business education. Information used to rank business schools across the globe includes the modules taught as well as the diversity of faculty, research and research centres. Professor Amir Michael, Associate Dean for MBA and DBA Programmes, said: “This fantastic achievement demonstrates that the Durham MBA is continuing to develop in line with students’ expectations and to equip them to lead in the accelerating business environment. The significant increase in the School’s position in the rankings this year demonstrates our strong focus on the key themes of internationalisation, social responsibility and ethics, which run throughout the programme.”

Durham University Business School / IMPACT

Global

Europe

TOP

10 *

*Corporate Knights Better World MBA Ranking 2021

This was then followed in December, by the School being ranked in the European Top 50 in the Financial Times European Business School Ranking 2021. The School was positioned 45th overall in Europe – an improvement of three places from 48th in 2020 – and was also placed 11th in the UK. This ranking lists the best business schools in Europe based on the combined performance of programme-specific Financial Times rankings, including the MBA and MSc Management. Durham’s position was determined by the 2021 Financial Times rankings for MBA programmes and MSc Management programmes. Finally, in March, the Financial Times Online MBA Rankings 2022 were released where the Durham MBA (Online) was once again ranked in the Top 10 globally. We were one of only four schools to be ranked in the Top 10 for each year since the ranking’s 2014 inception. The Durham MBA (Online) was placed 7th globally, 5th in Europe and 3rd in the UK. In this prestigious ranking, the programme was also placed 2nd globally for both value for money and international mobility. Value for money is calculated by looking at the current salary of graduates today, course length, tuition and other costs. The average salary figure (three years after graduation) is $161,214.

International mobility shows how the Durham MBA (Online) supports career progression around the globe, as it measures the extent to which alumni’s citizenship and work locations pre-MBA differ upon graduation, and three years afterwards. To come second in the world for this measure, in such a competitive ranking, proves the international focus of our programme and the ability it gives students to adapt and progress in their careers, whether it be in their role, industry or location. The quality of the Durham MBA (Online) was further highlighted by the diversity of the School’s International Advisory Board, being placed =1st for gender balance and 3rd globally for international members of the Board. The programme is also ranked 3rd globally for international members of faculty, which is the percentage of faculty whose citizenship differs from their country of employment. The global and diverse spread of our students, alumni, faculty and International Advisory Board members ensures that Durham MBA graduates are fully integrated into today’s business world. It’s becoming increasingly important for business leaders to recognise the complex ethical and social factors which surround them. The knowledge and skills our MBA graduates have enables them to understand how to make operational and strategic decisions in a globally challenging business environment. Read all about Durham University Business School (durham.ac.uk/business/about) and the Durham MBA programmes (durham.ac.uk/business/mba).

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News and events

A research environment supporting excellence – Case studies from the Research Excellence Framework (REF) 2021

urham University Business School is proud of its academics’ research achievements in the latest Research Excellence Framework (REF). The REF is a research impact evaluation of British higher education institutions. The results of REF 2021 were published in May 2022 which showed that the Business School’s:

The following is an overview of the School’s excellent REF 2021 research:

The Sustainable Development Goals (SDGs) and value creation for organisations - Professor Carol Adams

RESEARCH POWER IN IMPACT IS RANKED

RESEARCH IS ALL RATED

4 3 13 *

This means the quality of all School research is worldleading, or internationally excellent, in terms of originality, significance and rigour. RESEARCH POWER IS THE

biggest increase across the whole sector.

The increase in ranking is the highest in the Russell Group.

RESEARCH POWER FOR OUTPUT IS THE

highest increase across the whole sector.

Our academics research a broad range of timely and important topics across Accounting, Economics, Finance, Management and Marketing. The School also has a strong Ethics, Responsibility and Sustainability (ERS) research agenda focused on business ethics, poverty and precarious work, and sustainability.

This research looks at how the achievement of the United Nations’ (UN) SDGs requires a shift in capital allocation (how finance is invested). It also investigates how sustainable development issues give rise to new risks (and opportunities) for businesses. It emphasises how the integration of sustainable development into corporate reporting can lead to greater overall value creation. This research has impacted changes in policy and regulatory body guidance that have led to increasing emphasis on SDG reporting and a broader view of value, changes in reporting practice and the strategy/approach and changes in university reporting and approach to value creation and measurement. Impact has also been seen through the take-up by significant organisations including the Scottish Environment Protection Agency, KPMG, the International Integrated Reporting Council (IIRC), the Association of Chartered Certified Accountants (ACCA), the Chartered Accountants of Australia and New Zealand (CAANZ), the Institute of Chartered Accountants of Scotland (ICAS) and the United Nations Development Programme (UNDP).

*Corporate Knights Better World MBA Ranking 2021

Durham University Business School / IMPACT

Supporting the development of New Business Models and company strategy using a smart road-mapping toolkit Professor Kieran Fernandes

Developing policies on Islamic financial architecture and the role of Islamic finance in sustainable development Professor Habib Ahmed Professor Ahmed’s research and expert engagement with several high-profile international multilateral institutions has led to the production of policy documents on Islamic finance that have been used by organisations for their member countries in two broad areas. The first area is informing policy recommendations on enhancing the role of Islamic finance in promoting the SDGs for organisations such as the UN and Islamic Development Bank. Ahmed’s research identifies ways in which Islamic finance can contribute to the achievement of SDGs. The second is through providing a policy framework for developing the national and international financial architecture for the development of Islamic finance for the Standing Committee for Economic and Commercial Cooperation of the Organisation of Islamic Cooperation (COMCEC). Recommendations from this research helped develop the Shariah governance framework and liquidity infrastructure for the Islamic banking industry in Turkey.

This research has impacted changes in policy and regulatory body guidance that have led to increasing emphasis on SDG reporting.

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This research into the analysis and re-engineering of a complex, commercial supply chain networks has realised new business opportunities worth more than £800 million. A road-mapping toolkit developed by the School and adopted by NG Bailey, one of the UK’s leading engineering companies, has had a transformational impact on process and decision-making within the business and across its supply chains. The impact of the toolkit, developed as part of the ‘Customer of Choice’ strategic supply chain initiative, has been far-reaching. More than 300 companies in NG Bailey’s supply chain have used it to benchmark, re-engineer and improve operations, reducing product development time by more than 40% and accessing a wealth of new revenue.

Changing audit and accountability arrangements in English local government: enhancing resilience and value for money Professor Laurence Ferry Research into public sector audit and accountability has significantly changed UK government thinking and policymaking and has in turn enhanced public accountability of local government spending. Professor Ferry’s work with the House of Commons (HoC) Housing, Communities and Local Government Select Committee (HCLG) was followed by the Government ordering a major review of the Local Audit and Accountability Act 2014. The review by Sir Tony Redmond, the only high-level review in recent years focused on public sector audit and financial reporting, engaged Ferry as a central part of the Steering Panel and contains many final recommendations based on his findings. The Redmond Review’s report, published in September 2020, called for a comprehensive overhaul of the current regulatory arrangements including primary legislation to establish a “new regulatory body responsible for procurement, contract management, regulation, and oversight of local audit”. The UK Government are already in agreement with 60% of the recommendations; most of the remaining recommendations are still being considered.

The UK Government are already in agreement with 60% of the recommendations.

News and events

Financial literacy as a national strategy Professors Dennis Philip and Panayiotis Andreou

Improving wellbeing and service behaviour in policing Professor Les Graham In six years, the Durham University policing research project has expanded rapidly from impacting a single police force to involving all 43 Home Office police forces within England and Wales, the Police Service of Northern Ireland, the British Transport Police and the Ministry of Defence Police. The underpinning research has had significant and extensive impact on working practices, procedures and policies within forces, implemented to achieve improvements in police officer and staff wellbeing and their service behaviour (e.g., reduced levels of exhaustion and fatigue and increased levels of work engagement, process improvement activity and discretionary effort both to serve the public and to fight organised crime). This has not only benefited the police officers and staff employed, but also the communities they serve. The research has also had direct influence on the Home Office Front Line Review of Policing Recommendation Report (July 2019).

Researchers at the Centre for Banking, Institutions and Development (CBID) at the Business School have undertaken important research to understand the many sides and roles financial literacy has in a household’s financial behaviour. Following successful research into financial literacy across The research provided India in 2016, the research the much-needed has now focused on Cyprus, evidence base to enabling the introduction initiate a new policy of several financial literacy agenda by the programmes and has set the policy Cyprus government. direction on financial education for the first time in the country. The research documented primary scientific evidence on the extensive problem of financial illiteracy among Cypriots, made even more important following a deep local banking crisis since 2013. The findings were discussed at three high-level policy gatherings at the Central Bank of Cyprus (CBC) and were extensively covered in the media, leading to widespread initiatives and grassroots-led development across the country. For the first time, commercial banks are offering financial literacy training to clients, a local municipality are offering public courses, scientific associations and the Ombudsman have started financial awareness programmes and the Cooperative Central Bank are sponsoring PhD studentships in financial literacy. Additionally, the research provided the much-needed evidence base to initiate a new policy agenda by the Cyprus government.

Modelling the impact of future trade agreements on the United Kingdom’s Economy - Dr Anamaria Nicolae and Dr Michael Nower Dr Anamaria Nicolae and Dr Michael Nower, researchers at the Centre for Banking, Institutions and Development (CBID) at the Business School, have undertaken research regarding the implications of various Brexit-related trade scenarios for the UK’s economy. This research has had a significant impact on Bank of England analysis, parliamentary scrutiny of Government activity and policy, and the business community. Specifically, the research has provided a bespoke macroeconomic model that was used in the Bank of England’s EU withdrawal scenarios and monetary and financial stability: A response to the House of Commons Treasury Committee’ report. It also impacted the voting decisions of UK MPs in their votes on the ‘indicative vote on No Deal’ and ‘Benn Bill’ in the House of Commons, as well as influenced the work of the International Trade Select Committee and other parliamentary bodies on several Brexit and trade-related publications.

Durham University Business School / IMPACT

Consumer data analytics, behavioural profiling and intervention Professors Sarah Xiao and Mike Nicholson Two international marketing agencies have benefitted from consumer behavioural profiling and impulse buying research, enabling them to build novel marketing tools resulting in significant financial gains through collaborative research projects. DECIDE (Brand Consultancy Company) and KHWS Ltd. (Brand Commerce Agency) occupy Top 50 rankings within a sector of around 23,000 agencies, with a combined client base of around 400-500 active brands at any given time.

The two companies had additional, direct revenues of £1,467,000.

The implementation of stakeholderdriven supply chain integration Professors Christos Tsinopoulos and Nick Ellis This research has enhanced supply chain management (SCM) for several UK firms and included large firms and small to medium-sized enterprises (SMEs) in the manufacturing sector, not only impacting them directly but also having a further positive impact on suppliers and customers in their respective supply chains. The research fell into the two closely linked areas of supply chain integration and businessto-business (B2B) marketing. It explored how integrating processes for developing new offerings and planning production could improve organisational performance. Results have meant organisations have been able to engage with their supply chain partners and improve their performance. This is through better idea generation for new product development (NPD), greater effectiveness of shared processes across the supply chain, identifying and mobilising partners to contribute value to customer solutions, and the development of a data classification policy to coordinate different elements and parts of the supply chain. From this research a high number of manufacturers received detailed researchled guidance on improving their supply chain integration practices. Also, two organisations the research team engaged closely with significantly improved the processes used to manage their supply chain relationships. For one company, turnover increased by approximately 28% and staff headcount increased by 50% in two years.

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For one company, turnover increased by approximately

28% AND and staff headcount increased by

50% IN TWO YEARS

This research provided these companies with an improved approach to market research, new marketing toolkits that allow them to access potential clients in a scientific (evidenced) based way, and financial gains. Between January 2015 and March 2019, the two companies had additional, direct revenues of £1,467,000, and there is expected to be a further £1,500,000 of revenue for KHWS. To place these increments in context, at the time of the project, both agencies were generating annual sales revenues of around £10m from with less than 100 employees each. Moreover, DECIDE was North-East based and has subsequently established a successful footprint in central London, and KHWS used the tools developed to move from a purely European focus to one with a still-growing presence in the Middle East.

View all the Business School’s REF case studies in detail at durham.ac.uk/business/research/ref-2021 Read Professor Xiao’s article on consumer behavioural profiling on page 32.

News and events

The return of celebrating congregation in person! Following the postponement of congregation over the past two years as a result of the Covid-19 pandemic, this year saw the return of our winter congregation at the start of April.

hilst many students have been awarded their degrees in absentia over the last two years, the winter congregation allowed the School to invite students who’d missed out to our first in-person graduation. The day allowed graduates to experience the fantastic atmosphere of the Castle and Cathedral and return to the Business School for refreshments and to catch up with fellow alumni and staff. In fact, Professor Susan Hart delayed her retirement to attend the congregation and celebrate the students’ success. At the time of writing, the summer congregation is being planned and due to the number of students wanting to complete their Durham experience with this unique celebration, it has been extended across two weeks to accommodate the demand. As you can see from the photographs taken at the spring congregation, the return of

graduation events presented the opportunity for graduates to be awarded their degree in person in the awe-inspiring setting of Durham Cathedral. Following the retirement of Professor Hart earlier this year, Durham University Business School’s Interim Executive Dean, Professor Kieran Fernandes, will be attending the summer events. Graduates will now join the Durham University Business School alumni family of over 38,000 former students from over 140 countries. As one of the oldest established UK business schools (1965) this also includes over 6,500 MBA alumni. Overall, they join the 140,000 graduates of Durham University, and now have access to an active alumni community with chapters they can join and network with across the globe.

Everyone was very nice and made you feel very special, especially after a two-year wait... It was just magical.

Our graduates celebrating at the spring congregation.

Durham University Business School / IMPACT

Graduate reflections "When I was student at Durham University studying Finance and Economics, I enjoyed quite a few things. I found the whole college thing quite exciting and interesting because I come from a different country... At college it’s kind of like a family, it’s got a family vibe and you find friends and have lots of college events and that creates a unique atmosphere where you feel welcome, and people are always there to help. It’s amazing." Anastasia Kartashyan MSc Finance (Economics and Finance)

"The International Business programme was one of a kind. It was that global experience I wanted. Throw yourself into it! It’s a really great experience, you get to meet people from all over the world and I think it’s a really special time so just make the most of it." Julia Chatfield Conroy MSc Management (International Business)

"The highlight of my time here has been making friends with people from different parts of the world. I got along with my classmates so well, I got an opportunity to represent them on the student board as a representative of the student body and just being here with the staff at Durham, amazing people, always ready to help you. That for me has been the highlight." Omololu Ibhahulu MSc Marketing

"I work in communications and was often asked for my views on different matters, and I sometimes felt like I was ill equipped to help answer questions around mergers and acquisitions or financial regulatory matters and things like that. So, I really wanted a degree, an MBA, that gave me that global understanding of the issues that a large entity would face. I knew it was a great place to study and a fantastic city, so I thought, yeah, let’s go for it. The Durham MBA gives you a lot of flexibility in the way that it’s structured so that you’re only really studying one module at a time. And also, the programme is designed around people having lives..."

"We managed to visit San Francisco, which was fantastic. We did things like design-led thinking and we went to the company, Cisco. We also had a pitch competition. My idea for the pitch competition was based on a transport ticketing blockchain idea, which actually won and I've now developed the company since that and that’s becoming quite a big success now. One of the other highlights for me was being able to come to Durham to actually do a module in person. And that way I got to meet a lot of the cohorts and people from all around the world that I’d been working with virtually." Erica Vincent Farquharson MBA (Online)

"Durham is such a reputed, well-known University and it seemed quite magical-looking at it from afar, so I wanted to be part of that environment. I think it was a very enriching and enlightening academic environment to be in. I really enjoyed the speech of the Chancellor. Everyone was very nice and made you feel very special, especially after a two-year wait. At one point I looked around and felt like I was in Harry Potter. It was just magical. It was wonderful and my family’s flown in from India, so it was a wonderful experience for them. So, I’m really happy that I could be a part of it." Dr Paroma Bhattacharya PhD (Management)

"Apart from graduating, the highlight of the programme was meeting people. We were in cohorts, we worked in cohorts, and we made friends for life. I’ve met some of them today, and it’s great, it is the people. We learned a huge amount together but it’s the lasting friendships." Dr Tom McDonogh Durham DBA

For more photographs taken at the congregation on 1 April 2022, visit flickr.com/photos/dubsalumni/albums

Danielle Phillips MBA (Online)

Issue 11 / 2022

News and events

Our events We’re delighted to have hosted several exciting events since the last issue of IMPACT. Here are just a few.

MBA alumni return to Durham to celebrate their (delayed) 20-year reunion On Friday 10 June, Durham MBA graduates from the School’s 2000/2001 cohort reunited for their delayed 20-year reunion at the Business School. Professor Amir Michael, Associate Dean for the School’s MBA and DBA programmes, welcomed the alumni who had travelled not only from across the UK but also from Switzerland, Nigeria and Iceland. Dr Rebecca Stratling, Associate Dean (Accreditations & Quality Assurance) and Dr Peter Hamilton, Associate Professor in Human Resource Management, attended to reminisce with the graduates as well as the Alumni team, Penny Hawley and Matteo Lai. Current MBA student Ronan Murray was on hand to compare notes on how the programme has developed over the years, as well as to show our MBA alumni how the Business School building, while retaining the same frontage, has developed particularly during the 2013 rebuild to reflect the growth of the School.

Thoughts on Durham and the MBA: Reunion organiser and alumna Marija Huljak commented: “Some people I met here during my MBA became friends for life and it is amazing that we have stayed in touch for more than 20 years, visiting each other, meeting in different places around the world, and keeping that friendship and support over time. That’s why reunions are so important and so special — they are opportunities to catch up regularly, and share news, experiences, and successes.” Professor Amir Michael reflected on the changes and the similarities saying, “We are delighted to see our alumni at the Business School again. While we develop the MBA programme every year to encapsulate new knowledge, there are some core aspects of the Durham MBA that we continue to build on. I was struck how even 20 years ago our students were internationally diverse, and I was impressed by the strong women leaders our programme has produced. It was inspiring to hear first-hand how their time in Durham has inspired them to go on to start and shape businesses around the world.”

Professor Amir Michael welcomed the alumni who had travelled not only from across the UK but also from Switzerland, Nigeria, and Iceland.

Durham University Business School / IMPACT

International, world-class scholars share their expertise The Department of Economics and Finance hosted world-class, international scholars from elite universities in the US to give seminars in December 2021. IMPACT 10 had gone to print before the series had been completed and so it’s still timely to illustrate the School and the Department's excellent connections in this issue of IMPACT dealing with world economy. Examples of the high-profile scholars delivering the seminars include the editor of the Journal of Economic Theory, Professor Guillermo Ordoñez from the University of Pennsylvania as well as other professors from Wharton, Cornell, Princeton, MIT Sloan, Columbia, Chicago Booth and NYU Stern sharing their latest research outputs. Seminars covered important topics including fintech, equality issues in bank lending, market movements during Covid-19, climate change and finance. Despite the pandemic, the internet and social media helped to maintain an excellent stream of academic events and interaction. With the Department’s seminars having moved to Zoom, this allowed the organisers to invite more speakers from the US without cross-continental travelling.

International Banking Forum is a success The Business School’s Centre for Banking, Institutions and Development (CBID) hosted the bi-annual Central Bankers’ Forum virtually towards the end of 2021. A key event in the Centre’s long-established calendar of activities, four speakers present their current research findings on key topics related to central banking policies and regulation. Professor Refet Gürkaynak, Bilkent University, opened the forum with his latest paper asking ‘Do we really understand how macroeconomic news moves interest rates?’ The author of several influential articles on the relationship between asset prices and monetary policy, his research proposed a semi-latent factor methodology that allows for the measurement of news and noise components from yield curve movements. Kasper Roszbach, Research Director at the Norges Bank, presented his research on how households’ accumulation of debt impacts job market outcomes such as job searching, starting pay, switching into new occupations and job tenure. His paper exploits a macroprudential policy implemented in Norway to prevent substantial disruptions in credit necessary for stable economic growth, and draws out policy implications on how to reduce the constraints that leverage imposes on the workers. David Elliott, Bank of England, presented his research showing how US monetary policy

Issue 11 / 2022

The seminars help build a bridge between top international institutions and research scholars.

Led by Professor Angel HernandoVeciana and Dr Xian Gu in 2020-2021 and Dr Xian Gu and Dr Nikos Paltalidis in 2021-2022, the seminars help build a bridge between top international institutions and research scholars. Often the one-to-one meetings with speakers after the seminars led to the exchange of new ideas and possible future collaboration. An example of this was the seminars where Drs Gu and Paltalidis met with the speakers from MIT Sloan and Columbia Business School to further discuss related research questions around shadow banking and bond markets.

affects lending to non-US firms by ‘nonbanks’, relative to banks. This research shows that nonbank lenders tend to significantly increase their supply of dollar credit to non-US borrowers, relative to banks. In this way, nonbanks are acting as global shock absorbers, partially mitigating the negative effects of US monetary policy shocks. Florian Heider, European Central Bank, is well known for his work on bank capital structure and the effects of negative interest rates. The research paper showed, for the first time, that a negative interest rate policy does not fully mitigate the supply of credit to the economy. His talk pointed to previously unobserved interactions between crises, banking, and monetary as well as fiscal policy. The virtual forum was attended by policy makers from the Bank of England and researchers internationally.

It was inspiring to hear first-hand how their time in Durham has inspired them to go on to start and shape businesses around the world.

Doctorate in Business Administration (DBA programmes) Pursue the highest level of critical thinking through our DBA programmes. Three distinct DBAs offered by Durham and jointly with world-class partners emlyon business school, France and Fudan University, Shanghai, China.

ENQUIRIES E: business.dba@durham.ac.uk Zoom calls available upon request.

Each distinctive programme offers an international opportunity for learning across all kinds of boundaries (geographical, cultural and disciplinary) and to making an impact to professional practices and companies worldwide. To find out more, visit durham.ac.uk/dba