January 2008. By Santiago Iñiguez de Ozoño, Dean, IE Business School.

Firms are facing a raft of changes brought about by the tension between globalisation and diversity, which could generate new sources of business.

One of the most famous sentences attributed to Heraclitus, the flagship philosopher of ancient Greece, is “everything flows, nothing stands still”. To illustrate his statement, he explained that nobody can bathe twice in the same water of a river because the current flows constantly. Similarly, the circumstances that surround us are constantly changing, in the same way that nature and our very lives change. Indeed, the phenomenon of change is a reality and represents the starting point of the strategic analysis of business. Strategists explain that enterprises do not operate in paradigmatic environments, where the references are static (e.g. the field of exact science), but rather they operate in changing environments, which justifies the need for frequently reviewing the strategy of any business and the suppositions on which it is based.

One of the aims of business schools is to train managers and entrepreneurs to understand the phenomenon of change and know how to adapt and take advantage of the business opportunities that arise from it. Today, the IE Business School Annual Alumni Conference is being held in Madrid under the title of “Managing a changing planet”. During the day, which is to bring together 1500 executives and entrepreneurs from 30 countries, the participants will debate on some of the matters which will most probably affect business activity in the coming years. They will lead to important business opportunities, such as new energy sources, the need for exploiting natural resources in a framework of sustainability, the challenges facing demographic development and the new world order that will come from the tension between globalisation and diversity.

In relation to the first of the matters mentioned above, the energy sector has become the most strategic sector and one of the priorities of many countries´ economic policies. In view of the increase in oil prices, which, according to most analysts in the sector, will reach $100 per barrel, the effective diversification of energy sources becomes a priority. Spain is one of the best-situated countries in the area of innovation in renewable energy sources and some of our enterprises lead world technology in the generation of wind and solar energy, an area in which investments and the development of public-private initiatives need to be continued. Furthermore, our country currently has one of the most competitive energy prices in comparison with other countries in the European Union, a factor that can distract the authorities and consumers from the need for adopting more radical measures to deal with future changes as a result of our energy dependence on the exterior and of the application of the Kyoto agreement. Within this framework, the debate on the possibilities offered by nuclear energy has been approached from a realistic and reasonably objective viewpoint. In addition, the safety conditions of nuclear power stations have increased ostensibly in recent years to the point where many champions of sustainability defend this source as a cheaper solution that is less intensive in natural resources and more in line with new environmental demands. Although the cost of installing a new nuclear power station is very high, its running costs are much lower than those of alternative power stations, making the price of this form of energy slightly cheaper than the energy generated from fossil resources or conventional electrical or thermal power stations. In view of these advantages, there is a priority for a state agreement that allows the possibilities of developing nuclear energy in our country.

The migratory movements within the framework of social and economic globalisation constitute another subject under debate today. Europe requires the flow of immigrants for its economic growth and for the renewal of its social structure. In particular, in Spain, immigration is particularly necessary, especially in intensive labour sectors such as tourism, which is of key importance for our economy. Furthermore, an appropriate work permit policy for highly qualified professionals will allow us to improve our capacity for innovation, something that is particularly critical when you take into account the voids in research and development in our country. One interesting example to be copied is the initiative implemented by Gordon Brown during his time as Chancellor of the former Labour government, whereby the United Kingdom opened up its employment market to all the graduates from the world´s leading business schools. This measure has strengthened British business centres as genuine talent magnets. However, in Spain, it is particularly difficult to hire highly qualified professionals from outside the European Union, something which frequently hinders the development of the management teams of our more global enterprises. Taking into account that we are one of the most attractive countries as a destination for senior European management, a measure such as that implanted by Brown would turn Spain into a genuine centre for attracting talent.

The best antidote against most of the challenges and diseases that affect the planet is good business activity. Innovation and the search for new business opportunities can offer a plausible solution for most of our problems and business schools are committed to training leaders and entrepreneurs that will find remedies for these problems. In our task, we have the support of the other players in society.

This article was published in the monthly IE academic newsletter IE Focus. To see the originally published article please click here.

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