Institute for Business in the Global Context

Where the World of Business Meets the World

Tag: Brexit

Fletcher Reads the Newspaper: Is Brexit a “house of cards” that threatens the stability of the world order?

The latest edition of “Fletcher Reads the Newspaper” tackled the thorny question: Is Brexit a “house of cards” that threatens the stability of the world order? After introductions by Bhaskar Chakravorti, Senior Associate Dean of International Business and Finance at The Fletcher School, and Lisbeth L. Tarlow, Chair of The Fletcher School Board of Overseers, the two debaters kicked off.

Lord Michael Dobbs Speaks to the Fletcher Audience as part of Fletcher Reads the Newspaper

Lord Michael Dobbs, introduced as “Westminster’s baby-faced hitman,” wasted no time attacking the premise of stability to begin with. He claimed global stability disappeared at least twenty years ago. The seasoned debater laid out the three-part argument that a) there is no stable world order b) the EU is the cause of instability and c) the EU failed the challenge of changing internally due to its undemocratic nature. Countering the common narrative that the UK left the EU for economic reasons, Dobbs insisted that the UK left to reclaim its sovereignty, which has been compromised by an “arrogant, authoritarian, inefficient, ineffective, and elitist” EU that refused to reform itself. According to Dobbs, the democratic deficit generated by decision-making in Brussels by unelected representatives is irreconcilable, and the EU itself is in danger of becoming a “house of cards.”

Dr. Amar Bhidé, after excusing himself for this “hopelessly mismatched debate” took a different approach, borrowing a page from British economist John Kay to illustrate the perils of Brexit using the example of regulation on jam. Bhidé demonstrated how the trade and safety regulations so lamented by the pro-Brexit camp in fact will not be eliminated by leaving the EU, and are actually made less burdensome by unifying standards across the region. He went on to extend the jam example to immigration, claiming that Brexit is really about the flow of people, which also will not end with Brexit and is arguably much more important to the economy than the flow of jam.

Watch the full debate between Lord Dobbs and Prof. Bhidé on the Fletcher School Facebook page

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Britain’s Digital Advantage

No wonder then that there is much anxiety among Brexit-watchers about the UK making a clean break and rejecting the ‘four freedoms’ that EU members enjoy − free movement of people, goods, capital and services. I would argue that there is a fifth freedom that negotiators ought to keep in their sights, one that may hold the key to re-balancing the terms of Brexit. This freedom has to do with the free movement of data.

Data matters because it is the fuel − and exhaust − of a critical part of the overall economy: the digital economy.

When one considers the digital economies of the UK and that of the EU, the latter would be losing a genuine star if barriers to UK-EU data flows were to be erected.

Read the full piece from Dean Chakravorti on the Chatham House website

Seize The Year: And Now For All The Non-Trump News Crowded Out in 2017

It is already the start of the third month of 2017. We have been so absorbed with the daily barrage of news from Washington DC and Mar-a-Lago, and news about news, both fake and real, that it seems all other headlines have been crowded out. So much else needs to be done in 2017 to create the headlines we would like to see in the months ahead. It is time to “carpe annum”, to seize the year.

No doubt, 2017 will live in the long shadow of 2016. We must also find ways to take stock and push beyond the shadows. Of the many from which to pick, we found 5 developments from the past year worth noting in its impact on our work ahead.

Read the full piece from Dean Chakravorti in Forbes

“The Inclusive Innovators” – Business & the SDGs

by Bhaskar Chakravorti

Read “The Inclusive Innovators: 10 Questions | 20 Business Leaders | 17 Sustainable Development Goals”

Inclusive business — the pursuit of opportunities in traditionally unattractive or currently unprofitable market segments – is, increasingly, a strategic imperative for companies. Foregoing such segments could mean opening the door to disruption and closing it to options for future growth; this is an especially crucial concern that relates to developing economies, which represent the world’s faster-growth markets over the long-term. The idea of inclusion encompasses being inclusive of future generations and, by extension, underscores the need for responsible stewardship of the environment, natural resources and supply chains. In other words, sustainability is integral to inclusive business.

Inclusive InnovatorsIn light of many of the dramatic political developments of 2016, such as the Brexit vote and the U.S. presidential elections, we can expect that governments of advanced economies will scale back their investments in international cooperation and global sustainable development, in favor of focusing on job creation at home. This will heighten the expectations from other sectors – the private sector, in particular – to step in and help fill the void. Pursuing business-as-usual objectives in parallel with inclusive business will require new models of innovation and partnership with other sectors. When successful, such “inclusive innovators” can pave the way for global growth, development and inclusive prosperity.

In January of 2016, the United Nations initiated a new global agenda leading up to 2030 through the Sustainable Development Goals (SDGs) launched in the fall of 2015. Unlike their predecessors, the Millennium Development Goals, the SDGs consider the private sector as an essential participant in the process. The initiation of these new goals presents businesses and other sectors with a unique opportunity to expand the cadre of inclusive innovators who can accelerate progress on sustainable development worldwide.

This report is the outcome of a year-long in‐depth research effort involving over 20 global companies spanning a broad range of industries, conducted by The Fletcher School at Tufts University. It is part of Fletcher’s Institute for Business in the Global Context research and conference initiative on inclusive growth.

The report is the third in a series. The first report, “Growth for Good or Good for Growth,” analyzes the drivers and barriers affecting the practice of inclusive business activities within a wide range of businesses; the second report, “Inclusion Inc.” shared perspectives on operationalizing these activities and outcomes of live problem-solving in a major conference held at The Fletcher School. “The Inclusive Innovators”, the third report of the series, applies the strategies, lessons, and insights from 20 well known global companies to identify ways in which businesses can leverage the SDGs to join sustainable business with sustainable development, as well as address several of the challenges that would need to be overcome.

We hope you will read critically, ask your own questions, challenge what needs to be challenged, and continue the discussion. Most significantly, we expect that this process shall have a positive impact on the actions that businesses and their partners take to improve the state of an increasingly fragile and divided world.

Read “The Inclusive Innovators: 10 Questions | 20 Business Leaders | 17 Sustainable Development Goals”

Brexit: The return of boundaries

The Brexit vote may not be the last nail in globalisation’s coffin, but it has ensured that the pallbearers have been set on high alert. Meanwhile, across the Atlantic, a despondent America considers a vision of the country modelled on a gilt-edged and inaccessible penthouse apartment on New York’s Fifth Avenue. After all, the promise comes from the owner of such a penthouse; Donald Trump intends to impose punitive tariffs, deny entry to Muslims and others deemed undesirable, while dismantling trade deals and security alliances. What is more, his rhetoric has struck a chord in America and beyond. Nativists sentiments, growing inequalities and a sense of insecurity about the disappearing middle-class dream is a dangerous mix when there are politicians who — to use my favourite example of madly mixed metaphors — are prepared to lead their countries off the edge of a precipice with their heads in the sand.

Read the full op-ed from Dean Chakravorti in The Indian Express

Fletcher Voices: On Brexit

With the United Kingdom greeting its referendum on the European Union with a resounding “Leave,” the sheer weight of the “Brexit” was felt at 10 Downing Street and on Wall Street, with shock waves quickly reverberating far beyond. From world markets to international security, geopolitics to national elections, uncertainty around the effects of the vote persist. Among many of the questions being asked there sits a single thread:

So what does this really mean?

At The Fletcher School, our faculty has grappled with its impact in a number of spheres. While the search for clarity goes on, looking at Brexit in the context of the world in which we live, and from a variety of viewpoints on campus, can hopefully shed a light on the referendum’s far-reaching implications.  Here’s what some of our faculty members – from those specializing in security studies to business innovation to international law – are saying about the current situation.


Faculty Voices

Dean James Stavridis

“The US must face the fact that the UK will likely be less of an effective and reliable partner in global affairs. The US-UK relationship is about to get somewhat less special, unfortunately.”

UK-US Special Relationship Shaky Following Brexit Vote, Financial Times

The United States and Europe will be confronted with a raft of bad news that goes along with [Brexit]: economic turmoil, a faltering British economy, a deeply weakened political entity in the European Union itself, the high chance of a Scottish departure from the UK, to name just a few of the challenges. The political and economic institutions of the West all seem worse off […].

The sole exception might be the military. Brexit, counter-intuitive as it might sound, will likely produce a stronger NATO.

Europe’s Loss Is NATO’s Gain, Foreign Policy
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Brexit Could Deepen Europe’s Digital Recession

Brexit, as the British referendum to exit the EU is widely called, has caused turmoil in politics and stocks and head-shaking among the UK’s partners. All of this, of course, comes on the heels of many overlapping crises afflicting Europe.

In addition to the ones regularly in the news, I have argued earlier in HBR that there is a fundamental crisis unfolding over the longer term: the continent is suffering from a “digital recession” – a loss of momentum in their evolution toward a digital economy. Of the 50 countries we studied using a Digital Evolution Index we created, 15 European countries have been losing digital momentum since 2008 and EU countries occupy the bottom 9 spots in our ranking of digital momentum .

With the UK at 34 out of 50, it is worth asking: what is the impact of the Brexit referendum on this already dismal state of affairs?

Read the full op-ed from Dean Chakravorti in Harvard Business Review

Brexiters are making a dangerous mistake in their argument for leaving the EU

An essential claim of UK campaigners who want to leave the European Union is that the country could negotiate the same access to European markets from the outside as it now has from the inside.

This is a dangerous folly.

Read the full piece from Prof. Bhide at Quartz