SDG 8 and COVID-19

A critical perspective on growth to be discussed in the Deans Cohort

By Hanna-Leena Pesonen

Hanna-Leena Pesonen is Dean of Jyväskylä University School of Business and Economics. Follow her at @HLPesonen

As the COVID-19 pandemic has, at least temporarily, hit the world economy exceptionally hard, economists are debating the shape of the much expected recovery (will it be U, V or W and how steep or not?), and the world is anxiously waiting to see growth. At the same time, while we are facing the immediate problems the economic downturn has created, we have witnessed some of its positive consequences. In her piece in this same blog, Julia Christensen Hughes writes about the joy and possibility of environmental regeneration, such as blue skies and clear waters in areas, where people have not been able to enjoy these for ages.

Implicit in these framings of the economic crisis due to COVID-19 is an expectation of the future where we wait for economic growth. Would this also be the time to start questioning the nature and quality of growth? Two recent examples point to where this conversation is underway.

The recent article by Menton et al. (Sustainability Science, 2020) claims that there is an inherent contradiction in the focus of the UN SDGs on economic growth, which has been shown to lead to extensive environmental degradation, loss of species, as well as damage to health and well-being. They see including economic growth as a goal in the SDGs problematic, and call for attention on this “elephant in the room” — the failure to go beyond GDP.

In his call for A Bolder Vision for Business Schools (HBR, 2020), Dean Peter Tufano points out that the traditional business school model is looking dated. He talks about business concepts and frameworks, which need to be questioned and redesigned for businesses and business schools to remain a “force for good”, such as competition as the dominant driver and stakeholder capitalism.

Business schools have a central role and opportunity to redesign a more sustainable model for economic growth. This is a huge task for business schools challenging us with a paradigm shift both in research and education. Some of the core questions when exploring sustainable growth in business research and education include:

Is sustainable growth possible? Or should we accept that we need to shift our economic paradigm to sustainable degrowth instead, as e.g. Menton et al. propose?
Resource decoupling and sharing economy are some of the potential frameworks supporting sustainable growth. Empirical research is needed to understand, if, how and in which circumstances they can generate sustainable growth.
How to fight the negative rebound effects, which are often linked to resource decoupling or sharing services, i.e. inducing more consumption and negative impacts elsewhere?
What steps need to be taken by businesses and societies to transform to sustainable growth?
How should we measure sustainable growth? Instead of focusing on GDP, what could be alternative indicators measuring e.g. well-being or happiness?

During the latest GRLI AGM meeting in Lisbon last November, we had some discussion with a few colleagues on the concept and wider sustainability implications of economic growth and whether and how we as business schools should address this challenge. The current economic crisis brought by the COVID-19 has made this topic even more essential. The task of balancing economic well-being with the burning sustainability challenges we should solve in the next decades will not be easy.

I believe this is the time for us as business school leaders to start looking at the elephant in the room — the paradigm of growth — eye-to-eye, exploring it with care and curiosity. Maybe the elephant is better somewhere else and we need a new pet in our house. If you wish to join me, I look forward to starting this exploration together with you during the upcoming GRLI Deans & Directors Cohort.