Business schools are teaching a model of economics that is “obsolete” because it does not take into account issues surrounding climate change.
This is the view of Ebrahim Mohamed, director of education at Climate-KIC, a European Union-funded public-private partnership focused on addressing environmental problems.
Mr Mohamed, the former director of Imperial College London’s executive MBA programme, told Times Higher Education that climate change is a major part of the “future economy”, and business schools need to “fundamentally reorganise [their] curriculum on the basis of this new economy”.
“The core problem within the business school process is we’re using a model of economics that is a little bit obsolete. We don’t factor in ‘externalities’ – clean air, water and so on. These are natural assets that are not really accounted for in the conventional economic model,” he said.
“Business education needs to [have an] understanding of the evolving challenges that will affect businesses, giving business leaders a deep understanding of how to create business models and solutions that will be durable into the future. By solutions I mean climate-friendly innovation to address business challenges.”
He added that because business schools have been around for a long time, they are still entrenched in the, albeit very successful, “old economy” of “globalisation and [unsustainable] oil and air industries”.
“Promisingly, many business schools are already incorporating [changes] into the courses they offer,” he said. “[After the financial crisis] they’ve introduced, in the MBA curricula, modules on ethics and social responsibility; the earliest sign [of change].
“And now it’s moving more into the domain of new business opportunities being part of that framework.”
Mr Mohamed noted that one school cannot change attitudes, but through “co-opetition” – schools competing in business education but being open to collaboration – and experimentation, institutions can change their attitudes and be “at the forefront” of this new economy.
Climate-KIC, he said, offers schools the space in which to experiment. Their education partners, which include Imperial, the University of Oxford, ETH Zurich – Swiss Federal Institute of Technology Zurich and the University of Copenhagen, among others, are working “in partnership, exchanging people and ideas”, to change their mentalities around climate change and to think about their academic mission.
“If your value paradigm is financial, commercial and [MBA] rankings, it limits you,” he said. “[But] it’s quite difficult for a business school to just jump out there and say, we’re about climate and that’s what we’ll be. We offer a framework of de-risking their involvement and are working with them in partnership to understand pedagogic content and curriculum innovation [to promote change].”