When it comes to economic growth, the conventional wisdom is that a finite world of finite resources cannot support indefinite growth. A 1972 study titled The Limits To Growth was commissioned by the Club of Rome to investigate the possibility of exponential economic and population growth built on a finite supply of resources.
The outcome of the report, one that many believe was true at the time and holds even truer today, was that the Earth’s interlocking resources — the global system of nature in which we all live — is likely unable to support present rates of economic and population growth much beyond the year 2100, if that long, even with advanced technology.
And yet, Insead dean Ilian Mihov says that growth has “no limit” — a statement that he readily acknowledges can be “controversial”. His argument against the limitations of economic growth is that innovation, which he believes can circumvent the finite nature of physical resources, is limitless.
According to Mihov, so long as there is a market for a natural resource, when it begins to be depleted and prices start to increase, the search for alternatives will begin. “The Club of Rome projected at the world’s level of oil consumption [in 1972], we would run out of resources by 1991,” he says. “Since 1972, the world has massively increased its consumption of oil, and today, we have more proven oil reserves than before.”
“We can substitute almost anything with other things, which we’re learning as we develop new sources of energy. Growth, especially for high income countries, is driven by innovation — by new ideas and new products. I think that there are just no limits to innovation,” adds the economist, who is in the last year of his second and final term as dean of the business school.
Some of the milestones of his tenure include ensuring that Insead has been part of the innovative process as an institution. The business school first created an online, fully-customised programme for software giant Microsoft in 2014, which Mihov says was “very different” from existing products of the time and “very successful”.
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“This was completely transformational for Microsoft, but also later for other companies. It was also an immense help for us during the pandemic to pivot to online classes because we had the video equipment and the online infrastructure to make that change,” he says.
Business as a ‘force for good’
For Mihov, another highlight was the conception of the idea of “business as a force for good”, which he mooted shortly after becoming dean almost a decade ago in 2013. The way he sees it, innovation is often driven by entrepreneurs, who are ultimately providing value for society by creating new ideas and products that society requires.
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The “Force for Good” campaign for Insead was launched in September 2013 with the goal of raising EUR200 million to help the school tackle world-scale problems, forge ground-breaking research and re-imagine the “future of business”.
The campaign goal was raised to EUR250 million when Insead opened the Hoffmann Global Institute for Business and Society, which explores the intersection of business and society, through this initiative in 2018. “From what I have seen, it is by far the most impactful institute of this nature. It integrates different topics that border both business and society, like the studies of inequality, sustainability, gender diversity and other social issues,” says Mihov.
The Insead centre’s aim is to deliver both prosperity and positive social and environmental impact by equipping business leaders with tools and frameworks that deliver positive outcomes for businesses, communities and the planet, in line with the UN Sustainable Development Goals.
Within Insead’s curriculum, Mihov also believes that “significant” progress has been made since the inclusion of these fundamental values as part of its education. For example, professors are required to include sessions on sustainability, while there is also a capstone course in which students are given a case study of a company that needs to transition from “brown to green”. The students have to use all their nous of operations, strategy, organisational behaviour, finance and accounting, so that they have a concrete understanding of what sustainability and ESG means in practice, he says.
As a graduate-only business school, Insead offers programmes such as the Master of Business Administration (MBA), Executive MBA, Executive Master in Finance, Executive Master in Change, Master in Management, and a suite of open and customised executive education programmes, as well as PhD-level programmes, across its four locations, including Singapore.
Its MBA programme is currently ranked ninth in the 2023 edition of the Quacquarelli Symonds World University Rankings. In Altrata’s 2022 report University Alumni Rankings of the Wealthy and Influential, Insead was estimated to have produced the fourth-highest number of the world’s ultra high-net-worth individuals (UHNWIs) for non-US universities despite its relatively small size as a specialist, graduate-only institution.
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While some economists are of the opinion that the billionaire class is a scourge on society, Mihov says being a UHNWI and contributing meaningfully to society are not necessarily in conflict — and often actually “go together”. “I think that people become wealthy because they create something that society needs,” he adds. “Increasingly, we’re seeing entrepreneurs who have become UHNWIs focus on the direction of sustainability.”
Since 2019, The Insead Alumni Association Singapore have handed out the Business as a Force for Good (BAFG) Awards to recognise Singapore companies and individuals who have demonstrated thought-leadership and their commitment to use enterprise to better society, and have developed best practices and achieved remarkable economical results and meaningful societal impact.
Past winners of the BAFG Awards included social enterprise Ecosoftt in 2019, renewable energy company Right People Renewable Energy in 2020, and telecommunication company Kacific Broadband Satellite in 2021.
Last year, alternative protein company Inseact won the BAFG Award in the start-up category. The company, which was conceptualised while co-founders Tim van Vliet and Michael Badeski were undergoing the MBA programme at Insead, converts agri-waste into shrimp feed using insects, thus enabling a fully circular economy with a carbon-negative and zero-waste operation.
According to Mihov, the founders of Inseact recognised that fish farming was necessary to address the issue of overfishing in global waters, and yet was highly inefficient in terms of feeding farmed fish. “What they have created is protein-based feed based on insects, reducing the reliance on wild-caught fish as the main protein ingredient in aquaculture feed. That addresses a huge market first, and then secondarily helps with feeding people through the farming of fish,” he explains.
On March 2, the 2023 edition of the BAFG Awards saw companies Green Rebel, ItsRainingRaincoats, Hydroleap, SDTR Marine and Vertex Ventures Southeast Asia and India as winners of the start-up, social enterprise, SME, corporate and venture capital categories, respectively.
Singapore campus the ‘right move’
The potential of Singapore’s budding business ecosystem was one that Insead identified in the mid-1990s while the business school was in discussions to set up a campus in Asia, around the time that Mihov joined Insead to teach macroeconomics and econometrics. Singapore, with English widely spoken, was chosen eventually for its focus on talent development and education.
The Singapore campus started in 2000 with 50 students and today, averages some 400 students per year from across the world. “Of course, we have Asian students who attend our Singapore campus, but many of them prefer to go to our French campus in Fontainebleau, while many European and American students choose to come [to Singapore] for a different experience. So, there’s some sort of exchange going on,” says Mihov.
Aside from Singapore’s thriving start-up environment, the growing interest of global organisations to set up a base of operations in the country was one of the reasons that drew Insead to the country, and also saw it receive the support of the Economic Development Board. “In fact, Insead being located in Singapore is also a selling point for organisations. Because you can have your headquarters here and meet regional directors and executives, while also doing a programme at Insead at the same time,” says Mihov.
Beware the by-products of innovation
The influx of global corporations, large capital and UHNWIs into any economy can be a blade that cuts both ways. While Mihov recognises that increasing wealth inequality is an issue that needs to be tackled, he believes that Singapore is one of the “few countries” that attempt to address this in a “sustainable” manner, by focusing on reskilling its workers.
“Redistributing wealth with progressive tax helps, but it also has its limits — you cannot simply redistribute everything. For me, the biggest story is basically retraining and building skills, so that people can create value in an economy that will give them higher-paying jobs. All parts of the Singapore government are looking into this, into how you can create value-adding jobs and then attract the kinds of companies that provide those jobs here,” he says.
Ultimately, Mihov believes it is innovation that will lead the way for growth in countries like Singapore that are forging ahead into terra incognita. However, he also warns that as industries such as biotech and medtech approach the precipice of merging the physical and digital realms, governments will need to manage the by-products of these inventions.
He notes that industrial revolutions in history have created positives for society, but have also had their fair share of negative repercussions. For example, the first industrial revolution in the 19th century led to massive exploitation of human labour that saw people working up to 14 hours a day. The by-product of this was the Communist Manifesto — and the conflicts that we are seeing to this day, he says.
“If we don’t take care of these by-products, that will lead to inequality and then you may end up with an outcome that is less positive for society on average,” says Mihov. “To me, the issue is not so much where growth will continue at the frontier. If we have incentives to innovate, people will come up with new ideas and products. The question is, how do we deal with the by-products of these innovations?”