The profession needs to gather convincing testimony and evidence, especially from successful business economists, on how the professional contribution is well worth the cost. Linking business economics, or any other staff function, with corporate performance admittedly is not easy. Nevertheless, the issue must be pursued. Otherwise, line executives, whose performance can be more directly measured, will continue to downplay the value of what the business economist can and does bring to the table.
Technologically Sophisticated and Investigative.
Technological breakthroughs and insatiable demands for facts guarantee a massive data (paper in particular) overkill in the not-too-distant future. An executive backlash is already occurring. There will always be a premium on business economists who know state of art technology, but also can extract unique insight and meaning, helpful to decision makers, from bloated and expensive data banks. Moreover, the premium will be still greater for professionals who can develop acute sensitivity to changes taking place before they become obvious in available statistics. This will require far more first-hand knowledge of conditions underling packaged information. Tied-to-computer business economists will be less effective than those who supplement their number skills by investigating who and what is really going on behind the data.
Training and Development of New Professionals
Few successful business economists concede that their academic training adequately prepared them for their future work. Formal campus courses in economics are strong on theory and mathematics, but short on practical policy options and recommendations, communications, reports for
management, personnel-management skills, and a substantial number of other characteristics necessary to get and keep a job in the world of business. While most practicing business economists spend some time speaking on campuses with faculty and students, the profession might well further direct its interest and support to institutions willing to improve the overall level of preparation. All will gain.
Competitively Organized
Business economists have formed professional groups for at least six decades. The United States initiated some of the earliest organizations, but new bodies have been formed in many nations. No truly global organization yet exists, but this seems likely during the years ahead. Competition for top quality members will intensify. Some overlapping of memberships and competing meetings and programs are already evident. The changing evolution of the profession will be marked by new organizational structures vying with each other inside as well as with groups outside the profession.
Source of Executive Talent
My longstanding view is that business economics is one of the very best professions in its own right, but also as the foundation for executive leadership in a wide range of related fields. One of my greatest satisfactions is to see economist colleagues rise to general management positions such as finance-budget officers, planners, global marketers and traders, shareholder relations-public affairs directors, etc. Many more will do so.
From my hardly objective view, any top management team will be enriched by the participation of someone with an effective business economics background. Such a person will inject a broader and deeper perspective, a longer range strategic outlook, a more balanced public vs. private point of view, and "different" knowledge and sense of values. Too often the business economist's views are well filtered on the way to top management, especially in the absence of an economic specialist on the board of directors or management committee. Accordingly, professional business economists need to try early in their careers to begin to think as senior policy officers. This will not only help increase sensitivity to high-ranking executive needs but also accelerate personal development as well as increase visibility inside and outside the corporation.
Longer-Range Visionary Focus
The prevailing obsession of most American business executives with short-term performance is likely to abate somewhat in coming years. The United States certainly does not want to lose its unique, dynamic ability to accommodate change. But, the American market system in time must find and respond more adequately to a new vision: quality as well as quantity of life.
The current pervasive drive to enhance the corporate "bottom line" seems much too narrow to endure without raising challenges from negatively impacted segments of the general society. Fundamental economic, social, technological, political, and other forces of change are too strong to be largely ignored or denied across much of business. Moreover, accumulating fiscal restraints at all government levels will require, if not dictate, more longer range thinking, policies and decisions. The business economist has a critical role to play.
The business economist of tomorrow will be judged increasingly on ability to call the "big issues" and "big turns." More visionary thinking and skills need to be developed. Concern should be not only with what will happen, but also with the real potential or vision, i.e., what could happen, to improve the outlook. Longer run forecasting competition will be less intense. By contrast, in short-term forecasting the business economist will face more instant on-line technology and sophisticated specialists. More than ever, the business economist will have to answer the question: What unique contribution to future policy-decision making can our profession be counted on to make?
Private and Public Decision Oriented
Few economists can now make a living forecasting mainly gross domestic product. Those days have passed.
As suggested at the outset, the focus of business economist research must move more forcefully beyond data analysis and projections to policy implications, recommendations, and action. Closeness to information sources will always be important, but much of that former uniqueness of the profession is being diluted by the proliferation of data and data suppliers. What the business economist brings to the table more than ever must be ability to sift through the massive flows of information to identify the critical facts, simplify the issues, develop the policy options, recommend a choice, and get involved in the implementation. More attention must be given to anticipating -- not just measuring -- change to alert decisionmakers sooner.
On public policy matters, the business economist must not only perceive the private sector priorities and perspective, but interpret for business executives what practical political options confront public officials and the likely consequences of each. This will not be easy but will be accomplished as the individual business economist builds a reputation for objectivity and accuracy and gains insight and experience crossing the public-private sector wall.
SOME CONCLUDING OBSERVATIONS
The general field of economics itself seems certain to undergo change. Current abstract theory will become less relevant in the rapidly changing environment and confront diminishing interest and withering support.
The core issue in economics -- revolving around the problem of insatiable human wants facing limited resources -- will continue to challenge societies everywhere. But, the search for solutions will force increasing links with other fields of expertise.
Economics is not likely to be taken over by some other discipline, but the threat could well arise. Business economists are in the best position to build relationships, and many are already doing so. There will be ample opportunity for business economists to challenge pure academic superiority by demonstrating that our profession is not the stepchild, but rather the real, enhanced version of economics. When will a business economist win a Nobel Prize? Which business economist will write the modern text of Pragmatic Principles of Economics?
The business economist profession stands at a point of transition and opportunity. To fulfill my expectations will require a great deal of concerted leadership, determination, and action. I believe that these will be forthcoming; the alternatives are far less attractive.
Walter E. Hoadley is a Senior Research Fellow, The Hoover Institution, Stanford, CA, retired Executive Vice President and Chief Economist, Bank of America and a Fellow of NABE.
COPYRIGHT 1995 The National Association for Business Economists
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