As part of the Norwegian Chamber of Commerce’s renewed approach in listening to its members and being relevant to their businesses as well as causes, I was delighted to hear from Frida Johansson who previously had been working for the Swedish Chamber of Commerce. Now working at UBS and responsible for the Nobel Perspectives programme, she invited me to reach out to our members with a unique invitation to meet 4 Nobel Laureates in Economics (Finn Kydland, Christopher Pissarides, Michael Spence, Bengt Holmström) at the 4th event of the Nobel Perspectives Live! event series in London.
Nobel Perspectives Live! is an extension of UBS’ Nobel Perspectives initiative where they’re teaming up with Nobel Laureates in Economics to give unique perspectives on some of the most challenging questions we’re facing today. So far over 47 Nobel Prize winners have been interviewed, with more to come. It was yet again reassuring and inspiring that the power of networking especially within Chambers has an amazing impact if we only care to take up the opportunities our networks provide from time to time.
Meeting Finn Kydland was one of those moments where past studies combined with excellence of a brilliant mind come into a symbiosis and just made the world come full circle. I was invited to interview Finn and at first, I thought “what would I ask a distinguished Nobel Prize recipient in macroeconomics?” But then, lots of questions came very easily especially based on the fact that Finn’s heritage is Norwegian and combined with a humanistic vantage point clearly has driven his work but based and guided by healthy and transparent principles but also with a profound desire to understand how dynamic factors influence macroeconomic trends – the basis of his work which lead him to receive the Nobel Prize in 2004.
Before even starting the interview, Kydland eagerly explained that he was present at the Norwegian-British Chambers anniversary some years ago and revealed that is was the first time he met the Norwegian King and Queen. In my opinion, this is a fantastic example of how our chamber works; we create a unique platform for all Scandinavian and British individuals to come together, meet and learn.
I started my interview by asking Finn ‘How do you see fake news as a dynamic factor? How big is it and how does it affect the outcome?’ The answer was short and clear – it is just one out of a multiple number of very important factors. Fake news eventually gets dispelled and as such doesn’t have a huge impact in the greater scheme of things.
The second question was a more profound one where he again came with a surprising answer. ‘Is there a fundamental shift on the horizon?’ – ‘yes, I hope so’ this tie very much into how governments implement inefficient economic policies and the effects on society as a result of these. I followed up my question by asking for good and bad examples of government policies and their effects on the long-term economy. Not surprisingly, Kydland highlighted the Nordic countries as examples of countries with successful political and economic systems. The Nordic countries work within a centrist political spectrum with policies that are being more or less aligned, whether a right- or left-wing government is in power then the agreement on economic policy is more or less the same. Further, Kydland mentioned that it would sometimes be difficult to see any change who were in power in his native country Norway. Coming from the Nordics myself, it just feels like second nature, but when one travels and get to know other systems and countries one soon finds out that this is not the case. Finn is based in the US and has a unique view on macroeconomics from both sides of Atlantic and not least in global economies.
Furthermore, we also discussed the issue of productivity in several European countries. The conclusion I derive from this part of the discussion is particularly relevant to our chamber members because the most important growth-enhancing decisions are in the end up to the firm to make, not the government. What kind of research & development the firms choose to focus on, their sustainability strategies and the degree to which they are agile in a rapidly changing economy. However, rebalancing a business towards more sustainable and modern way of working might not lead to high profits immediately, as many have already experienced in regards to renewable energy sources. But even though the return from rebalancing the business towards more sustainable ways of production seems to come years later; it is yet the key to success in the emerging business market in the long-run. Business agility, adoptability and sustainable methods of doing business is of great importance in the future. This also became clear as one of the key discussion points at the UBS Nobel Perspectives Live! event were “How do we create a more sustainable future”. It is essential that governments are on board with the shift in the economic climate, yet, some of the most important decisions are left to the private sector itself. There’s still a lot to do in the sustainability area and companies will have to develop and find ways how to contribute. UBS is one of the key players at the forefront in the sustainable investing field and has proven that one doesn’t need to compromise returns by doing good for the world.
Clearly, I could not have an interview with a Nobel laureate without asking him about Brexit. More specifically, I was wondering what he thought about how firms have been holding off investment recently due to the uncertainty caused by Britain leaving the European Union. Kydland agreed that it is very unfortunate for the UK and the economy that the uncertainty regarding economic policy has cause firms to hold off investments. Hopefully, it will not cause a long-term stagnation in the economy. It is essential that confidence will be restored in the market in near future, without UK experiencing too much ´leakage´ in their economy due to firms relocating to offices abroad. Anyhow, Kydland emphasises that certain and stable economic policy is key to make firms confident enough to invest in new projects.
Relating this back to Norway and the Scandinavian model; Even though a change of governance has caused relatively little change in pursued policies and economic strategies in the past, it provides valuable economic certainty for companies where there seldom is any political reason to hold off investments. However, pursuing a policy of high spending, which we have done the last decades, might be a luxury we cannot afford in the future. It is going to be tremendously interesting to see what Norwegian growth strategy is going to be in the years to come.
One of my last questions was “What have the Nobel prize done for your work?” as to which Kydland responded “Well, I have less time to do my research. But I try to publish a paper or two a year.” He also explained that he enjoys co-writing articles and papers, and that some of his latest publications has been co-written with some of his former students with whom he enjoys intellectual challenges and collaboration.
As a final remark, I must say that meeting Finn Kydland and the UBS Nobel Perspectives Live! event was a fantastic experience. It was also particularly inspiring being at the UBS’ Live event with a hall full of aspiring students from the leading universities in the UK, and to hear some of their views not only on the debate between the Laureates, moderator and the audience but also how they view the UK especially in these Brexit times.
Thank you to UBS for the kind invitation and highlighting the amazing work of the Laureates and a testament to networking across sectors to explore possibilities.
General Manager of the Norwegian British Chamber of Commerce