How graduates in commerce can contribute - Prof Jeff Borland

[brendan]

The importance of commerce and commercial principles in determining the well-being of society

How graduates in commerce can contribute
An edited excerpt from his Occasional Address delivered at the graduation on 19 December 2006.
by Professor Jeff Borland is Professor of Economics in the Department of Economics of the University of Melbourne

http://insights.unimelb.edu.au/vol2/7_Borland.html
 
For those of you who graduate with a Bachelor of Commerce, I feel I am something of a bookend.  I was a lecturer in your first semester at the University of Melbourne, and now you are hearing from me again at the very end of your studies. You will be pleased to know that I am not going to engage in a final revision of demand and supply or game theory. Instead, I propose to look in the opposite direction – forward, to where you are heading next.

This is exciting because there is much to look forward to in your professional lives. It is something that always comes home to me when I meet up with our Honours alumni in Economics. They are a small snapshot of the totality of commerce graduates, but from this group I can tell you that there is currently: one member of the Federal shadow cabinet and one newly elected member of the Victorian Parliament; a former secretary and a deputy secretary of the Department of Prime Minister and Cabinet; heads of Investment Banking and Mergers and Acquisitions at major international investment banks; professors at Oxford, Stanford, and the University of British Columbia; partners in many law firms, and more generally, many working in government departments with responsibility for economic policy and in large economics consulting firms around the world. In fact, I counted fourteen different countries where our alumni are currently working.

This list suggests that an education in commerce can be the start of a very diverse range of careers in which many past students from Melbourne have excelled. However, as good as the opportunities have been in the past, I believe that they have never been greater or more exciting. Today’s commerce graduates are in a prime position to make a contribution to society.

This is mainly because commercial activity and the principles generally associated with commerce have never before been so influential in determining the well-being of people in many countries. I will use some Australian examples to illustrate this point but they also apply to other countries.

One example is the finance sector. Today, the wealth and living standards of households in Australia depend more than ever on the quality of decisions on asset management made in the finance sector. In his recent Boyer lectures, the former Governor of the Reserve Bank, Ian Macfarlane, noted how in the period from 1985 to 2005 holdings of financial assets in Australia increased from 100 per cent to 350 per cent of GDP, and that an increasing proportion of these assets have been financed with debt. In his words, if ‘a large fall in asset prices or a recession were to occur, the effect…would be greater than in the past.’

In the government sector, the importance of commercial principles is also evident. Major reforms have taken place in Australia since the mid 1980s, such as privatisation and the application of financial criteria in setting new performance standards for government enterprises and departments. Further, in the exciting field of economic design, governments are trying to apply market mechanisms to deal with such problems as: reducing emission of pollutants; improving biodiversity; providing greater R&D incentives to private drug companies to develop vaccines for third-world diseases such as malaria; and efficiently allocating public resources, such as radio spectrum and marine resources, between potential users.

The importance of commercial principles is also apparent in the not-for-profit sector. This is reflected in the weight that so many of these organisations now attach to them and in their desire to learn from (as well as teach to) the private sector. A good friend from my Economics Honours year, Michael Traill, gave the Occasional Address at a graduation earlier this year. He is the CEO of an organisation called Social Ventures Australia, which has as its mission to deal with some of Australia's social problems by applying business principles drawn from the commercial sector and working in partnership with outstanding social entrepreneurs. Emphasising the need to build bridges, he explained how important various initiatives had been to improve educational outcomes for indigenous Australians and to increase employment opportunities for school leavers in high unemployment regions.

Thus, the skills that come with a commerce degree are relevant in every corner of society – for running successful private companies, for governments to be able to contribute the greatest good to society, and for socially effective not-for-profit organisations.  The exciting prospect about graduating with a commerce degree is that it offers endless opportunities for doing valuable work where you will know that your role has been essential.

Should you feel confident that you will be able to take advantage of the opportunities that are available? The answer is definitely yes. This is partly because you have been able to study a broad range of disciplines that span the world of commerce. By my rough calculation, those doing a BCom will have attended 936 hours of lectures and tutorials, worked outside class for at least 1872 hours (or at least should have!), and completed 50 hours of examinations and 48,000 words of non-examination assessment.

However, I think you should also feel confident because what you have learned goes beyond the subject matter of economics, accounting, management, finance and actuarial studies. As the President of Yale University, Richard Levin put it in an address to a graduating class at Yale a decade ago, ‘What you have learned – the specific knowledge you have worked hard to acquire – matters.  What matters more is that you have learned how to learn.’

This was something that I reflected on this year when I to talked to a group of high-achieving high school students about what university education is like. I started out by saying that, in many ways, being at university is a continuation of their present education – accumulating extra knowledge and skills in their chosen fields of study. However, I also suggested that university education offers more than this. It requires a student to engage in a learning process that is very different from what they would have experienced at school.

I hope you will understand what I mean when I say that being at a university is a bit the same and a bit different from being at school. I realised what being at university meant to me and why I enjoyed it so much, when I studied Australian history in the second year of my Arts degree at the University of Melbourne. I had to write an essay on the Petrov conspiracy, an episode in the 1950s when Vladimir Petrov, a member of the Russian Embassy in Canberra, and his wife defected to Australia. At the suggestion of my essay adviser, Lloyd Robson, I wrote to those who had been members of the Commonwealth Parliament at the time of Petrov’s defection, to find out if they could add to the documents I had been consulting. This gave me the opportunity to talk to former Senator Justin Byrne, known as the ‘Father of the Senate’. Byrne was fascinating person – a POW in WWII and a member of Australian Senate for more than 30 years, with unique historical and political experience. I was spellbound as he gave a perspective of the historical background of Petrov’s defection – the role of Russia in WWII, the rise of cold war sentiment in Australia and internationally, and to the event of the defection itself. Examining the motives and behaviour of many of those involved made this event come to life for me, while building the interview into my essay made me feel that I was constructing my own view of history.

It is this process of independent discovery that university education facilitates, namely: knowing what are the important questions; using research techniques to find new evidence to answer questions; applying available evidence rigorously and critically to arrive at an answer; and then developing a way of integrating what you have discovered with what you might have concluded earlier. Ultimately, these are the skills – in effect, learning how to learn – that will be most valuable to you. By developing and applying them as you move into what I have called the ‘looking-forward phase’, you will be able to successfully contribute to your chosen field.

There is one final thing that I would like to say about making the most of your talents and contributing to society. However, let me first confess that I am straying from an area where I have some expertise to what is dangerous territory for an economist: prediction. Economists, of course, are experts in giving a perfect explanation of why a prediction they made did not eventuate.

Nevertheless, I will chance my arm and comment on why I believe that following your passion is so significant. For myself, my colleagues in Commerce at Melbourne, my friends and ex-students who I meet from time to time, we are most fulfilled by work we believe to be important. An example that comes to mind is the career of Charles Darwin. In his early twenties, like you, having just graduated from university, Darwin was offered the opportunity to travel as a gentleman companion on a ship undertaking a voyage to complete a survey of the southern part of South America. Initially, he was torn between becoming a country parson as expected by his family, and his passion for biology and collecting specimens. His family was concerned that this trip, to quote Darwin, would be ‘disreputable to my character as a clergyman’ and that he ‘should never settle to a steady life thereafter.’ However, the passion manifested early in his life ultimately triumphed. Darwin recognised, as the biographer Janet Browne puts it, that ‘this proposal was a dramatic opportunity…to do the things he yearned to do, to see the world, and make something of himself.’ The voyage on the Beagle, which lasted 57 months from December 1831 to October 1836, was indeed to be the making of Charles Darwin and the making of much of modern science. Darwin is a great example of the importance of saying ‘yes’ to challenges that initially may seem out of reach, but ones you know you would love to face.

I know that many of you are already indeed following your passions in this way.  Over the years, in the course of writing many references for exchange programs and scholarships, I have always been greatly impressed to see the range of part-time jobs and extra-curricular activities you and your fellow students are undertaking. These have included activities such as starting businesses in software development, importing and retailing; undertaking tutoring programs for refugees; producing websites and radio shows for welfare organisations; leading trips for young business leaders to developing countries; teaching English in places like China, Vietnam and Thailand; and doing volunteer work for human rights organisations.
Let me conclude by congratulating you on your achievements at this University and by expressing the hope that you will continue to inspire those around you with your abilities and your willingness to be involved in promoting the well-being of society. I hope you find great satisfaction and fun in doing so.