Good evening and thank you for the warm welcome.
It’s a great pleasure to have the opportunity to talk to the School’s students, alumni and academic staff this evening.
I have always believed that universities should be a forum for the debate of ideas. In this incredibly challenging time, business schools of course have a special role to play in leading that debate between industry, government and the wider community.
I thought therefore this evening I might set the scene on some of the critical issues I believe we are now facing.
I’d then like to open up the conversation and use the majority of our time to explore your views on how the economy and business will change in the aftermath of the financial crisis and economic slow down.
First, it’s now very clear that over the past 18 months, many of the assumptions that we’ve built the foundation of our economic prosperity on over the last 15 years have been challenged and found wanting.
The result is the creation the most difficult set of economic conditions the world has faced since the 1930s and a dramatic reshaping of the global economy and business.
In global banking, to be frank, it’s been a bloodbath. Since January 2008, there’s been over US$1 trillion in losses, 40 bank failures and 275,000 jobs lost in financial services – most in the United States.
And whilst the turmoil was initially in the financial sector, it is now clearly being felt in the real economy throughout the world.
Many advanced economies are in recession and there is a slowdown taking place in the emerging markets.
The prospects for the world economy in 2009 are, in a word, bleak.
The world’s ‘advanced’ economies, as a group, are likely to experience their first annual contraction in economic activity since the end of the Second World War – by the order of close to 2 per cent.
As a result, the philosophy of ‘small government’ is now officially finished and governments around the world are now playing a much larger and more directive role in the economy.