Morning, welcome to the shed. Again. This is a special moment because whilst I've been doing an awful lot of broadcasts from the shed by myself. I've now found a friend. So I'll introduce myself friend in a second so that he's going to share the shared with me to have hopefully a really interesting discussion this morning about the current economic situation in relation to the covid-19 virus and the impact on the economy, etc. Etc.
So we're just about to approach day 50 of lockdown he knew so there's been an awful lot happened during that time and my friends That I found to spend some time with me in the shed this morning virtually. Of course with a proper social distance is Professor Baback Yazdani who is the dean of Nottingham business school now, I'm a big friend of the naughty and business school. I've done two qualifications there. I've known back for about four years since I think we presented together and I'm now a given of a trend. So I've got a really good understanding of what's going on at the business school, and I know I'm biased but I think it is just the best business school in the country and that's because it is so well connected.
business and it's not a surprise that it's so well connected to business when you look at Beck's backgrounds because he's background spans both business and Academia at senior levels not just in the UK but in the US and around the world as well so I think it's fair to say back you're an expert in product development in lean management you've worked in the automotive industry you've advised the big names in that industry and also you've you've spent a lot of time at what university and now at NBS trying to bring business and Academia together to make sure that the to working in Tandem and can and can really drive the world forwards so good morning how are you doing morning thank you for the introduction yeah and I problem so the first question is actually a bit more of an introduction from you because my first question to you is how how did you having had such an illustrious act industrial career commercial career end up as dean of Nottingham business school well I've always been interested in industry and Science and Where the Mainstays about empirical evidence of systematic investigation a phenomenal and rationalism, which are the main point that you work with industry and businesses primary way, which we create wealth and I've really always wanted to be part of that.
I became the dean about nearly 13 years ago now after leaving Jaguar Land Rover, which was part of for that the time prior to being a Dean so I worked For Jaguar Land Rover Volvo, Aston and Lincoln in the US and but even before that I worked at work where there was a lot of work done with industry in the it's very famous now work manufacturing group.
And so I when when I joined Nottingham business school as the team this did not look an unnatural move to me because it was applying the same type of principles to The different setting which I knew a little bit about because I've been engaged with both business and Academia throughout my career in fact, so they change wasn't a massive change to me and also R&D in industry and R&D and education have the major area of overlap as well. Absolutely.
And I mean you saying it wasn't a big change here moving from industry into Academia in that respect and I can ey and knowing your whole approach and philosophy at the business school that makes sense to me but there is huge change going on at the moment.
Do you see now the the role of the business school evolving as a result of the covid-19 situation absolutely and I think all the businesses including the education business if you like or evolving and Nottingham business school particularly and not going to rent in general have been quite an Innovative Force for for as long as they've been In the educational establishment and we've done multiple Innovations, but the main purpose of that is to serve our students and to serve our economy and society as a whole and for example, we've become leaders in personalization and experiential learning because we know that matters to our students and that matters to our clients and employers which are the beneficiary of our students capabilities at the end of the day and that sets us apart from the other hundred.
Sincerity of business schools around UK and today I can see that what is now happening to us is that we have to accelerate our strategy.
So we've had a strategy in place but we've had to accelerate it to go faster in some respects and therefore become more focused often crisis does that it does force you to do things and focus on the main part of your activities, and I'm sure this will To do and we will deepen our difference with some other business schools that are more than perhaps commoditized and more vanilla. Whereas what we want to do is serve the business community in producing great graduates and in producing knowledge that they can use and utilize. Yeah, this this point about acceleration of change is incredibly valid.
We didn't have most of our people Working from home before this started and we had a space of a few days to find an Innovative way of getting everybody working from home. The challenge. Now I think is to keep that that burning platform that pressure and we've got a two-week rule that we talked about at the moment. Now, it doesn't mean we're going to D major change in two weeks. But the question I'm asking everybody was if you had to do this in 2 weeks, how would you do it? And of course that is almost at the heart of something like Lynn development, isn't it?
You taking out all the non-value-added steps all the way through something and I Elevating how you can deliver it. So this must be playing right into your your heart and really With The Lean background. Yeah, absolutely because as you said in normal times, you think well, they have to do lots and lots of thinking and what these things that have grown over the years, but even you have to ditch them, you have to teach them very quickly and you focusing on for example, we switched from face-to-face to online reading a week and that switch. Okay, we do.
This is not all singing and all dancing online, but it is online and delivering to our students and I like to experience good luck to them because today is the start of their final year examination. Wow, we are major size of a business school and University.
So business school six and a half thousand students University as about 33,000 students and to do that in a week is just coming out want to be even In kibble. Yeah, you have to wear exactly and when we have two human beings are capable of amazing things. I think need to keep that Spirit if I'm a moving on to the bank of England. They obviously gave an update last week Thursday last week. They obviously talked about the fact they're holding interest rates the holding the quantitative easing that they've got at the moment.
We still have 650 billion in the system being supported but at the moment they're not taking any further measures and yet despite that the the numbers they were addicting for the last half of this year. I think about a 14 percent decline in the UK economy and then interestingly predicting a 15% bounce back last year. So they seem to be looking at a classic v-shaped relatively quick recovery. And actually if you look at the 2008 figures possibly quicker than 2008. What do you at the business school make of all of that when you hear these statistics? Yeah. I think we agree we in general because if you think about it quite major sectors of the economy have come to a complete standstill.
Yeah, and that obviously has an effect. So tourism Hospitality flying around the world major manufacturers Etc the world come to stop. So there's no economic activity taking shape to it. So 14% is not is not a surprise.
If you think about this well into the second month and perhaps into the third moment the two quarter of the economy perhaps for a sure of its time is being stopped. That's about 12 and a half percent and if you think about that, so the numbers are not surprised now whether we come back in a V shape or usually / some people called an L-shaped all sorts of shapes that they can imagine. I think there's going to be once we get back into getting the economy moving again things will start it will depend on the demand.
So for example yesterday, The government was talking about construction workers Etc to going to start our manufacturing trying to start manufacturing obviously has to be pulled by the demand. Yes, so you could manufacture things but there's no good manufacturing things and putting them on the shelves. Nobody is actually buying them. So the whole system has to start working fully that will take a bit longer. I think so the V shape. Yeah. I think you know Bank of England doesn't do.
Do sort of too many speculative stuff, but it is a good analysis that it expected that it will be a sharp rise after we find the solution to this and but how sharp is a V shape or you shake or something similar? Then we will see of course economics is a little bit of an art as well as a science absolutely is and I think it's a I think it's a changing our I think we're probably moving from you know, traditional and put oil paintings.
To the an eye socket or something is it's going through unprecedented times and so to use that phrase which is overused at the moment, but there seems to be no better one. I do Wonder though. I know in macroeconomics were looking at the economy as a whole and we're trying to draw a curve. The reality is there will be so many different shapes for so many different Industries in so many different regions and what will come on to talk about the Midlands later. But but I don't think there's a lovely like 2008, you know a relatively quick v-shape.
Under two years only dropped by about two percent overall in in that time and you know came back out again to a nice healthy kind of 1% ish not spectacular. I mean this this truly none of us have seen this before and I just think there's going to be such a varying impact. So just coming to you you've touched on this already coming to the government's response. Obviously we're recording this first thing on Monday morning having heard the Prime Minister talked last night giving some sketchy outlines.
I think it's fair to say what has been Received just quite a confusing message. A lot of people asking for more clarity and there's a document being produced at two o'clock this afternoon. We have prime minister's question time, I think today as well. So clearly we're having this discussion before there is a lot more information that said I don't think either of us would be expecting a huge amount of information because I think it's one of those situations, but there was certainly a message last night of the seem to be of telling people to go back to work this morning.
Without getting political about this obviously. I'm sure I'm sure we could do because that message was a very interesting one particularly with the notice period involved. What do you think is behind that do you think it's trying to boost the economy are they so concerned that they've realized that we need to get some of the manufacturing and construction industry is going and how did you respond to that with your business hat on? Really? Yeah, the picture is mixed and the government must provide.
I mean, this is the role of any government in any country in this particular Christ is the most Provide leadership to reduce loss of life and to protect our Librarians in so those are just focus on two points. So those two points the messaging as usual thing. It was a little bit mixed. I think when the chancellor came out earlier in this crisis and said we can do whatever it takes. There's a very clear message into the market. Yeah means that we will back whatever.
It measures the government is putting in place and that has suspended a lot of businesses going bust otherwise, which are effectively on a compulsory closure for let's take restaurants or fobs and the Leisure and tourism industry for a minute. They are at a complete standstill nothing to do with whether their businesses were healthy or not.
But the do with the rules of the Earthlings Pandemic, so they are they are in need of clarity and we need of reassurance. So the government's role was to put effectively money into the pockets of individuals through the businesses. And I worry that there is a little bit of sort of softening of the line on that behind what we what we heard markets need that Assurance other way.
wise we start losing confidence in the market now, hopefully the clarifications will they some rest and Assurance to people and but if the government is starting to think that we are getting a bit fed up with this and we have to do something then that something has to be very well thought through I also think that you know certain industries such as manufacturing should Manufactured for things that they can actually sell parts of the economy are doing very well by the way out of this so, you know supermarkets the food supply chain Etc. These are all these working and working on super fast times. So they are they are parts of the economy that are working. We probably will see some restructuring to happen, but the government's line. I'm not quite sure whether it was very helpful yesterday.
We'll see. We'll see I think they are try personally. I mean, this is a personal view. I think this government has what it's done is that thrown a message out seeing the reaction and then sort of adjusted it details. I personally would have preferred more detail in the facts, but it seems like I think we all would let let's see what comes today it will be helpful to have that particular to guide businesses about how to keep their employees safe and I think that bit I know there has been some basic guidance put out.
The government website I two or three weeks ago, but but I think really that's the missing link it in much of this and and indeed when we move onto schools, etc, etc. So so let's see where that gets to bit but anything that helps stimulate the economy is going to be helpful to us. Of course, the other thing that we have to talk about is the dreaded be word. I mean, there's a joke been going out on social media which is you know, essentially gosh I miss brexit because of course a few months ago. We were talking about was very exciting.
Now all were talking about is Coronavirus and it certainly It's brexit into context. However, we still have that looming and the original deadlines were obviously for a deal to be sorted out by July. Otherwise, we run the risk of a No Deal and of course the interdependency between businesses will hopefully help us out of the covid-19 crisis including businesses that could across borders. So have you at the business school been thinking about now, you know what next because we're contending with what was already seen to be potentially damaging a damaging situation on top of now.
The damaging situation really and it really puts in Stark relief the fact that we have to collaborate and cooperate with other countries, particularly our neighbors and sharp relief of the crisis of the pandemic does tell us that we really need each other. Yes, really Europe Europe needs us. We need the rest of the world as well and they need us we have a lot to offer they have a lot to offer.
We are all better off it collaboration and cooperation. And actually we are a species that cooperates as a whole for Millennia and we know that hundreds of thousands of years. We have evolved to collaborate and be more successful and I didn't really think not just countries but come where organizations big organizations have to collaborate and work globally to solve this issue.
So for Boo some examples of this are really nice to see soon as the virus was identified. I think it's a DNA in our neighborhood released and shared across the world and people all over the world have been working on this. I mean, this is not on the main news items that people watch what everybody is working on this with the vaccine.
I mean that that International collaboration over the vaccine is and we will see that the cures and vaccines and of Course proceeds of that need to be carefully thought about because at the end of the day we have to share this out.
Everybody needs it and everyone gets it and in the long-term interest of all of us, even if you are a pure pure sooner profiteering business, you will have a think that actually I need these customers to be able to sell them something so it is in our self-interest to collaborate and cooperate and Let's do it of collaboration. And I know that NTU and the Business School in particular are very much see their civic responsibility. Do you see further civic responsibility of the University into the local community here in the Midlands. Is that something that you think will will be enhanced by the situation? Absolutely. Absolutely. I think again we've got for example our R&D facilities our colleagues across many many subjects whether it be medical research, but it'll be economic research and Analysis.
Or even the design of stuff that are going to be useful for various types of organizations and people are going to be part of this Innovation. That's as we were saying earlier. This does force Innovations, and we will we will do many many more now this this is happening very quickly. So I don't know all the details of all of the things that are happening across but definitely we've been working with local governments.
We've been Chemical businesses and organizations Charities and we're all pulling together to help communities that are in difficulties right now and we are trying to create conditions that are going to be beneficial for all of us later on but that collaboration that happens intensively creates good relationships between people. Yeah, and those those persist so we will be able to talk to each other more easily after this.
Yeah, and I know you've talked previously about the importance of local Supply chains. I mean clearly local Supply chains local markets are going to play an even bigger role now because we see what happens when you get a disruption in a national or interact International Supply Chain. I know one of the collaborations that you have is you work with the Midlands engine and you've been doing some research recently. I read the first one of those reports end of the previous week. We saw some national statistics about the the Midlands particularly the West Midlands, but also the easement is not far behind being one of the three worst.
Areas in the country and I know in the Midlands engine Think Tank you guys for helping them with that research. What what is the the kind of the precis of what that's telling us? We will do you do we are I just mentioned we are producing these updates between us and Birmingham University. Again, we are collaborating the tested to work on the economic Observatory all the makings engine if you like and that is producing a report every couple of weeks. We are going to put this out.
Chocolate to update what is what is happening in order to help policy and of course businesses as well to see what they can make out of it. So this is showing as so if you can imagine that we have massive manufacturers here. Yes investment and particularly, but also in this control unit companies such as Jaguar Land Rover have a major plants in the Midlands and particularly rest Maitland's Rolls-Royce.
Has massive footprint in the East Midlands and the center. So these are the centers of activity manufacturing activity.
So they've been hard hit if they are so so in terms of Rolls-Royce, for example, Roseville quarter of rolls-royce's income comes from civil aviation, and they sell their hair and their money when engines are operating in flight, they don't actually and supporter of their income has become tight and very difficult to so that's a major hit all the supply chains do that is affected and same with the car industry. It has basically stopped production, but it's not just about production. They have to get these out and sell them to people and they have to ship them across the world and Etc. So and so this is hard hit because our strength in manufacturing at the moment and also there are agricultural part.
Of the Eastern lands that are difficult but the retailer is not the small retailers, but the major supermarkets. It's a still doing a lot of activity. So we are seeing geographical difficult differences and variations in the country. We are seeing sectoral differences there are variations country and that's actually showing quite well in the data analysis that we have done and it is not pointing to anything I can say. Well here's a silver lighting crew.
Something but there are sectors that obviously are doing well. So for example the airport in the East Midlands Airport and does a huge amount of non-passenger work and that there is no a logistics hopped and then interestingly that Logistics have idea had been working on in the preparations have been going on for a while there and post grexit that may play a more significant role.
As well and so all of this is a little bit of speculation, but when we businesses have their difficulties to face business people are pragmatic and they find a way and they find the solution. They find new markets new customers and they find ways of reducing the overall Burton and I think it's interesting isn't it? You lead to the Silver Linings. We are geographically literally in the middle of the country.
We are the heart of the The country and I think that geographical opportunity for us particularly as potentially Supply chains and come back within the boundaries of the UK partly because of coronavirus but partly depending on where we get to with the the brexit situation.
I think I think the opportunity in the advantage that we need to use in the Midlands is location is the skill set is the tech and the digital industries that are starting to spring up out of that traditional manufacturing base and for me having agility and having the ability to go to where your demand As he talked about demand being switched off earlier, and if you look at some of the shapes of some of the country's response to the 2008 recession, it was those countries that are able to get back but match their supply and their demand very quickly and having that agility the ability to redeploy to re-skill these things will all be absolutely critical. So we're coming towards the end now of of our conversation here. I've got a couple more questions for you in terms of global leaders. There's been a very very different response.
It's here that we've seen in different countries, which global leader have you particularly looked at and an admired in terms of how they've been handling the situation. The person was interesting most actually is the prime minister current prime minister of Greece. Mr. Fierstein's career advancement of Turkish and is a recent prime minister. So we came to power recently and I was when I saw this point I had to think hard to find a good leader by the yeah.
But T they acted very swiftly very quickly and I was listening to something they were saying earlier than they were being questioned in all the news channels and they said but we saw it coming we so what's happening in China?
And so what's happening in Italy and we started acting very hot and very impressed because they've just been through a massive economic upheaval but the death rate there for the last few days has been zero that's amazing so that it shows good leadership and sticky because they didn't go into it in a particularly strong economic position anyway, so so they were already dealing with yeah, they will do that. They also have some massive migrant movements coming from their key and see Syria to Turkey and there's local little upheaval the and so I've been really impressed how quickly they've acted and they've hit a nerve I have something in reality because I've worked in Greece before that.
From my wife happens to have come from grief. So I have some antenna there and I read the news about it. But yeah, it was it was remarkable how quickly they've acted and they've talked to the people through the language of the chief medical person over there who has been advising very easily and very clearly that this is good for you. This is good for the community.
So stay put and don't mess around and has Seems to have worked so they have truly suppress the curve. And of course, you know, I'm sure they will have economic problems because the Mainstay of the Greek economy is tourism and that's I don't know how that would recover but so far. He read really impressed me. I will keep an eye on that one. Thank you. It's not one. That's come across my antenna so far. So that's I was like to learn what we can from others few final questions.
For you and you have to understand in one word. The first question is what one word sums up how you're feeling about the crisis now and the second question is what one word sums up how you're feeling you'd hope to be feeling about the crisis in 12 months time is very hard to find the signal that one word. What word was calm? Okay, good good in a few months time or 12 months. I would want to say whew.
Yeah, I like that. Thank you. So so speaking of opportunity. It was almost like we planned this and we haven't because I'm a bit of an economics chi chi. I just started reading this book. It's a relatively new book and it's from a new Economist called Kate Walworth and she's arguing against some current economic thinking I'm not all the way through it yet. I agree with some of what she's saying, but I really like the idea.
Dear that there's an opportunity to rethink economics at the moment. I'm just going to leave with this particular quote because I think I think it kind of sums up some of the things you've been talking about. Actually the most powerful tool in economics is not money nor even algebra. It's a pencil because with a pencil you can redraw the world. Mmm. Yeah.
So let's hope we can redraw the world and collaboration still between business and the Business School in the universities and the community and do what we Can to make your words have 12 months come true opportunity very very much. And as long as we are here, we are here to work with the business Community to help it. Thanks by back. I really appreciate everything that you guys are doing as well. So and thanks for being our first our first shared shed conversation. So it's been it's been a pleasure. Thank you. Thank you very much, sir.