“If I’m the smartest person in the room, I’m in the wrong room.”
Google attributes this quote to Confucius … or Jack Walsh! That’s a pair of people I never thought I’d see in the same sentence.
I’m grateful that I’ve had the opportunity to put myself in rooms with smarter people over this past week. At the University of Chicago Booth Management conference, I enjoyed catching up with great friends like the women pictured below. We served on the Board of Directors for the University of Chicago Women’s Business Group for several years and I cherish both our personal and professional relationships.
Lunch brought the opportunity to hear from Joe Mansueto, the founder of Morningstar. Of note, he built the company from his dining room table using Warren Buffet’s business and investment principles. What would he do differently? He wouldn’t have taken on an investor, which eventually led to an IPO to buy them out.
In the afternoon, I attended a great panel discussion Perspectives on Investment Banking. Given the current economic climate, it was fascinating to hear from private capital experts from Morgan Stanley, Citigroup, an international investment bank and the head of a global investment banking division. Here are some interesting nuggets I learned:
- More inflation is expected in the near term, as tariffs pass through to consumer prices.
- Morgan Stanley sees a 40% chance of recession overall, but the probability is much higher in certain industry sectors.
- Every time there’s an economic crisis, Wall Street responds with a new innovation.
- Africa presents a huge opportunity for private capital, BUT investment depends on the Rule of Law and the belief that it will be enforced. This illustrates how important it is for the U.S. to keep our own Rule of Law in place and enforced!
Next up was an amazing presentation on Gender Inequality: An Overview of the Recent Research by Dr. Marianne Bertrand. Economists look at this topic through a lens of EFFICIENCY, not fairness. Businesses have greater success when they have the best talent in a position. Excluding the most talented person of any race or gender is simply inefficient. Unfortunately, while we’ve reversed the gender gap in education, there are 3 big hurdles remaining:
- Difference in educational choice – women are less likely to select math-intensive, STEM degrees.
- Diminished labor supply after the birth of a child. Becoming a parent does nothing to the earnings of men, but there’s a big dip and ongoing penalty to women. This is true around the world, but the disparity varies by country. The U.S. has one of the highest variances.
In the U.S. & Europe, EIGHTY percent of the gender gap is explained by the child penalty. The open question is whether this is due to differences in preferences and skills, or due to behaviors created by strong stereotypes and gender roles. Dr. Bertrand shared the latest thinking on this subject.
Economists see stereotypes as statistical discriminations, since averages are used to make decisions when only imperfect information is available.
By contrast, Social Psychologists recognize that stereotypes aren’t necessarily rational or accurate. They’re just cognitive schema. However, they’re powerful because they are PRESCRIPTIVE, not just descriptive. Social norms exist that set expectations for the roles we play. We need to SEE women in non-traditional roles in order to increase acceptance for women in those roles. Studies in India, Norway and France validate that point.
Research shows humans are prone to Pluralistic Ignorance. We mistakenly believe that our views are in the minority and that everyone else thinks differently. A global study has identified that people believe that ‘everyone’ is more conservative than they really are, when asked about this topic. New research is underway to determine if a mass information and advertising campaign can create awareness to address this misperception. I hope it’s successful – not just to reduce gender inequality, but to also help address the pluralistic ignorance we have in the U.S., which feeds the red state/blue state political divide!
All the best –
Elene
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