This past October the Owen School hosted its first-ever Conference on Financial Innovation, and the timing couldn’t have been better. While the conference was organized to celebrate the 35th anniversary of the groundbreaking research that led to the growth of the derivatives market, the topic on everyone’s mind was the financial crisis that had just started to make headlines a few weeks earlier.
Among the speakers at the conference was Robert Merton, a Nobel Prize-winning economist. He compared the crisis to a scene in a hospital emergency room. Like a patient being rushed in with an unknown ailment, the economy first has to be stabilized, he argued, and that takes a team of experts with intuitive skills. Once the problem is diagnosed, a long-term solution can then be put into place. This task, he said, is best left to a different team of experts, whose strength is in designing complex systems.
All these months later Merton’s emergency room analogy still applies. To help stabilize the economy, the experts have tried using the Troubled Assets Relief Program to purge the financial sector of its so-called toxic assets. They’ve also begun administering the steady IV drip of the stimulus package, which aims to nourish Main Street America back to health. Neither solution, however, has been a cure-all, and the economy remains in critical condition.
Meanwhile there are plenty of Americans gripped with fear just outside the emergency room. Faced with a crisis of such magnitude and complexity, many of us can’t help but feel hopelessly small when it comes to our role in the economy. Yet we shouldn’t let these thoughts discourage us from playing a part in its survival and recovery. In fact some would argue that now is the time when the average citizen can have the greatest impact—and reap the greatest reward. Amid this turmoil, these individuals see opportunities to invest where others have retreated and to start businesses where others have failed.
This entrepreneurial spirit is the lifeblood of our nation’s economy and is one of the distinguishing qualities of the Owen School. As editor I often hear from alumni who credit the school with giving them the necessary skills and confidence to take risks in business and succeed. In this issue you’ll find some of their stories, including a feature about three former classmates who are now CEO entrepreneurs and a profile of an alumna who is running a women’s adventure travel company.
Of course not everyone can be a successful entrepreneur, but there’s a lesson to be learned from those who are. We all can have an impact simply by not allowing ourselves to be paralyzed by fear. Our collective inaction as a nation only makes matters worse. By finding the confidence to go about our daily lives—spending and investing wisely—we can send a signal that the heart of this country is still beating.
And that perhaps is just the medicine our economy needs.