The Challenge of Shared Prosperity

Jan   Rivkin; Karen G. Mills; Michael E. Porter

Report | 2015

The Challenge of Shared Prosperity: Findings of Harvard Business School's 2015 Survey on U.S. Competitiveness

by Jan Rivkin, Karen G. Mills and Michael E. Porter

Abstract

In the 2015 survey on U.S. competitiveness, HBS alumni weigh in on the current state and future trajectory of U.S. competitiveness as well as the structural strengths and weaknesses of the U.S. business environment. In addition, alumni delve deeper into two aspects of competitiveness: the health of entrepreneurship in the U.S. and business leaders' views on shared prosperity. Alumni are optimistic about the ability of U.S. firms to compete globally and they see entrepreneurship as more accessible today than it was a decade ago. But they doubt that firms in the U.S. will be able to lift the living standards of the average American. Alumni report that rising inequality, middle-class stagnation, economic immobility, and limited economic mobility are problems for their businesses, not just social issues. Business leaders would like to see the future gains in prosperity spread far more evenly among Americans than recent gains have been distributed.

Keywords: competitiveness; U.S. competitiveness; shared prosperity; Wealth; Competition; United States;

Language: English

Format: Print

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Citation:

Rivkin, Jan, Karen G. Mills, and Michael E. Porter. "The Challenge of Shared Prosperity: Findings of Harvard Business School's 2015 Survey on U.S. Competitiveness." Report, Harvard Business School, Boston, MA, September 2015 (With contributions from Michael I. Norton and Mitchell B. Weiss.)

Case | HBS Case Collection | October 2017 (Revised April 2019)

Eastern Bank: Innovating Through Eastern Labs

Karen Mills, Dennis Campbell and Aaron Mukerjee

Eastern Bank is a 200-year-old New England mutual bank with a community focus. Eastern specializes in small business lending, having made strategic investments to become the top SBA lender in New England in the midst of the Great Recession, when other banks were pulling back. But with technology threatening to disrupt Eastern’s relationship banking model, CEO Bob Rivers is getting worried. Looking to spur innovation at the bank, he set up meetings at MIT to talk with “fintech” entrepreneurs. In a deliberate quest for innovation talent, Rivers finds his way to Dan O'Malley, co-founder of the payments division at Capital One and, most recently, CEO of a failed online bank. O'Malley agrees to join the bank as Chief Digital Officer, leading product development, customer support, and “Eastern Labs”—a new office enclosed by glass walls and located in the middle of Eastern's main lobby. Rivers provides Labs with $4 million annually—1% of gross revenues—to develop new banking technologies, and promises to help O’Malley spin out his own company if he develops product that can be monetized. O’Malley conducts tests in insurance cross-selling and small business lending, eventually launching a completely automated small business lending product. Rivers keeps the promise by helping O'Malley spin out a bank technology company called Numerated, and secures a 25% equity share for Eastern. But by the time of the spin out, Rivers is reassessing the success of the effort. Did Rivers have the right intrapreneurship model? Did he change the culture at Eastern? Did he make a mistake spinning off Numerated into a separate company? What lessons can he learn for “Labs 2.0”?

Keywords: Banks and Banking; Technological Innovation; Entrepreneurship; Management;

Citation:

Mills, Karen, Dennis Campbell, and Aaron Mukerjee. "Eastern Bank: Innovating Through Eastern Labs." Harvard Business School Case 318-068, October 2017. (Revised April 2019.) View Details

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Fintech, Small Business & the American Dream describes the needs of small businesses for capital and demonstrates how technology—novel data sources, artificial intelligence, machine learning—will transform the small business lending market. This market has been plagued by frictions: it is hard for a lender to determine which small businesses are creditworthy and it is difficult for business owners to understand their own cash flow and prospects. Now the fintech innovation cycle is at an inflection point—new streams of data have the power to illuminate the opaque nature of a small business’s finances. The playing field is wide open, with technology companies like Amazon and Square, new fintech entrepreneurs, and banks—small and large—vying for a position. Fintech, Small Business & the American Dream grapples with the broad significance of small business to the economy, the historical role of credit markets, the dynamics of innovation cycles, and the policy implications for regulation.

This Teaching Note accompanies the case HBS No. 718-419, “Hilti (A): Fleet Management.” It provides guidelines for class discussion, as well as a board plan and transcripts of the associated videos, Hilti Fleet Management Video Supplements.
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The Challenge of Shared Prosperity: Findings of Harvard Business School's 2015 Survey on U.S. Competitiveness

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