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Kenan Institute 2023 Grand Challenge: Workforce Disrupted
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Market-Based Solutions to Vital Economic Issues
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Nov 15, 2023

2023 Kenan Institute Distinguished Fellows: Grand Challenge Papers

Part of our series on Workforce Disrupted

The Kenan Institute’s Distinguished Fellows comprise an exemplary set of global scholars committed to leveraging their individual expertise, thought leadership, research and networks to further the institute’s efforts to examine – and drive solutions to – the most complex and timely issues facing business and the economy today.

Each of the 2023 Distinguished Fellows has written a paper as part of their work to support the Kenan Institute’s exploration of workforce disruption.  Below you’ll find an introduction to our fellows and link to their papers, along with key takeaways from each.

“Whither Technological Innovation, Business Dynamism, and Productivity Growth?”

Key Takeaways

  • The U.S. experienced a productivity surge in the 1990s and early 2000s, led by innovation in information, communication and technology industries (ICT), often also referred to as high tech.
  • This rapid productivity growth was accompanied by a surge in startups and business dynamism in high-tech sectors. In fact, evidence shows that the surge in startup formation preceded productivity gains by six to nine years in a given industry.
  • The ICT revolution led to major changes in the products and ways of doing business yielding improved aggregate productivity, but the effects dissipated by the mid-2000s.
  • A slowdown in startup formation and dynamism has accompanied the slowdown in productivity growth since the mid-2000s. The causality likely runs in both directions. Slower innovation induces fewer startups and the decline in startups yields less innovation.
  • Consolidation and the rise of “mega” or “superstar” firms characterize the U.S. economy since the mid-2000s.
  • Yet, since 2020, U.S. business formation has surged. This startup growth includes a surge in high-tech industries, in part reflecting the rise of companies working with AI. This surge provides cautious optimism for future productivity growth.

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John Haltiwanger is the Dudley and Louisa Dillard Professor of Economics and a Distinguished University Professor of Economics at the University of Maryland. Haltiwanger leverages U.S. longitudinal firm-level data to create new statistical measures and analyze the determinants of job creation, job destruction and economic performance. His work examines these firm dynamics and their implications for U.S. productivity growth and the U.S. labor market. His essay explores the ups and downs of innovation and productivity growth in the U.S., discussing these trends and their interplay with dynamism and entrepreneurship.


“Mega-threats as Workplace Disruptors: How Can Organizations Respond to the Effects of Mega-threats on Employees?”

Key Takeaways

  • Mega-threats are highly publicized, extremely negative societal events, where the harm that occurred in the event is viewed as being associated with or connected to the victim’s social identity (e.g., their race, religion, sexual orientation, immigration status).
  • Mega-threats have distinct detrimental consequences for individuals who share identity group membership with an event’s victims. The threat experience is usually connected to a social identity that is ignored, hidden or devalued in organizations.
  • These employees often feel that they have to suppress or hide their personal experience of threat in the workplace, which leads them to withdraw from or avoid investing energy in their work tasks and to avoid connecting with colleagues.
  • Mega-threat events may also trigger workplace mistreatment and discrimination.
  • Organizations and managers could reduce a mega-threat’s negative effects by acknowledging that their employees may be experiencing high levels of trauma in the days after mega-threat events.
  • Open and honest conversations that acknowledge race and other forms of difference are imperative to enhancing employee mental health and work habits. Black and white employees wish to discuss a current mega-threat, or to engage in a conversation that would highlight racial differences, yet many workplace participants do not because they seek to reduce discomfort.

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Angelica Leigh is an assistant professor of management and organizations at Duke University Fuqua School of Business. Employing a dynamic approach to studying race, Leigh explores the behaviors in which racial minority employees engage that go against norms of identity suppression at work, and the actions that these employees take to combat racism in organizations. This essay discusses her recent work, which examines the spillover effects of “mega-threats” – large-scale societal events – on organizations and their employees.


“Culture and Environment for Learning and Development of the Next Generation Workforce in the Age of AI and Robots”

Key Takeaways

  • The advent of artificial intelligence tools necessitates the development of human skills that allow workers to create value that AI tools cannot on their own. It also necessitates new learning systems as traditional educational systems become increasingly ineffective at keeping pace with emerging technological changes and associated skills acquisition.
  • Leveraging all modes of Self-paced, Contextualized, Adaptive and Experiential (SCALE) Learning may be the most efficient approach.
  • Self-paced learners can outperform non-self-paced learners, as self-paced learners choose to allocate their time to learning more difficult subjects, making this mode applicable to organizations that need individuals to learn advanced skills.
  • An adaptive learning system, which personalizes the knowledge to be learned to each learner, is most broadly effective for acquiring new knowledge.
  • Contextualized learning is a foundational learning mode – when what is to be learned is placed in a context that resonates with the learner, learning occurs more potently. Job rotation programs coupled with the learning of specific skills or knowledge may yield the best-developed human resources.
  • A large part of learning is trial and error – positive and negative feedback is needed to adjust and solidify learning. Managers should be deliberate in giving negative feedback, which must be continuous and consistent, and the future benefits of such feedback must be made clear.

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Arvind Malhotra is the H. Allen Andrew Distinguished Professor of Strategy and Entrepreneurship at UNC Kenan-Flagler Business School. His research examines how to craft innovation problems, open innovation approaches, crowd creativity, crowdsourcing for innovation, using crowds to solve complex societal problems, and the future of work. Malhotra’s essay discusses approaches to human learning and development and their relative merits amid the rapid ascent of AI and robotics.


“The Effects of Pay Transparency: A Brief Review”

Key Takeaways

  • In the past two decades, there has been broad-based, steady movement toward enhanced pay transparency.
  • Recent policies can be categorized in one of the following buckets: disclosure of individual salaries, disclosure of gender pay gaps, disclosure of pay bands, salary history bans, and right of workers to talk.
  • Once implemented, these policies may come with unanticipated negative side effects.
  • Requiring companies to report gender-disaggregated wage statistics is shown to reduce the gender pay gap while also reducing overall wage growth. Employers may react to wage transparency with greater reluctance to increase wages for anyone.
  • Wage transparency may reduce morale among workers who make less than their peers. The higher the average wage of one’s peers, the more likely an employee quits their job.
  • Learning that one’s boss is well paid, conversely, has a motivating effect on workers. When employees find out their boss’s high salary, they work more and increase their revenue.
  • Pay transparency policies that disclose identifiable information incur privacy costs. Some employees value their privacy more than they value having pay transparency.
  • Extra consideration should be given to how much information is divulged and how accessible this information becomes. There is need for more research on pay transparency in a wider range of settings, including additional studies in low-income countries.

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Ricardo Perez-Truglia is an associate professor at the University of California, Berkeley, Haas School of Business. His research focuses on income inequality, the gender pay gap, pay transparency, tax compliance and other topics in economics. In this essay, Perez-Truglia reviews recent studies of pay transparency policies and their effects, including both desired and unintended consequences. 


“The State of the Workforce: North Carolina a Market Leader”

Key Takeaways

  • Community colleges serve a vital role in meeting employers’ post-pandemic workforce demands. These institutions must be supported if we are to close the skills gap in the current labor market.
  • North Carolina risks falling short of its goal of producing an additional 2,000,000 workers with high-quality degrees or credentials by 2030, with a projected shortfall of 31,000 individuals, according to a MyFuture NC report.
  • Roughly 40% of all undergraduate students begin their postsecondary study at a community college, and research suggests that community colleges are especially effective in serving workers impacted by COVID-19.
  • To improve their material performance, community colleges require far more engagement from employers.
  • Community college leaders and business leaders set very different values on their partnership’s importance to producing a pipeline of workforce-ready students: 98% of educators surveyed believe a partnership between the two is “very important,” compared to 59% of employers.
  • On August 23, 2023, leaders from the North Carolina’s higher education institutions, businesses and the N.C. General Assembly gathered on a panel, “Seeking a New Labor Market Equilibrium: A Leadership Perspective,” hosted by UNC’s Kenan-Flagler Business School and the Kenan Institute of Private Enterprise.
  • Panelists discussed strategies for discussing the skills gap, collaboration between business and community colleges, state policies affecting strategic workforce initiatives, and other topics pertaining to North Carolina’s workforce pipeline.
  • It is determined that a collaborative approach between community colleges and businesses with a strong focus on adult learners will help North Carolina sustain and grow its workforce while also ensuring workers and companies thrive in the face of new challenges.

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Thomas Stith is CEO of The Michael Thomas Group Inc. and former president of North Carolina’s Community College System. With a career working in numerous industries, including state and local government, higher education, technology, nonprofits, health care, transportation and the energy sector, he is widely recognized as a thought leader on economic and community development, education, small business, investment, non-profit operations and public policy.


“An Economist’s Guide to Immigration Reform”

Key Takeaways

  • The United States is the world’s most common destination for immigrants, but net migration slowed substantially in the 2016-21 period, and our current policies fail to maximize the economic benefits of immigration.
  • Most economists agree that immigration is good for the U.S. economy on the whole. Immigration is critically beneficial to the labor force, the fiscal picture and innovation. The future of U.S. population growth will be entirely driven by immigration flows and immigrant fertility in coming decades.
  • There are two primary legal pathways for migration to the United States: family-based and employment-based. Despite the U.S. population growing by a third since 1990, the numeric immigrant caps for these categories have remained unchanged, creating waiting lists lasting years or decades.
  • For the majority of the 100-plus million people around the world who would like to live and work in the United States, there is no family connection or advanced degree that opens a pathway to a green card. There is simply no queue in which they can “wait in line.” 
  • There are about 11 million individuals living in the United States without legal status. Many have been living and working in the United States for decades.
  • Reform is clearly needed in the form of expanded legal pathways, regularizing the undocumented, addressing short-term fiscal issues faced by some localities, and adequately funding the immigration bureaucracy.

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Tara Watson is a professor of economics at Williams College, a research associate of the National Bureau of Economic Research and a co-editor of the Journal of Human Resources. Her work focuses on U.S. social policy, with interests in the safety net, health and immigration. Watson’s essay discusses the mishmash of U.S. immigration policy and proposes pathways for reform.


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