philip r lane : the academy and the economy remarks by mr philip r lane, governor of the central bank of ireland, to the trinity business + technology forum 19, trinity college dublin, dublin, 23 may 2019. * * * introduction i am pleased to be invited to speak at the trinity global business + technology forum 19, especially on the occasion of the opening of the new trinity business school building. let me start by commenting on the important potential economic and social contributions of business schools, before turning to the more general role of universities. first, high - quality business education and training at all levels ( undergraduate, postgraduate, executive education ) is a significant determinant of living standards and economic performance. on this point, the most compelling evidence has been generated by the long - running world management survey, which measures the contribution of management practices to firm performance in a large - scale cross - country cross - industry panel of firms ( worldmanagementsurvey. org ). the many studies that have exploited this dataset conclusively show that a major factor driving productivity differentials across countries and across firms is the quality of management. second, business education is especially pivotal in countries that specialise in the provision of business services on an international scale ( see also mckinsey global institute 2019 ). this broadly describes the irish economy, with the irish affiliates of multinational firms ( plus the domestic ecosystem of supporting professional services firms ) typically providing a range of business services to the global operations of these companies and many irish firms exporting business services to overseas clients. third, business education is itself a significant export activity, with irish business schools and universities educating many international students, both locally and through a range of external partnerships. fourth, given the importance of the business sector in delivering essential and socially - valuable goods and services, business schools have a special responsibility to ensure that their graduates are properly equipped to fulfil their social and ethical responsibilities to wider society. fifth, the diversity and dynamism of the business sector constitutes a gold mine for research across a wide range of disciplines. this is especially true for a business school that is an integral part of a full - scale university, in view of the high potential of multi - field approaches in understanding both the drivers of firm performance and the economic and social impact of business. this last point is well illustrated by today ’ s event. a basic function of a university is to explore the inter - connections across different fields of knowledge : the agenda and list of participants for

this forum vividly illustrates the wide range of disciplines that are relevant in exploring the myriad economic, business and social implications of technological innovation and digitalisation. this also holds true for another topic that was discussed in this morning ’ s programme : climate change. universities have a vital role to play in tackling the implications of climate change, in view of the all - encompassing nature of challenges posed by global warming. these topics – the technological revolution and climate change – are also central to the work of the central bank of ireland. in relation to the technological revolution, this is relevant for all parts of our mandate. in terms of macroeconomic performance, the global technology - producing sector is a major driver of 1 / 5 bis central bankers'speeches employment, productivity and tax revenue in ireland, while all sectors in the economy must respond to the changes in market structure and consumer preferences induced by technological change. of course, the financial sector is among the most prominent sectors affected by these developments. this is natural, since information processing ( in a very general sense ) is the defining characteristic of financial services and digitalisation constitutes a paradigm shift for the whole sector. incumbent firms that wish to survive and prosper must invest heavily in it in response to the entry of new providers of financial services ( the fintech sector ) and the expansion into financial services by the major technology firms ( the bigtech sector ). in this contest between existing firms and new entrants, the role of regulators is to ensure that all providers of financial services meet regulatory requirements, since households and firms in choosing their providers should be able to rely on a common set of expectations about the prudential and conduct standards of all firms. to this end, the central bank of ireland ’ s innovation hub provides a platform that helps fintech firms reconcile the deployment of new financial technologies and compliance with regulatory requirements. the digital transformation of financial services also poses new supervisory challenges. for instance, a high priority is the monitoring and remediation of operational risk, in view of the potential damage caused by systems failures in the provision of digital services. in addition, new methods of delivery ( such as robo - advisors in financial planning ) must be carefully assessed to ensure that an appropriate balance is struck between the potential gains and possible new types of risk. the shift towards electronic payments and the emergence of many new providers of e - payments services is enabled by the back - end plumbing provided by the real - time gross settlement ( rtgs ) systems maintained by central banks