Frederick W. Smith, chairman and chief executive officer of FedEx Corporation, shared key insights on how the economy is—and is not—working in a keynote presentation at the First Tennessee Foundation’s Sixth Annual MBA Symposium, hosted by the University of Tennessee’s Haslam College of Business Nov. 12. Smith pointed to innovation, investment and energy as the formula for restoring America’s economic growth.
“People who invent, innovate and invest are the job creators of the United States,” said Smith. “We’ve been eating our seed corn by consuming more than we invest. Economics is not that hard. A below-par investment in software, equipment and public construction equals below par economic growth.”
To spur economic growth in the U.S., Smith emphasized the need to promote tax policies that stimulate capital investment and to level the playing field among trading partners—particularly focusing on the huge trade imbalance with China. He also urged a coordinated energy policy that maximizes U.S. petroleum production and decreases transportation petroleum dependence through efficiency and alternative energies.
“In our opinion at FedEx, domestic oil and gas production is the most important reason why the U.S. is experiencing a modest economic recovery while Europe is doing poorly and China, the locomotive of Asian growth, has slowed down considerably,” Smith said. “Without the fracking revolution that began when Texas wildcat oilman George Mitchell developed the technology to extract oil from rock formations, we would have little economic growth in the U.S. today.”
Although gas prices have declined in recent weeks, Smith cautioned audience members not to forget the far-reaching consequences of reliance on foreign oil. “People forget that in the summer of 2008, oil went to its highest price in history, $147 per barrel,” he said. “That meant a lot of people with subprime mortgages couldn’t afford to buy gas and pay their mortgage. The increase in gas prices was the match that lit the 2008 subprime bonfire that sparked the recession.”
First-year UT MBA student Michael Hromadka said he felt fortunate to be able to learn from a global business leader of the FedEx chairman’s stature. “The UT Full-Time MBA program emphasizes the importance of developing both hard skills, such as finance, and soft—less quantifiable—skills like leadership,” said Hromadka. “Being able to listen to Mr. Smith is a unique learning opportunity for students because one day soon we will be the ones developing and implementing strategies to improve our companies, our communities and our country.
Funding for the annual UT MBA Symposium was provided by the First Tennessee Foundation, a private charitable foundation. Since its formation in 1993, First Tennessee Foundation has been committed to building a better Tennessee by awarding more than $55 million to nonprofit organizations serving Tennesseans. To plant the seeds of success in the state, about one-third of foundation giving goes to education and lifelong learning.
Pam Fansler, east region president for First Tennessee, said the opportunity to introduce the next generation of East Tennessee business leaders to the FedEx chairman and CEO was particularly meaningful since Memphis-based FedEx leads the list of the ten Tennessee companies included in the 2014 Fortune 500 rankings, and is the largest public company in the state. “The First Tennessee Foundation is very pleased to be able to sponsor the UT MBA Symposium, and having the opportunity to welcome Frederick W. Smith here to speak to the MBA students and our local business professionals truly is a once-in-a-lifetime opportunity.”
Previous UT MBA symposium speakers have included Berkshire Hathaway chairman and CEO Warren Buffett, Texas oil and gas executive T. Boone Pickens, former U.S. senator and Secretary of Labor and Transportation Elizabeth Dole, and former Secretary of State Colin Powell.
Smith also provided the keynote address at the Global Supply Chain Institute’s Supply Chain Forum, which included nearly 200 representatives from more than 60 member companies.
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