In the late 1980s, William Davidson, owner of Guardian Industries, opened a glass manufacturing plant in communist Hungary, at the time considered one of the more progressive countries in the Soviet bloc.
“He was struck by how little they knew,” said Ralph Gerson, a former Guardian executive and chairman involved in the negotiations and a WDI board member since the institute began. “They did not have any sense of market principles or have a clue on how assets are properly valued.”
When the Berlin Wall was peacefully toppled a few years later, taking the Soviet Union with it, Davidson wasn’t sanguine about the future. He was convinced former Soviet bloc countries would struggle to evolve from a command economy to a free-market one, and an institute at the University of Michigan could help ease the transition.
“The view at the time was that the stakes were high because if market economies didn’t develop well in central and Eastern Europe, then we thought there might be backsliding to communism,” said B. Joseph White, who at the time was dean of what is now the Stephen M. Ross School of Business.
Twenty-five years ago this week, Davidson donated $30 million to create the William Davidson Institute at U-M. At the time, it was the largest gift to a U.S. business school. WDI is a separate non-profit — an arrangement that remains unique within U-M.
WDI’s early focus included designing seminars for senior business leaders, entrepreneurs and government officials from countries with economies in transition. It also provided internships for U-M students to work in Poland and the former Soviet republics, while funding fellowships for university scholars to work intensively on the ground.
By the early 2000s, the transition in central and eastern Europe had progressed and economic reforms in such places as China, India, Africa and Latin America were bringing new business opportunities and challenges to light. This led WDI’s board to expand the institute’s mission to encompass “emerging economies” around the world.
In just the last year, WDI has worked in Bahrain, Cuba, India, the Philippines, Latvia, Madagascar, Mozambique, Nigeria, Peru, Rwanda and Senegal. Projects range from training entrepreneurs in Morocco to analyzing supply chains to improve access to vital medicines in Madagascar.
The institute’s portfolio of research initiatives includes education, financial sector development, health care, performance measurement and scaling impact. Each is tasked with developing market-based solutions, evaluating and implementing solutions through fieldwork, and sharing the findings. WDI Publishing professionally writes, edits and publishes business case studies and other teaching materials for top-tier universities globally.
The institute often acts as a bridge for academia, business and government. For example, as part of the Goldman Sachs 10,000 Women initiative, WDI trained 330 women entrepreneurs in Rwanda. Its Scaling Impact Initiative recently worked closely with Wal-Mart to research successes and challenges in its efforts to incorporate smallholder farmers and female artisans from developing countries into its global supply chain.
WDI also is actively engaged in the student community, sponsoring internships and more than 230 multidisciplinary action projects through Ross during the past two decades. The institute partners with professors and researchers around the university who bring specific expertise to projects.
“Tapping into and connecting University of Michigan faculty has always been an important part of our approach and that has only increased as the number of countries we are focused on increases,” WDI President Paul Clyde said.
Over the years, WDI researchers have worked with government development groups like the U.S. Agency for International Development and non-government organizations like the Bill and Melinda Gates Foundation to engage business.
Development-aid budgets are poised for significant cuts under the Trump administration, as well as in other countries. While businesses are increasingly partnering with nonprofits in low- and middle-income economies, it’s clear the private sector will play an even bigger role in the future.
“Bill Davidson recognized the private sector as an element that was missing from the work being done with transition economies 25 years ago,” Clyde said. “It remains just as important today and as we have developed processes and approaches, we have been able to apply it to more economies.”
Currently based at Domino’s Farms, WDI’s staff of 38 is preparing to move back into newly renovated offices in Wyly Hall on Central Campus in May.
As part of the yearlong celebration of its 25th anniversary, WDI will host speaker Sir Angus Deaton, a Nobel Prize-winning economist from Princeton University whose work has changed how many think about both global wealth and health. The event, which is free and open to the public, takes place Oct. 5 in Robertson Auditorium at the Ross School.