By Flint Jurgens

Research from the University of Nebraska–Lincoln College of Business suggests that political uncertainty, often seen as a hindrance to economic stability, may actually have a silver lining. The study reveals that companies tend to increase investment in research and development (R&D) when political uncertainty is high, particularly during closely contested gubernatorial elections.

In the paper, "The Bright Side of Political Uncertainty: The Case of R&D," published in the Review of Financial Studies, Julian Atanassov, associate professor of finance, found that firms see R&D as a strategic growth option in uncertain times.

“This is because R&D functions as a growth option, allowing firms to explore potential future opportunities. If they increase investment when the uncertainty is higher, they have the option to invest more in the future, if there is a favorable resolution,” Atanassov said. “If they do not invest, they will reduce their growth opportunities and lag behind their competitors in the future.”

This finding contrasts with previous research that predominantly focuses on the negative impact of political uncertainty on capital expenditures, mergers and acquisitions, initial public offerings and other corporate decisions.

“R&D is considered as one of the most important contributors to long-term economic growth. Therefore, by influencing R&D investment, political uncertainty has a surprising impact on growth and development,” Atanassov added. Understanding the Link Between Political Uncertainty and R&D

To quantify political uncertainty, the researchers analyzed gubernatorial elections with narrow victory margins of less than 5%.

“The advantage of using gubernatorial elections is that they are outside of the control of the individual firm because gubernatorial elections occur every four years, and the year of elections cannot be changed by the firms,” Atanassov explained. “That allows us to make a causal statement that political uncertainty influences R&D investment and not just document correlations.”

Atanassov illustrated the reasoning with an example: A firm considering an initial R&D investment in solar panels faces an uncertain future due to differing policy stances of two gubernatorial candidates—one who opposes incentives for green technology and one who supports them.

“The value of an initial $9 million R&D investment in a stable environment would have the Black-Scholes value of $7.26 million, which wouldn’t be worthwhile. However, if political uncertainty increases—such as during an election that could change environmental policy—the Black-Scholes value of the R&D opportunity rises to $11.23 million, making it a profitable move.” Implications for Businesses and Policymakers

Atanassov and co-authors Brandon Julio at the University of Oregon and Tiecheng Leng at the Harbin Institute of Technology in China, highlight that businesses in politically sensitive and high-tech industries are the most likely to increase R&D spending during uncertain times. Instead of freezing investments, they leverage uncertainty to prepare for multiple future scenarios.

“This research has important implications for corporate managers, politicians, and policymakers. Our conclusion is that if investment is sometimes positively correlated with uncertainty, policymakers have less reason to be concerned. Warnings that policymakers should reduce lengthy policy debates and political uncertainty because of their negative effects should be made with caution and only after considering all types of investment,” Atanassov said.

By viewing uncertainty not just as a risk but as an opportunity, businesses can use it as a catalyst for innovation, ensuring they remain competitive regardless of the political climate.

By Walter Denmon

The scholarship students of St Gilberts are back for the second season of Boarders, the hit comedy drama that sees five black teenagers swap their inner-city education for an elite boarding school.

At the almost exclusively white private school, Toby, Jaheim, Leah, Omar and Femi find themselves once again fighting against microaggressions, racial stereotypes and tone-deaf peers.

The battles their characters fight are not too dissimilar to what some of them have had to go through in real life.

Josh Tedeku, who plays Jaheim, attended a private school growing up, so knows what it feels like to "be in the minority".

"I wasn't beaten up like my character in Boarders is, but the feeling of not fully belonging was always there - I felt a bit like a fish out of water and isolated at times," he tells the BBC.

Describing his schooling years as "tough", he says he's now "proud that we've given a safe space to people who felt like they were in the minority at school".

The 21-year-old, who has also starred in Rapman's Netflix superhero series Supacell, says Boarders is also an important show as it "represents all different types of black people".

Myles Kamwendo plays Omar, one of the more introspective scholarship students, who finds himself exploring his sexuality and learning to accept who he is.

The 22-year-old says the "characters are really differentiated in the show and the beauty is that everyone can relate to a different character and see themselves in them".

Boarders gave the five leading actors their first major roles and they all tell the BBC they experienced imposter syndrome.

"It's funny because I am so different to my character," says Jodie Campbell, who plays Leah. "I felt a lot of imposter syndrome at the start of series one because I was working with such talented people."

Most of the actors were able to channel their feelings of imposter syndrome into their characters who are navigating how to fit into a school that wasn't built for them.

But Campbell says she wasn't able to do that as her character "doesn't feel any imposter syndrome".

"Leah thinks it's the institution's fault for not welcoming her and she believes she has every right to be there."

As the most outspoken of the scholarship students, Leah refuses to conform to the school's traditions and expectations. She finds herself regularly in trouble for challenging authority figures like the headmaster.

'I laugh at ridiculousness of racism'

In the first series, Leah confronts the entrenched racism at St. Gilbert's by challenging the display of a racist painting and Campbell says it was hard to perform scenes that tackled issues of racism and microaggressions.

"I had to really prepare myself for some scenes," she explains. "I was looking at an offensive painting every day and that was hard but I used that fuel to arm my character".

She adds that it's important for these conversations to be had and Boarders does it well as it "explores those difficult topics through comedy".

Tedeku says he appreciated having other actors similar to him around so that when things got too much they could "group together and laugh at how stupid things are".

"I actually think racism is funny in that I laugh at how ridiculous it is that you can hate someone so much that you go out of your way to make fun of them or single them out all because of the colour of their skin."

The first season of Boarders was largely praised by critics - The Guardian awarded it four-stars and said the show doesn't get "bogged down in conflicts about race and class" and instead "encompasses all the mess and joy of youth, where few people ever really feel that they fit in".

Similarly, The Telegraph called Boarders "razor-sharp" and said it tackles "everything from bigotry to inclusion".

The Daily Mail, however, wasn't impressed, suggesting it was "full of lazy sterotypes" and giving it only one star.

In the new series, the students are pitted against each other as the number of scholarships are to be whittled down from five to three.

Tedeku says he knows what it feels like in real life to be set against his peers.

"There's a sense in some communities that only one person can get up at a time and we can't all go together, but that mindset needs to change."

His co-star Sekou Diaby who plays Toby, agrees and explains that the acting industry "can be a toxic environment".

"Competition is healthy but sometimes it's so aggressive it's as if you're actually fighting each other. It's crazy and backwards to push your peers down."

He believes the arts industry in the UK still has a long way to go and is far behind the industry in the US.

"In America you see more black minority groups working together to achieve something, but in the UK it feels like you're fighting for each other's spot."

Diaby adds that it's even harder to break into the industry if you're from a working class background as "there's a lot of nepotism in the industry".

"But being different is also really powerful because your point of view is rarer in the industry so your take on things will be more unique and that's what will make you stand out."