MIT Sloan School of Management of the US is tapping into the fast-growing Malaysian economy with the establishment of a new business school in Kuala Lumpur – a joint venture with Bank Negara Malaysia, the country’s central bank.
The Asia School of Business, which will run a traditional two-year MBA program, is the latest push by a top western business school into the Southeast Asian region as markets in the US and in Europe stagnate.
“We view the founding of the ASB as an opportunity to help shape the next generation of leaders in this rapidly-developing region,” says David Schmittlein, dean of MIT Sloan.
The high-ranking US school joins a collection of western institutions educating across Malaysia – among them Henley Business School, Strathclyde Business School, Nottingham University Business School and Edinburgh Business School. MIT Sloan has partnered schools around the world, helping to accelerate the growth of smaller players.
Bank Negara Malaysia has made several large investments in the education sector over the past decade, including a school for Islamic finance. Dr Zeti Akhtar Aziz, governor of the Bank, says the new venture hopes to advance the frontiers of innovation and entrepreneurship in Asia.
“The rapid growth and remarkable resilience of Asia in recent decades has significantly increased the importance of the region in the global economy,” she says.
ASB will address a shortage of management talent at a time of rapid economic growth in the Association of Southeast Asian Nations. ASEAN, comprised of 10 countries, has combined gross domestic product of $2.4 billion and combined population of about 600 million.
But Dr Zeti warns: “While the journey ahead for Asia has tremendous promise, businesses will need to rise to new challenges arising from the changes that are reshaping the regional and global environment.”
As Malaysia transitions to a high-income economy, professional talent is increasingly in demand.
Angeline Chivapathy, MBA program director for Edinburgh Business School in Malaysia, says that business schools are the best avenues for closing gaps in managerial demand. “This is increasingly accepted in any area of technical expertise.”
Edinburgh Business School’s MBA program has been delivered by UK and Malaysian faculty at the Heriot-Watt University Malaysia campus in Putrajaya since January 2013.
Angeline says Heriot-Watt University Malaysia has seen an increase in applications for undergraduate courses. “We also expect a growing interest in the MBA from prospective students in Indonesia, due to the geographical closeness of the countries.”
Malaysia’s thrust towards an innovation-led economy has brought on the need for the implementation of commercially–viable research.
One of the challenges in implementing these changes is a lack of internationally educated professors and PhDs. But high levels of bureaucracy, and long teaching hours, makes this difficult to achieve in Malaysia, according to Eileen Peacock, chief officer for Asia at AACSB, the business education accrediting body.
But she adds: “Malaysia has done extremely well in terms of being an education hub. Students in Asia are staying in Asia.”
For Australian business schools nearby, Malaysia has proved a fertile hunting ground.
Melbourne Business School opened a regional office in Kuala Lumpur to develop its activities in ASEAN. Its efforts have generated results: the school has seen growth in its executive education client base, and new research opportunities for faculty, says Dr Ian O Williamson, associate dean for international relations.
By establishing partnerships with high-ranked business schools outside of Asia, local educators in Malaysia can tap into global talent.
ASB will ultimately have its own faculty but in the short-term, professors from MIT Sloan will teach at the school and provide guest lectures.
ASB faculty will have exchange opportunities. Professors will spend time at MIT’s Cambridge campus, participating in activities designed to boost teaching effectiveness and improve research, the business school says.
In year one ASB will be housed within Bank Negara Malaysia’s headquarters, located on the fringes of Kuala Lumpur’s business district. Students will live at its residential campus, but architectural plans are underway to build a new campus on nearby land, MIT Sloan says.
Charles Fine, professor of management at MIT Sloan who will serve as the founding president and dean of ASB, says that students will emerge with a deep understanding of the business, political, and economic issues that come to play in ASEAN.
He says: “Every class that we offer and every lecture that we give will be intimately connected with the companies and institutions in the region.”
As part of the collaboration, ASB students will also benefit from spending four weeks on an educational exchange program at MIT Sloan, and will visit companies in the Boston area.
The business school, which is scheduled to open in September 2016, will host an inaugural class of 25 to 35 students into a two-year MBA program.