Business education is entering the age of the digital economy. Silicon Valley’s method of innovation and venture creation is gaining ground with academics. As business shifts to new ways of working with tech, business schools are updating content and learning methods.
Engineering and computer science departments are being meshed with management schools. Innovation and entrepreneurship are now championed. A/B testing, data analytics and computer science are breaking into business curriculums.
On Roosevelt Island, a strip of land in New York City floating between Manhattan and Queens, construction is underway of Cornell Tech, a $2 billion high-tech university. It will offer start-up-focused curricula in both business and tech.
Cornell is responding to trends. From banking to retail and from automobiles to telecoms, companies are harnessing the power of digital. Big data, cloud computing and analytics are key themes.
Digital skills are now required in most industries. Managers must become more tech savvy to stand out in a digital-fuelled world. A survey by SAP found that 28% of workers used predictive tools regularly, with the figure expected to rise to 42% over five years.
In response, business schools are becoming more adaptive. Many run master’s programs in business analytics. They have also adopted the digital mantra of venture creation, with specialist programs in entrepreneurship, while electives in innovation are also common.
“[We] are seeing especially strong interest,” says Kalyan Talluri, director of the MSc in Business Analytics at Imperial College Business School in London.
“All businesses are affected by the new surge in data, and are scrambling to take advantage of it and make sense of it. Analytics is a necessary part of business school education now,” he says.
Today’s generation of managers – “digital natives” – are increasingly finding careers at technology companies. Amazon is now typically the largest recruiter of MBA students.
At the US’ Tuck School of Business 60% more technology companies are hiring this year than last, according to Jonathan Masland, director of career development.
This reflects the growing pool of MBA candidates that come from STEM stock – science, technology, math and engineering.
According to a 2014 survey of 5,604 business school applicants by education research group QS, 5% more tech employees and 0.3% more engineers were opting for business education than in 2013.
An electrical engineer by trade, Antonio Gallo Toro now spends his days in the Dubai sunshine. A graduate of MIP Politecnico di Milano, the Italian business school, he put his engineering degree to work at Mitsubishi Electric, the equipment manufacturer.
“I needed to add skills in terms of sales and marketing, skills to manage people and teams to reach goals,” says Antonio, who manages the Middle Eastern area for the Japanese company.
“[Gaining] knowledge about commercials or marketing from an engineering perspective, based on the engineering culture at MIP, was the perfect thing to do,” he says.
As well as Cornell Tech a cadre of other business schools are developing engineering-business courses. Michigan’s Ross School of Business in the US, for instance, has a Masters in Entrepreneurship taught jointly with Michigan’s engineering school.
Ross offers 62 entrepreneurial-related courses, and 20% of graduate students have started business plans, according to Mary Nickson at the Zell Lurie Institute for Entrepreneurial Studies, with 5% already launched. “The majority will launch within 5 [to] 10 years of graduation,” she says.
Stanford GSB, a Bay Area darling, has an expanding roster of entrepreneurial business programs taught in collaboration with technology groups Infosys, Cisco and Microsoft.
According to Yossi Feinberg, director of the program series – dubbed Ignite – it is set to draw corporate innovators and venture creators. “It provides graduate students, innovators, scientists and engineers… The essential [start-up] toolset,” he says.
The US’ Tepper School of Business recently formed an Integrated Innovation Institute, bringing together MBA candidates with students from its College of Engineering and its School of Design.
Long regarded as factories for bankers and consultants, more MBA programs are adopting this Silicon Valley blend.
In 2013, for instance, Oxford’s Saïd Business School began a review of its MBA curriculum to assess its relevance. It radically overhauled the program, turning to a focus on entrepreneurship, among other themes.
“Entrepreneurship is a mind-set from which all organisations doing business in the 21st century can benefit,” says Dana Brown, MBA program director at Oxford.
“The forefront of management practice remains ahead of the science and teaching curve,” says Joseph Pistrui, professor of entrepreneurial management at IE Business School in Spain.
Business students increasingly want to create their own ventures. Corporate careers are less attractive. MBA graduates are founding start-ups in tech, healthcare and even consulting.
At Wharton in the US, 55 MBAs last year become founders or self-employed, up 50% from six years ago. At the Rotterdam School of Management in Europe, 25% of all graduates are active entrepreneurs.
But critics have labelled the MBA degree as too generalist and out-of-date. The price tag – which can be upwards of $100,000 – has been known to turn entrepreneurs cold.
Growth has been slow, while applications for computer science and math graduate programs have increased – by as much as 11%, according to the Council of Graduate Schools.
Many business schools are rolling out new and innovative programs but others are struggling to keep up with the pace of change.
Business increasingly needs digitally skilled managers. According to a report by Capgemini, the consultancy, 77% of companies consider the lack of digital skills a hurdle to their digital transformation.
But by adopting a Silicon Valley style of teaching educators can prepare students for the feast of career opportunities in sectors ranging from media to consulting, both parts of the digital economy.
Joseph believes business schools will move toward a “laboratory environment” where testing ideas becomes more important than traditional analysis and solutions.
“This of course is part of a wider trend in business, away for the more algorithmic approach to problem solving [and] toward a more explicit emphasis on developing the entrepreneurial capacities of managers,” he says.