The information age is upon us. Technology is disrupting traditional business models everywhere. Innovation is transforming industries from financial services to retail and from music to telecoms.
The companies that are uprooting established frameworks are raising large investments and are making fat profits, but growth is often dependent on sourcing talent.
As business schools update their content for a decade in which tech is king, they are establishing themselves as feeders for companies like Google, Apple and Amazon.
“The combination of understanding the technology and developing a strong business skill-set is a powerful asset for an organization,” says Sue Kline, senior director of the Career Development Office at MIT Sloan School of Management in the US.
MBA degrees’ austere management learnings once contrasted with the start-up culture found in disruptive businesses like Uber and Airbnb. But the increase in provision of electives such as data analytics mean MBAs are increasingly fit for Silicon Valley.
Schools close to the nascent tech centre in California, such as Berkeley’s Haas School of Business and Stanford GSB, are well placed to develop closer ties with Bay Area companies.
Increasingly, similar innovators in Europe’s cities are looking to business schools to bolster their management teams. There is increased demand for hiring MBA students in particular.
“There is a definite increase in interest from five years ago, in line with the increase in visibility of tech start-ups and tech-based businesses,” says Paula Quinton-jones, director of career services at Hult International Business School, which counts London as one of its bases.
A recent survey of 33,000 employers by QS, an education and research firm, found that many big-name consulting and technology groups plan to hire more MBAs this year.
Kyle Ewing, head of global staffing programs at Google, says that the company values all levels of education. Google looks for MBA candidates who show creativity and passion, he says, “and a healthy disregard for the impossible”.
“MBAs find plenty of opportunities to do cool things that matter," he says. "Whether in product management, sales and finance, marketing, people operations, and everything in-between."
Angel Herrera is a former equities trader and asset manager with seven years’ experience, including managing wealth for clients in Madrid in funds totalling €95 million. Now he is a Googler, managing strategic partnerships for the internet search giant across Spain.
He graduated from Hult's MBA program last year and says that a business education was crucial for him to make the transition from financial services to tech.
He is not the only one to think so. More graduates are shunning traditional careers for dynamic roles at technology groups.
Technology companies hired a record 43% of Haas’ MBA students in 2014, up from 33% a year earlier. At UCLA’s Anderson School of Management, 26% of MBA students were employed in the tech industry last year.
At London Business School, Amazon was the third-largest recruiter in 2014, ahead of Citibank and Deloitte. At INSEAD, a global business school with a campus in Europe, Microsoft hired more MBA students than both Accenture and PwC.
MBA students are desperate for a tech fix. This is because managers want to pursue careers in organizations that are fast-moving and which engage directly with consumers, according to Eric Young, assistant dean of Georgetown University’s MBA Career Centre.
“Technology is invading and disrupting how business is done,” he says. There is often a perception that hundred-year-old companies are slow, formal, and old-fashioned, he adds. “MBA students must be OK with ambiguity and fluidity.”
The culture in technology companies is different, according to Angel. When he joined Google, he was shocked to find that nobody judged one another by appearance.
“[But] the main stereotype of [Google] being a company full of laid back tech guys is completely false,” he says, people want to progress.
There are strong financial incentives to do so. Tech groups are often fast-growing and valuable. Apple this month broke records by becoming the first US company to record a stock market valuation above $700 billion.
Of the five most valuable companies in the world, three are in the tech sector – Google, Microsoft and Apple.
“MBA students are tuned to the market,” says Michael Goul, chair of the Information Systems Department at W.P Carey School of Business in the US. “Information technology is transforming organizations – and this is not escaping them.”
Many technology firms offer new hires equity in the company, with the shares vesting over a number of years. Salaries are also equal to banks. The QS survey found that MBAs in the tech sector earn $94,950 in annual salary – more than the global average.
Smaller technology firms too are hiring strongly – across sectors. “These companies and their new business models force more established companies across industries to innovate in order to compete,” says Eric at Georgetown.
Disruptive start-ups have also increased their hiring in Asia, with the burgeoning e-commerce industry in India scooping up larger numbers of business graduates in recent years.
At the Indian Institute of Management in Ahmedabad, about 27% of the MBA class accepted summer internships in e-commerce and IT firms, such as Flipkart and eBay.
“We have seen a rise in e-commerce hiring on campus. Not only are we getting more such companies wishing to hire, [but] they are also making [a] larger number of offers,” says Sapna Agarwal, head of career development services at IIM Bangalore.
For start-ups, MBA recruitment is still new territory, but they value fresh outlooks and the broad business knowledge that MBAs bring to the table, says Paula at Hult International.
The difference is in how students find the opportunities – larger firms rely on on-campus recruiting, while start-up businesses use personal connections, with MBA students utilizing databases and networking to get hired, says Sue at MIT Sloan.
The great migration to the technology industry may also be the result of the increasing number of people from tech and engineering backgrounds that are in MBA cohorts.
They are well placed for careers in the new digital economy, says Michael at W.P Carey.
Business schools have adapted their content for the information age, adding new courses that focus on innovation, entrepreneurship and big data, for instance.
An understanding of big data in particular is increasingly important to technology companies, and this may give graduates an edge in the jobs market.
Sal Vella, vice president of cloud foundational services at IBM, says that enterprises across all industries are under increased pressure to extract new insights from data.
“Critical to that effort is the development of business leaders who are skilled in analytics,” he says.
Ultimately, technology companies seek MBAs that are team players, are resourceful, independent, and have entrepreneurial tendencies, according to Eric at Georgetown.
“Technology helps solve more complicated problems, and MBAs are natural problem solvers,” he says.
Yet while technology is dominant, it is unlikely to overtake the more established industries that provide MBAs careers, such as management consulting or financial services, say careers officers.
“These are established industries with well-worn MBA career paths. Such paths do not exist in technology,” says Eric.