The digital revolution in business is creating new revenue streams for companies but it is the generation of “digital natives” that is set to profit.
Most global brands are attempting to reinvent their industries by offering new digital services, creating new sales channels and utilizing technology to reach new global customers.
In the course of doing so, they are opening up career opportunities for tech-savvy business managers in departments and services areas that did not exist until several years ago.
According to a report by Capgemini, a consulting, tech and outsourcing group, 77% of companies consider the lack of digital skills a hurdle to their digital transformation.
Michael Brice, a graduate of Melbourne Business School’s MBA, comes from the stock of PwC, the leading professional services firm. But, like many of Australia’s digital generation, he left the auditor to launch a start-up consultancy to provide tech services.
“For me, it’s all about how you use tech to interact and improve productivity,” says Michael. “People say they want to be digital but don’t really know what that means. I’m about unlocking potential,” he says.
The pursuit of unlocking digital knowledge is driving a demand for highly skilled graduates. Financial services group American Express (Amex), for example, wants to hire 250 MBAs in 2015 as part of its “digital transformation”.
One reason for this growth is the sheer pace of technological change. Tech is innovating industries from retail to banking to media.
According to the McKinsey Global Institute, the top three companies in Silicon Valley in 2014 had revenues of $247 billion and a market capitalisation of $1.09 trillion. This age of hyperscale businesses demands unique management.
The Bay Area is home to more digitally-led companies than cities in most of Europe and the UK. But business schools say there are opportunities for MBAs to make their mark across the globe, especially in management consulting, according Stephan Weidinger, corporate development manager at HEC Paris.
“Young MBAs can bring a new mind-set and understanding of digital contexts into consulting organizations,” he says. “Knowledge of digital services will be a must have requirement for all consulting jobs,” he adds.
A surge in hiring at the tech arms of large strategy houses including Accenture and Deloitte is driven by the revenues of new service channels.
According to the Management Consultancies Association (MCA), digital and technology services increased their share of consulting revenues by 6% last year, accounting for a quarter of income.
“We’re seeing across the industry more appetite for recruiting people with core digital skills,” says Paul Connolly, director of the think tank of the MCA, which represents management consultancy firms in the UK.
It is not just advisory groups that are placing more value in digital. A recent MCA Think Tank survey of business executives found that nine out of 10 think digital is of high importance to their companies.
The digitization of the media industries is one such business area in need of managers. Executives say there is a skills shortage on the horizon, and business schools have established specialist media management MBA programs.
“There may be a major opportunity in big broadcast media… An MBA with knowledge of the industry will indeed be a valuable asset,” says Rob Bolton, a digital marketing manager at Warner Music, and lecturer on the Arts and Media Administration MBA at Schulich School of Business.
Cable companies are shifting content online. HBO recently announced a new standalone digital service, while online distributors such as Netflix, Amazon and YouTube are growing.
“The field of digital, on-demand video services is a prime area of career opportunity for graduates,” says Tim Holmes, who helped to develop the MBA in Media Management at Cardiff Business School.
These increasingly digital “creative industries” – which include broadcast, film and advertising – increased employment by 8% between 2011 and 2012 in the UK, according to figures compiled by the Department for Culture, Media and Sport, a much higher rate than for the UK economy as a whole.
Global advertising and marketing companies have also been expanding their hiring to cope with the pace of digital growth, including WPP, the world's biggest advertising group, which says it values MBA students who are skilled in data analytics.
According to Maurice Lévy, CEO of listed French advertising company Publicis Groupe, to be a pioneer in today’s world of advertising people need to have a high “technology quotient”.
The chief executive told an audience of business students in Berlin last week that he has “heavily invested” in digital, and that as the world “continues to digitalize”, companies need to take fast decisions. “We are living in a time of speed,” he said.
Leading technology companies have also become the biggest employers of business school graduates. At Wharton, nearly 14% of 2014’s MBA class were hired by tech firms, up from less than 6% in 2010.
Microsoft takes 75 MBAs a year onto its internship program, and recruits about 300 students into full-time roles, while online retailer Amazon has been the biggest recruiter at a bevy of European schools over the past two years.
Miriam Park, Amazon’s director of university recruiting, says: “MBAs are very strong problem solvers and analytical thinkers, which makes them a really great leadership pipeline. We see MBAs thriving at Amazon because they love taking ownership of big projects and solving hard problems for our customers.”
Despite the excitement, the financial world increasingly feels the threat of digital.
According to a survey of 198 senior banking figures worldwide conducted by Temenos, a Swiss banking software company, 23% described online merchants such as fintech groups as their biggest threat, more than those who saw existing rivals as threats.
Digital services such as mobile banking have been a huge growth area. According to figures compiled by the British Bankers’ Association and EY, the consultancy, almost £1 billion of mobile and internet transactions are processed each day in the UK alone.
Financial services hiring in London is being driven by banks’ digital agendas, according to Astbury Marsden, a recruitment firm.
Amex has opened up its recruitment process, and the firm is targeting business schools in the US, UK and India, says Brian Ruggiero, vice president of global campus recruitment.
“In reality, American Express is in the midst of an exciting digital transformation… [And] this presents endless opportunities for MBA grads,” he says. “[We have] needed to hire more people who can help us transform our business to lead in mobile payment… And expand our digital service offerings,” he adds.