But today’s Harvard cohort is just as keen to mint its fortunes in a Silicon Valley tech outfit as it is in a New York bank skyscraper. Data released by the school show 8% less MBAs are entering investment banking than before the financial crisis. The number entering technology has surged by 10% to reach nearly 20% of the class.
The Harvard tech trend highlights a great migration away from banking and finance to the innovators of San Francisco Bay. The charm of Silicon Valley, where start-ups enjoy sky-high valuations, is overshadowing a banking sector beset by scandal and onerous regulation.
“While interest in finance has remained strong before, during and after the crisis, we’ve seen some interesting shifts among our MBAs,” said Roxanne Hori, associate dean of corporate relations at NYU Stern School of Business — chiefly a switch to the tech industry.
Demand for MBAs has been on the rise, she added.
Christian Dummett, head of finance careers for London Business School, said: “A small number of high-profile tech companies have been growing their MBA level hiring rapidly,” particularly e-retailer Amazon.
Tech companies have been luring top talent away from banks and even consulting firms with weighty pay packets, but also a better work-life balance.
“Technology companies are often providing similar pay, little to no travel requirements as part of the job, great perks, and increasingly better exit opportunities,” said Chris Weber, associate director for careers at UCLA Anderson School of Management.
Banks have fought back, with more relaxed working policies and higher pay for junior bankers — initiatives launched after the death of a Bank of America intern two years ago.
Yet even those who remain in finance are more open to other areas of the industry. New rules that force banks to stop trading with their own capital are pushing investment-focused MBAs into private equity and hedge funds — sectors that can offer rich rewards.
Financial services has, however, not been able to stem the flow of talent into tech. Technology companies hired a record 43% of Berkeley-Haas MBA students last year.
It is a similar story across Europe. For INSEAD, which has a campus in France, Microsoft hired more MBA students than both Accenture and PwC.
Paul Schoonenberg, head of MBA careers at the UK’s Aston Business School, said that the “relentless commercialization” of technology products and services has given rise to opportunities for his MBA students.
Paula Quinton-Jones, director of career services for Hult International Business School London, said: “Technology companies are seen to be the place of innovation and creativity, and this is really attractive to MBA candidates.”
However, while a handful of large tech firms such as Google and Apple have scooped up legions of business school graduates, career paths are less structured across the tech sector as a whole.
Finance and consulting have well-worn MBA career paths, noted Eric Young, assistant dean for careers at Georgetown’s McDonough School of Business.
“Such paths do not exist in technology in most places,” he said, “and, frankly, tech firms are in my view looking for somewhat more adventuresome souls who want to pioneer new paths.”