Lessons from a global innovation hub

Business schools in the US are one example of that country?s global leadership in higher education. In the last few decades, the MBA degree has become a signal of having a particular skill set that corporations seem to covet. Many Indians have followed the route of pursuing graduate management education in the US, often following a first degree in engineering. These individuals have started to occupy key leadership positions in US corporations, in business schools, and in entrepreneurial ventures in places such as Silicon Valley.

The success of US management education has not precluded criticism. Some argue that US business schools are too focused on research, and have lost their connection to ?real world? issues. Others see them as dysfunctionally focused on media rankings and superficial marketing fixes. Prospective students and sponsoring employers are beginning to balk at the increasing cost of acquiring the coveted MBA credential. Meanwhile, global competition has intensified, as imitators have sprung up in Europe and Asia, often with their own innovations, including more global perspectives, and better industry linkages. As one might expect from places that teach management, business schools are constantly seeking to cater to the demands of the marketplace, adjusting curricula and delivery methods. Part-time degrees, executive programs, distance learning, educational joint ventures, and interdisciplinary approaches are among the newer developments.

Recently, Kyle Eischen and I undertook a study of the trends in management education, eliciting the views of business school faculty and administrators, and particularly those of Silicon Valley executives. We wanted to understand the global trends that will shape the demands on corporate managers over the coming years, and how well business schools are perceived to be responding to these evolving needs. Silicon Valley is an important test case, as a global innovation hub that regularly spawns new ideas and new businesses. It is also distinguished by its venture capital industry, and the presence of talent from all over the world, especially India and East Asia. It is home to two world-class business programs, at Stanford and Berkeley. At the same time, the Valley has explicitly relied on technological rather than management innovation, and technologists sometimes have an uneasy relationship with the finance, accounting and marketing graduates of business schools. The disconnect is exacerbated by the fact that much of the business school talent in Silicon Valley continues to be imported from elsewhere.

What did our study reveal? Silicon Valley executives recognise and respect the ability of business schools to turn out graduates with strong analytical and functional training. However, these skills are almost taken for granted ? in a way, a measure of the success of the MBA model. What executives were looking for was something more: they saw abilities to manage across cultures, communicate effectively, lead and motivate, integrate techniques across functional areas or disciplines, negotiate, and deal with emerging markets, as areas which are very important, but not ideally handled by business school curricula. This perspective reflects the globalisation of business in general, and of Silicon Valley in particular, but the challenges are seen to go beyond narrow approaches to managing global information systems or supply chains. Another aspect of management emphasized by Silicon Valley executives had to do, unsurprisingly, with technology. However, the lessons were subtler than just reinforcing the importance of technology, innovation, or intellectual property rights. The issue that concerns executives is how to manage all aspects of knowledge and the innovation process to develop and commercialize products in a world where technologically complex products have to work within complex systems. The globalisation and fragmentation of value chains only compounds this complexity.

The message from executives was remarkably clear and consistent. It remains to be seen how quickly and how well US business schools, whether incumbents or new entrants, will respond to evolving business needs. They are certainly trying. UCLA offers a program that includes time in Shanghai and Bangalore. Yale plans to require a semester abroad for all its MBA graduates. Wharton is building global alliances and establishing outposts in the Pacific Rim. UC San Diego has established a new business school that aims to integrate closely with local technology firms in telecom and biotechnology.

In this ferment, there is a huge opportunity for India?s management schools. The global need for management will only grow, as knowledge becomes an ever-more important component of economic activity. And as manufacturing continues its shift to Asia from the US and Europe, training managers so that they have some experience in Asia will become more important. European business schools successfully responded to US innovations in management education, with their own offerings that were more industry-linked, focused and global. India?s business schools have the advantage of the country?s newfound reputation, a strong alumni base, and facility with English. What they need are resources, stronger industry linkages, and a supportive policy environment. India?s government should be proactive in allowing foreign collaboration, encouraging industry participation and helping Indian management education to be at the cutting edge of the latest transition. Finally, lest one dismiss this as an elitist recommendation, compounding India?s past policy tilt toward higher education, note that a large percentage of managers we surveyed viewed ethics and social entrepreneurship as important areas for management education. Silicon Valley?s ethos has always included making the world a better place. Google?s informal motto is ?Don?t be evil.? Many of Silicon Valley?s newest entrepreneurs would say, more positively, ?Do well while doing good.? Strengthening their existing Indian links through India?s business schools will do India some good.

?Nirvikar Singh is with the University of California, Santa Cruz. These are his personal views