Business schools have not always been bastions of entrepreneurship. But there are signs that many are trying to hone their entrepreneurial ecosystems.
The latest indicator of this shift is the news that MBA students are spurning placements at blue chip firms for internships at start-ups, which offer the prospect of rapid growth and the potential of becoming “unicorns” — ventures valued at $1 billion.
The unprecedented move speaks volumes for the outlandish career aspirations of the millennial generation, but also the difficulty universities face in educating youngsters who see their futures in entrepreneurship rather than corporate drudgery.
“Students are attracted to very high-growth businesses that offer rapid career progression, the opportunity to innovate, and the chance to make a big difference,” says Katharine Boshkoff, vice president of global career development at Hult International Business School.
Not only is there a “significant jump” in graduates’ participation in start-up companies, as Katharine puts it, but mid-career professionals who would once aspire to work at a bank or consultancy firm are keen to explore their entrepreneurial ambitions.
“The demand for entrepreneurial education has grown significantly, but also interest in entrepreneurship as a career path has been embraced in a way like never before,” says Bethany Coates, assistant dean at California’s Stanford Graduate School of Business.
The financial crisis forced many workers in developed countries to establish their own ventures for fear of a lack of jobs. But as the global economy begins to recover, and as job creation accelerates, optimism around entrepreneurship is still on the upswing, argues Donna Kelley, professor of entrepreneurship at Babson College in the US.
“We seem to be holding steady,” she says. “Far more entrepreneurs are driven by the prospect of opportunity, rather than needing to create an income because they have no sources of work.”
For business schools everywhere, the rate of entrepreneurial take-up has been rapid. At MIT Sloan School of Management, 36% of a recent MBA class founded companies. At Vlerick Business School in Belgium, the figure was 37%.
Several factors have combined to spur this desire to start-up — among them the rockstarization of entrepreneurs such as Zuckerberg in Silicon Valley, and lower barriers to entry, such as the free flow of venture capital into tech businesses, which are enjoying sky-high valuations.
Stewart Thornhill, executive director of the Institute for Entrepreneurial Studies at Michigan Ross School of Business, says the idolization of start-up founders has combined with the decreased risks of launching a company to produce a “perform storm”.
“There’s been this real shift in what people want out of a career,” he says. “To be the guide of your own career is very empowering.”
These trends, which are mirrored in the wider business landscape, are forcing business schools to adapt.
Many are evolving into pioneers of innovative businesses models, and places where potential founders can find the technical and financial support they need to launch.
“There is change in the air in terms of the interests that students have,” says Lara Berkowitz, executive director of the Career Centre at London Business School. LBS has developed an incubator and a summer school for start-ups, alumni of which include WorldRemit, a fintech start-up valued at about $500 million.
Students in the incubator recruit other LBS students to join their ventures — “an ecosystem of entrepreneurs breading people that want to work in start-ups”, Lara calls it.
Evidence of this trend can be seen across the business school landscape. Any school worth its salt has an incubator — among them the accelerators at IE Business School, Cass, and Columbia — while as many as 600 of the 900 MBAs at Harvard this year spent their summer at start-ups.
“Students seek a dynamic, fast-paced and cutting-edge business experience, and entrepreneurial ventures clearly fit the bill,” says Ted Zoller, director for the Centre for Entrepreneurial Studies at UNC Kenan-Flagler Business School.
While the majority of MBAs still opt for corporate gigs, a growing number are keen to pioneer new business ventures from within, says Professor Justin Jansen at Rotterdam School of Management.
“Established firms need to respond to various changes which oftentimes are of a disruptive nature,” he says. “MBA students understand the importance of understanding new ways in which organizations may spur entrepreneurship within and across their boundaries.”
Business schools expect further shifts toward entrepreneurship. LBS’ Lara says: “There will be more students going into start-ups and launching start-ups, and the courses will be more relevant to students with entrepreneurial career backgrounds.”