As more MBA students launch their own companies, and many clamber to work internships at fledgling start-ups, entrepreneurial hotspots in London and San Francisco are luring business schools’ brightest.
From Silicon Valley to the UK capital’s Tech City, graduates are being tempted to cities that covet all things entrepreneurial. Last year, more than half of Stanford’s MBA graduates stayed in the Bay Area, most to work at — or launch — tech businesses.
“Within the MBA program the number of students choosing to become entrepreneurs has grown,” says Bethany Coates, assistant dean at Stanford Graduate School of Business, which sent 35% of its MBAs to tech this summer.
The proliferation of start-ups, energized by access to digital technology, is pushing MBAs to small firms where they can shape strategy.
“We have seen a significant jump in our graduates’ participation in start-ups,” says Katharine Boshkoff at Hult International Business School, who is based in the Bay Area.
And as the career destinations of future business leaders shift, the top business schools are attempting to embrace the start-up community.
“The Bay Area is a huge center of start-up activity and innovation,” says Kimberly MacPherson, associate director at UC Berkeley’s Haas School of Business. She says the business school supports MBAs through challenging them to develop and test their own ideas.
But it is not just Silicon Valley that is attracting business school graduates.
“Being in London is a huge boon for us, as we can get out into the ecosystem,” says Lara Berkowitz, executive director for the Career Centre at London Business School.
A stone’s throw away from Silicon Roundabout — the cluster of tech start-ups in east London — LBS is keen to engage with start-ups through networking events and careers fairs.
At the heart of the drive is the vast number of MBAs who are exploring their entrepreneurial ambition, rather than embarking on careers at corporations such as McKinsey, JPMorgan or KPMG.
“It’s not just about going into a big multinational corporation anymore,” Lara says. “Students are more agile and open minded about what constitutes a post business school career.”
Cities the world over are vying to be the next big entrepreneurial centre.
Simon Stockley, senior teaching faculty in entrepreneurship at Cambridge Judge Business School, says that “hubs” have formed to exploit locations’ unique benefits.
“People tend to stay, start business and then feed back into the ecosystem,” he says of Cambridge, whose host university has produced at least 14 companies valued at $1 billion.
But working in, or indeed launching, a small business brings its own potential problems, particularly around salary and access to financing.
The shift comes as business schools face growing threats to their survival on multiple fronts, not least dwindling MBA applications at many schools in the US.
Business schools say that by offering a market to entrepreneurs, they are able to adapt to trends mirrored in the business world. At Babson College in Massachusetts for example, specialist training, incubators, and entrepreneurially-minded students abound.
“Business schools are starting to do more of that,” says Donna Kelley, professor of entrepreneurship at Babson College.