MBA education has traditionally been about generating a steady pool of competent managers who can deliver superior shareholder value. Should entrepreneurship & social inclusion be a part of B-school curriculum?
Take the term ‘MBA’ on one end and juxtapose it with ‘entrepreneurship’ and ‘social inclusion’. Traditional corporate world thinking will outrightly denounce the very idea and say that the terms on the left and right are mutually exclusive. Their standard grouse is that an MBA course either cannot inculcate these ‘competencies’ in an individual or is not even supposed to drill them in. Or both.
Nevertheless, that thought process is bound to undergo a change in the light of the glaring realities we face today, at least on the ‘not supposed to’ front. First of all, let us look at entrepreneurship. It is a foregone conclusion that the Indian economy desperately needs entrepreneurs, especially when it comes to addressing our daunting challenges on employment generation that really can undo much of our demographic dividend. According to a Mckinsey report this year titled “The world at work: Jobs, pay and skills for 3.5 billion people”, it is estimated that there would be around 58 million surplus low skilled workers by 2020 in India and other younger developing countries. The report highlights that this would mean millions of workers “trapped in subsistence agriculture or in urban poverty”. India could create just around 67 million non-farm jobs from year 2000 to 2010, while China created a whopping 121 million in the same period. Also, around 41% of these jobs in India were low-skilled construction jobs compared to 16% for China from 2000-2010. Around 340 million workers in India lack secondary schooling and over 90% of India’s work force is employed in the unorganised sector (National Statistical Commission report). Clearly, the ability of these two countries, which are expected to account for 60% of the addition in the global workforce by 2030, to create adequate employment opportunities will be key to sustained growth in coming decades.
Traditionally, MBA institutes have delivered largely in terms of addressing the acute managerial shortages that have accompanied post-liberalisation economic growth in India. The core focus of B-schools has been to provide domain expertise in marketing, HR, operations, et al; which equips students for executive roles in organisations. The orientation is strong towards emulating established processes and business models, as opposed to creating new ones. So on that premise itself, B-schools would hardly qualify as breeding grounds for entrepreneurs. So the debate on whether B-schools can create the job creators that India desperately needs is getting vociferous by the day. And more importantly, they have to bring out job creators who can deliver in the ‘not-so-encouraging’ Indian context. The World Bank’s ‘Doing Business 2013’ report ranks India at 173 in terms of ‘ease of starting a business’ (4 places down as compared to last year). The average number of procedures to start a business in India is 12 as compared to 5 in OECD nations and it takes 27 days on an average compared to 12 in OECD nations. Also, minimum paid-in capital is a massive 140.1% of income per capita in India compared to 13.3% in OECD economies.
The findings of the National Knowledge Commission report 2007 on entrepreneurship revealed that around 70% of the entrepreneurs interviewed did not have an MBA degree and only around 2% were PhDs. But the number of MBAs becoming entrepreneurs in India is also on the rise. The report highlights that “for entrepreneurial ventures, established since the beginning of this decade, the ratio of MBAs and postgraduate entrepreneurs has steadily increased, while the number of undergraduate entrepreneurs has decreased”. Also, in the pre-2000 era, MBA graduates who started business straight out of college formed the largest chunk of MBA entrepreneurs (38%), while the post-2000 era saw a huge majority (59%) of MBA entrepreneurs starting a business post an experience of 0-5 years.
Take the term ‘MBA’ on one end and juxtapose it with ‘entrepreneurship’ and ‘social inclusion’. Traditional corporate world thinking will outrightly denounce the very idea and say that the terms on the left and right are mutually exclusive. Their standard grouse is that an MBA course either cannot inculcate these ‘competencies’ in an individual or is not even supposed to drill them in. Or both.
Nevertheless, that thought process is bound to undergo a change in the light of the glaring realities we face today, at least on the ‘not supposed to’ front. First of all, let us look at entrepreneurship. It is a foregone conclusion that the Indian economy desperately needs entrepreneurs, especially when it comes to addressing our daunting challenges on employment generation that really can undo much of our demographic dividend. According to a Mckinsey report this year titled “The world at work: Jobs, pay and skills for 3.5 billion people”, it is estimated that there would be around 58 million surplus low skilled workers by 2020 in India and other younger developing countries. The report highlights that this would mean millions of workers “trapped in subsistence agriculture or in urban poverty”. India could create just around 67 million non-farm jobs from year 2000 to 2010, while China created a whopping 121 million in the same period. Also, around 41% of these jobs in India were low-skilled construction jobs compared to 16% for China from 2000-2010. Around 340 million workers in India lack secondary schooling and over 90% of India’s work force is employed in the unorganised sector (National Statistical Commission report). Clearly, the ability of these two countries, which are expected to account for 60% of the addition in the global workforce by 2030, to create adequate employment opportunities will be key to sustained growth in coming decades.
Traditionally, MBA institutes have delivered largely in terms of addressing the acute managerial shortages that have accompanied post-liberalisation economic growth in India. The core focus of B-schools has been to provide domain expertise in marketing, HR, operations, et al; which equips students for executive roles in organisations. The orientation is strong towards emulating established processes and business models, as opposed to creating new ones. So on that premise itself, B-schools would hardly qualify as breeding grounds for entrepreneurs. So the debate on whether B-schools can create the job creators that India desperately needs is getting vociferous by the day. And more importantly, they have to bring out job creators who can deliver in the ‘not-so-encouraging’ Indian context. The World Bank’s ‘Doing Business 2013’ report ranks India at 173 in terms of ‘ease of starting a business’ (4 places down as compared to last year). The average number of procedures to start a business in India is 12 as compared to 5 in OECD nations and it takes 27 days on an average compared to 12 in OECD nations. Also, minimum paid-in capital is a massive 140.1% of income per capita in India compared to 13.3% in OECD economies.
The findings of the National Knowledge Commission report 2007 on entrepreneurship revealed that around 70% of the entrepreneurs interviewed did not have an MBA degree and only around 2% were PhDs. But the number of MBAs becoming entrepreneurs in India is also on the rise. The report highlights that “for entrepreneurial ventures, established since the beginning of this decade, the ratio of MBAs and postgraduate entrepreneurs has steadily increased, while the number of undergraduate entrepreneurs has decreased”. Also, in the pre-2000 era, MBA graduates who started business straight out of college formed the largest chunk of MBA entrepreneurs (38%), while the post-2000 era saw a huge majority (59%) of MBA entrepreneurs starting a business post an experience of 0-5 years.
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