Without question, public and private organisations have entered an era of socio-economic globalisation. In such a global market, competitive and innovative changes are necessities to survival. the one stop solution for nations is to ensure the growth of entrepreneurship. Are B-Schools listening?
If truth be told on how globalised the Indian economy currently is – almost twenty years post liberalization – one would feel close to being ashamed. The Carnegie Endowment and A. T. Kearney study, The Globalization Index, ranks various countries of the world on a multitude of parameters, finally providing the consolidated Globalization Index (GI) ranking. In the last report that came out around two years back, India is ranked second from last. Algeria, Sri Lanka, Thailand, Tanzania, Bangladesh, Pakistan, Kenya, Colombia, Peru, Nigeria, Senegal, Vietnam, Morocco, Ukraine, Botswana, Tunisia, Croatia, Panama, Uganda, Chile and others are easily ranked ahead of India. India has had more or less the same rank in the previous years. So where is the mistake India is committing?
In one of our editorial researches, we found out that there was a direct correlation of this with the huge failure in India to encourage entrepreneurship. True, there have been radical leaders like Ratan Tata, Azim Premji, Narayana Murthy and some more. But then, these have only been a handful. And the blame for this failure falls to a large extent on the plethora of Indian B-schools that have existed in India teaching “management education,” yet failing to teach entrepreneurial education. The Columbia GSB report, Role For Entrepreneurship in India, shows that Indian entrepreneurs actually might be “hindering economic development,” while the US entrepreneurship system “has been quite successful” for their economic growth. The report says that entrepreneurs might be playing a “possibly negative” role in India even in Bangalore.
A shocking report of Duke University, America’s New Immigrant Entrepreneurs, proves how wasteful Indian education has been – as Indians prefer starting companies in America than in India. The report shows that Indian immigrants, over the past 8 years in the US, have filed the “second highest” number of patent applications (more than 10,200), have started the highest number of manufacturing and innovation-related service companies (24%), the highest number of bioscience firms (10%), the highest number of software firms (34%) and much more. Compare that to India, where contribution of small and medium enterprises to the GDP is a pathetic 5%.
Evidently, there’s something critically lacking in India’s B-school education, where a majority of students are more focussed on getting jobs than on starting new companies within India. A concrete study held in 2002 at the University of Arizona found that five years after pursuing MBA, the average income of entrepreneurship majors was almost $72,000 higher than students who majored in other subject or were just standard MBAs. Not just this, entrepreneurship graduates were more likely to form new companies which had annual sales of $50 million and employed close to 200 employees.
But then, why don’t Indian B-schools teach entrepreneurship as a separate specialization, course or even as a term subject, given the fact that the more entrepreneurs a country has, the more the employability of masses increases, and the more equitable the income growth becomes (vis a vis the Gini Index)? Can MBA education not play a greater role in providing formal entrepreneurship education in India?
Anuj Guglani, founding CEO of Ace Associates (who has worked for auto majors like Honda and GM after the completion of his MBA course from IIT Delhi), says, “MBA education, particularly entrepreneurship as a subject, is very important for starting or handling a business today. It cultivates a vision and completely changes the way your thought-process operates.” Pramit Samal (an alumnus of IIPM’s programme in Planning and Entrepreneurship), who is the founder Director, Glocal Trading (P) Ltd, comments, “Wide-ranging areas that form an entrepreneurship programme could help individuals beat the odds & grow their business which in turn drives the economy. Being an aspiring entrepreneur myself and having interacted with many more like me, I can confidently say that the subject matters a lot when it comes to the real life.” Paresh Rajde, Founder MD & CEO, Suvidhaa Infoserve provides a deeper analysis, “Entrepreneurship is not just about teaching business and management skills. It involves teaching techniques and approaches for identifying, creating, and evaluating opportunities...”
In fact, Indian B-schools should take a lesson from their global counterparts. Babson College, a B-school based in Massachusetts, has been ranked the best amongst all global B-schools focused on entrepreneurial programmes. The college has been ranked by the Entrepreneur magazine and The Princeton Review as being the best for both its graduate and undergraduate programmes. Their secret? All students majoring in entrepreneurship undergo a trial by fire. Divided into 30 teams, the students are required to launch, run and dissolve a business – all within nine months. Does any Indian B-school have the wherewithal to undertake such an exercise? They possibly cannot, and more because of funding issues. The government has no structured B-school entrepreneurship projects funding mechanism. That leaves B-schools with the option of getting private equity funding for student projects. In one line, India dismally lacks such entrepreneurial funding.
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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