January 30, 2012 12:21 am

Moving targets

As the world enters an era of mega-cities, are business schools in the right locations?

How important is location to a business school? Does it matter if you are rooted in one particular city or country? It is a topic that is creeping on to the business school agenda because, as we know, demographics are changing dramatically.

There are now a mind-boggling 7bn people on the planet. What is more, that figure could double again by the end of the century, with the largest growth occurring in developing countries. Where will people live? What kind of lives will they have? How many will pursue higher education?

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IN MBA

The dean of the Indian School of Business gave me an alarming statistic recently. Only about 30 per cent of people in India live in urban areas, compared with 82 per cent in the US. India is expecting between 250m and 300m people – close to the population of the US – to migrate to cities in the next 20-25 years.

This means business schools face two issues. First, the growth in student numbers outside the traditional MBA markets of North America and Europe. Second, a rush towards urbanisation.

Some deans of top schools have given the latter much thought. Sally Blount, dean of the Kellogg School at Northwestern University, says globalisation will lead to the emergence of 25 global cities – intellectual, social, economic, educational and cultural capitals.

Where will they be? And will they be home to the world’s top MBA programmes, too?

A quick poll among Business Education colleagues (a rather unrepresentative sample of seven) showed tremendous disparity when colleagues were asked to nominate the 25 top cities of the future. Everyone agreed on London, Mumbai, New York and Shanghai.

Beijing, Hong Kong, Moscow, Paris, Rio de Janeiro and Washington also got multiple votes. What about San Francisco? Too small. Rome? Not enough industry. And then there is Germany, the industrial powerhouse of Europe, but with a federal system that mitigates against the surge of one great national city, such as London, Paris or Madrid.

Other cities that spring to mind are Tokyo – the world’s largest metropolitan area with a population of about 36m – Dubai, São Paulo, Chicago, Singapore, New Delhi and Los Angeles. Might Istanbul also have a shot?

If the 25 global cities are to be at the heart of business and educational life, then do they not also have to house the world’s top business schools?

Among the top 10 schools in the FT’s ranking of the top 100 MBAs, only one city is represented twice – Boston. With seven large universities in the greater Boston area, it is arguably the world’s most important city for education. But, 10 or 20 years from now, will it be one of the top 25 cities? And if not, does that matter?

I would argue that it does. Unlike history or philosophy departments, business schools must bridge the gap between business and academia, and the place to do that is on the doorsteps of global companies.

So how do London, Mumbai, New York and Shanghai fare? A glance at the ranking shows there is a smattering of business schools in London and New York. Each city is home to a top-10 school and has at least one other in the top 100. Indeed, if you include “greater, greater London”, as one German professor recently defined it to me, there are six business schools within an hour’s journey of central London, including Oxford and Cambridge, that make the top 100.

Mumbai has no business schools represented as yet and Shanghai just one – Ceibs. This may change rapidly. There is the much-quoted statistic that by 2020 there will be 20 cities of 20m people in China. The problem is, at the moment most people can only name two of them.

What is clear, is that many universities are in locations that will never become global conurbations. New Haven, Connecticut (home to Yale) will never make the cut. Nor will Lancaster in the UK, Lausanne (home to IMD) in Switzerland, or London, Ontario (home to the Ivey school).

So how can they flourish? Technology will play a part. Two of the US schools that recognised the value of this early on have been the North Carolina schools - Fuqua and Kenan-Flagler. And many schools have set up overseas campuses or partnerships with business schools in China and South America – India is still proving more difficult. But so far there has been little innovation by schools in the US and Europe to deal with changing demographics. If they do not innovate, will they survive as global institutions? It will be another 20 years before we find out.

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