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MBA programmes and their graduates are coming under fire from non-traditional businesses, venture capitalists and entrepreneurs.

The debate over the value of the MBA is not new. MBA programmes have drawn criticism over the years due to rapidly increasing costs, outdated teaching practices and lack of real-world experience to impart to their students. At the turn of the century business schools did a relatively poor job of preparing students for start-up ventures. In general, an MBA education was geared towards attaining positions in large, established companies rather than new entrepreneurial ventures. To complicate matters, graduates demanded higher and higher salaries to meet return on investment on their education – further putting start-ups at a disadvantage to attracting MBA talent. These students were not prepared or incentivised to excel in the innovation economy.

As the economy continues to sputter, the country again turns to the small business sector and their leaders to propel the economy out of recession. With agility hard-wired into their DNA, small businesses are best equipped to capitalise on technological changes, as well as economic, social and consumer-buying changes and ultimately serve as the engine to kick-start the markets back to pre-eminence.

However, business schools must also evolve to meet changing conditions, offering renewed and updated curricula better able to train the next generation of business leaders – or risk irrelevancy. Innovation and job creation comprise the new mantra and those business schools that focused elsewhere will see creative and motivated business leaders fleeing to non-traditional educational models. If small business leaders require innovation, then it is absolutely a requirement of academic institutions to nurture it.

Business schools must re-evaluate how they approach the learning process. Traditional business models and analytical thinking must be combined with the skills to generate ideas, validate market opportunities and develop a go-to-market strategy and execution. The learning process must shift from an individualised focus to that of collaboration. And this collaboration must move beyond the walls of the classroom. Students’ experience and value will be enhanced by the ability to work with a robust network of external advisers, coaches and the business community. These outside sources serve as fertile ground for the student to tap and evaluate ideas from companies, gain exposure to commercialisation opportunities at leading research institutes and generate ideas.

Gone are the days when individuals could single-handedly drive their businesses to success over the long term. Bill Gates could not have had the success that Microsoft has enjoyed without the likes of Steve Ballmer, a business-savvy entrepreneur who joined the team in its infancy to move the company through initial phases. The examples are endless, compelling and require business school backing and support to accelerate this growth in the innovation ecosystem.

A recent entrepreneur and alum remarked that the best thing about his MBA experience was the collaboration of classmates and the support he received from alumni, faculty and other entrepreneurs (successful and unsuccessful) coming together to help him move his venture to the next level. The time and resources made available to work an idea in a structured, relatively risk-free environment is priceless.

MBA programmes have a responsibility to create the next cadre of leaders who will generate ideas, launch companies, create jobs and enhance economic prosperity. And the trends indicate some progress. A 2011 survey by CarringtonCrisp of more than 450 prospective MBAs across the globe found that entrepreneurship is now among the top five most sought-after areas of course content. But there is more to be done.

New ideas are all around and the real business challenge lies in deciding which innovative ideas can be translated into viable, valuable market opportunities. Students must be armed with the skill set to generate and evaluate a business idea and determine if it is viable. Is it worth taking to market? Is it fundable? Is this idea big enough to drive a company?

The next generation MBA programme must centre on the skills and knowledge needed to empower the student to become an innovative, opportunity-driven, entrepreneurial leader for emerging and established companies. It must focus on teaching the student how to identify scalable ideas that fill a market need and add economic value.

The author is dean of the Rady School of Management, University of California, San Diego.

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