Tapping Into California’s Tech Hub: More Business Schools Putting Down Roots in Silicon Valley

As the demand for techies with MBAs increases, more and more business schools are setting up shop in Silicon Valley and San Francisco. But is the market becoming saturated?

When McMaster University’s DeGroote School of Business decided to design a new Executive MBA program, officials planned to deliver the program through four separate modules. The first three modules would take place on the school’s campus in Burlington, in Ontario, Canada.

But officials knew that the fourth module needed to be in Silicon Valley.

“When you think about advancement in terms of digital entrepreneurship, if you think about the companies that are at the forefront of leveraging big data, they tend to have a home or a hub in the Silicon Valley area,” says Michael Hartmann, the new program’s executive director. “There are lots of other emerging hubs, but in terms of the hub, in terms of public perception, it tends to be Silicon Valley.”

McMaster University’s program, which focuses on big data and analytics and is set to launch in April 2016, is just one of several EMBA and MBA programs that are forging ties with Silicon Valley. Just last month, Pepperdine University’s Graziadio School of Business and Management opened a new center in Silicon Valley where candidates can enroll in a 17-month Executive MBA program.

Business school administrators say that these Silicon Valley-based MBA programs help prepare graduates for a world that increasingly needs employees with both business and technological skills.

“What I hear from employers is that the bigger the company gets, the more there’s a need for an MBA,” says Lynn Santopietro, director of Babson College’s San Francisco campus, where the school launched its part-time Blended Learning MBA program four years ago.

“I think in the Valley there’s a certain point where a tech company gets to a certain size and there’s a need for MBA expertise.”

The country-wide statistics agree: a 2011 report from the McKinsey Global Institute found that the United States’ market needs 1.5 million more data-savvy business-minded managers to take advantage of big data.

DeGroote’s Hartmann says it’s essential for EMBA candidates, who are usually moving from a functional role into a managerial position, to understand how technological advancements should factor into business strategy, whether that’s through deciding which technology to invest in or anticipating potential cyber security issues.

“What we’re teaching in the program will be crucial to executives in the following years. In five years, we won’t even have to label [the program] as digital—these will just be normal necessary skills,” he says.

And Hartmann and other officials say the best place for students to develop those necessary skills is in Silicon Valley, the cradle of entrepreneurship and the headquarters of some of today’s most successful tech companies.

Santopietro says Babson’s decision to create ties with Silicon Valley was also strategic.

“For Babson in Boston/Wellesley, having a campus here provides access to Silicon Valley, to tech entrepreneurship, in a way we didn’t have without the campus,” she says.

And Tammy Fox, Director of Admissions for Graduate Business Programs at Santa Clara University Leavey School of Business, said the access to companies such as Apple, Google and Tesla, as well as the networking opportunities, makes Silicon Valley an ideal place to pursue a business degree.

Those networking opportunities often help students land jobs. Statistics from Stanford Graduate School of Business Recruiting Organization show that companies such as Apple and Google recruited and hired Stanford MBAs in the 2012 to 2013 hiring season.

Walter Armer, a September 2011 graduate of Babson’s Blended Learning MBA program and the president of the school’s San Francisco Alumni club, says all of his classmates were interested in technology and entrepreneurship.

“Because of the entrepreneurial slant, everyone had startups in mind, and there’s no better place to be than Silicon Valley for that,” Armer says.

Armer was an exception, pursuing real estate entrepreneurship instead, but he says attending school in Silicon Valley provided him with essential exposure and connections to launch his business.

Too many business schools in Silicon Valley?

But are there too many business schools in Silicon Valley? Has the market become saturated?

School officials say no—as long as Silicon Valley’s various business schools continue to cater to their specific niches.

“It becomes too saturated when you aren’t offering anything distinctive to your students,” Hartmann says.

Armer agrees, pointing out the differences between the schools: Stanford University offers a full-time MBA program, while Santa Clara - Leavey’s program is sequestered away from San Francisco.

“My sense is that there’s enough demand,” Armer says. “In part that’s because all of the programs are a little different. They’re tailored a little differently.” He added, “My options, wanting to be in the City or in the North Bay, were limited to three or four choices.”

But although some say the market is not saturated, Hartmann says that school officials considering putting down ties in Silicon Valley should be wary of missing out on something else. He says officials should steer away from placing too much emphasis on California at the expense of other emerging technological and entrepreneurial hubs around the world. Hartmann says after its first cycle, DeGroote will move its off-campus module to another location.

“We might look at doing a session in China. We might even do one in the mini Silicon Valley in our backyard [in Canada],” Hartmann says. “I think [focusing on Silicon Valley] is a problem if you do it at the expense of other critical emerging hubs around the world. If you position it so that going forward, Silicon Valley is going to be your landing space, you are going to be missing out on a lot of other crucial partnerships.” 


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