Technology has overtaken finance to become the top employer of MBA graduates. The Graduate Management Admission Council’s latest corporate recruiter survey found that 89 percent of tech companies planned to hire MBAs this year, compared with 76 percent of finance and accounting firms.
Investment banks have also lost some of their luster at business school since the 2008 financial crisis, while Big Tech companies like Amazon, Google and Microsoft have grown in appeal. Amazon hires the most MBA graduates from a throng of top courses – it vacuumed up 1,000 overall in 2017.
This ravenous appetite for MBAs has prompted several business schools to establish entire MBA degrees focused on the technology sector. IE Business School in Spain is the latest. It established a Tech MBA in September that starts in 2020.
Many schools run tech modules in their general MBAs, but Jose Esteves, vice dean of IE, says the program provides a deeper dive into subjects, such as data management and artificial intelligence, as well as the nuts and bolts of business management.
The value in taking a Tech MBA, he says, is being prepared for a vastly different culture than in other industries. Tech companies are less hierarchical, more collaborative, innovative and take risks. This culture was summarized by Mark Zuckerberg, who made Facebook’s motto “move fast and break things”, though this was changed.
Combining Management and Technology
IE’s Tech MBA will set students up for such cultures through immersive, practical learning experiences and internships at tech companies, says Esteves. “Recruiters tell us they want MBAs to be more focused on technology and tech cultures.”
In the US, there are 200,000 jobs created per year in tech-related roles, such as digital marketing or financial engineering, says Esteves. But there’s a shortage of people who understand technology and also have the management skills to lead tech projects, he says. These candidates would be suitable for product management roles, which combine marketing, design and problem-solving, and are popular among MBA graduates.
“We need technology managers. We see a gap in business education,” says Esteves, adding that candidates for his course must have a degree in STEM subjects – science, technology, engineering or math.
IE believes the Tech MBA is the first in Europe. Most are in the US, which Esteves says reflects the size of the technology industry there, with five of the top US companies by market capitalization from the sector. “In Europe our tech sector is relatively small with relatively few big global companies like SAP,” says Esteves.
Beyond ‘Big Tech’
New York University’s Stern School of Business launched its Tech MBA to fill an industry need. It also wanted to leverage its location in the Big Apple, where there is a thriving tech sector. The course was developed in partnership with executives from Amazon, PayPal, IBM and Infosys. They also sit on the course’s advisory board.
Holly Curtis, director of MBA admissions at Stern, says: “We see a clear demand for the program. Prospective students are excited about refining their skills and strategic thinking in both business and tech. We welcomed our second class to campus in May. We’re proud the cohort is 50 percent female.”
Students work on real business projects in New York City and also travel to Silicon Valley, where they meet alumni and corporate recruiters. That helps them build a network and land jobs. This year, 93 percent accepted a job offer or started a business within three months of graduating.
They were hired by Amazon, Google, IBM and Microsoft, but also by the healthcare, finance, entertainment and transportation industries.
This marks a shift in tech companies’ thinking. Some are skeptical of business schools, claiming they make students risk-averse, which does not fit Silicon Valley’s mantra of “fail fast, fail often”. PayPal’s co-founder Peter Theil once said: “Never hire an MBA, they will ruin your company.”
But Andrea Masini, associate dean at HEC Paris, points out that Tech MBAs set people up for a wide range of careers, even in companies that are not traditionally considered to be tech businesses.
“Many industries are being transformed by technology,” he says. “No good leader can drive transformation and create value without a very good understanding of how technology works and what challenges and opportunities it entails.”
Because of this, HEC exposes its MBA students to technology in many ways. There are, for example, dedicated specializations focused on blockchain, business analytics and data management. Courses are also offered in design thinking and the management of innovation.
Masini believes this is sufficient to prepare students for tech-related roles, and adds: “The proliferation of Tech MBAs may be a quick fix to the presumed decline in applications to generalist MBAs.”
ESMT Berlin goes further, with MBA students required to take courses, such as data analytics. There are also consultancy projects that focus on technology. In one, students work with an autonomous driving startup on the development of a smart city.
ESMT Berlin has a strong reputation for technology and innovation, while the German capital is a tech startup hotspot. “If that is not the case for other schools, it might be difficult to make such a drastic change from traditional business education,” says Rick Doyle, head of marketing for degree programs. But with technology changing virtually every industry, all business schools will need to adapt.