Interest in Social Entrepreneurship Rises Among MBAs, Creating Some Challenges for Business Schools
As interest in social entrepreneurship has swelled among MBA students in recent years, top business schools have responded by developing new programs, centers and scholarships for students pursuing a field that was relatively unheard of a few decades ago. But as the Financial Times reported in a recent article, the trend toward social entrepreneurship, as well as shifts in the structure of organizations social entrepreneurs seek to join upon graduation, presents a new set of challenges for top MBA programs.
“In the 1980s there was almost no talk at all in business schools about anything that we might now call social entrepreneurship,” Peter Tufano, dean of Saïd Business School at the University of Oxford, told the FT. “I think we’ve seen an explosive growth in demand for social entrepreneurship in the last 10 years,” he added.
In response, Saïd opened the Skoll Centre for Social Entrepreneurship 2004, which recently hosted it 10th World Forum on Social Entrepreneurship. Saïd students who demonstrate exceptional social entrepreneurial ability can apply for Skoll scholarships as part of a program created in 2005, and interest in these scholarships has tripled since that time, according to Skoll Centre Director Pamela Hartigan. Last year, 110 students of Said’s cohort of 247 applied for the scholarships, and early indications suggest this year will be as high if not higher, even as criteria for gaining the scholarships has become more stringent. “We have moved from candidates who had experience in development organizations to looking at those who have undertaken social entrepreneurial venture creation in a serious way,” Hartigan told the FT.
The Stanford Graduate School of Business has likewise seen interest in social entrepreneurship balloon, according to the FT report. In 2012, 97 MBA students graduated with a certificate in public management and social innovation (an add-on to the MBA), up from 37 in 1990.
At Saïd, Stanford and elsewhere, graduates focused on social entrepreneurship are moving away from nonprofit organizations and looking more to join for-profit organizations committed to delivering social good.
“More and more of our students are interested in setting up for-profit rather than non-profit social enterprises. This is definitely a trend,” Bernadette Clavier, Stanford GSB director of public management and social innovation programs, told the FT.
The converging trends of more students pursuing social entrepreneurship and more of those students leaning toward for-profit organizations within which to work has created some new challenges for business schools, the FT reports. In the United States, for example, many schools offer scholarships or loan forgiveness programs to students who enter non-profit organizations, but that assistance is not available to graduates who enter for-profit organizations focused on social impact, despite the low salaries they will most likely receive.
“We are looking to find ways to extend our loan forgiveness and fellowship programs to social enterprises,” Clavier told the FT. “The challenge is to identify a proper source of funding to support students who choose this for-profit route,” she added.
Business schools who encourage their students to pursue social entrepreneurship also stand to suffer in the annual rankings of MBA programs that so many watch so closely. “I do think that a business school that encourages social entrepreneurs is quite brave because MBA ranking tables do take into account the salaries of MBA graduates and typical salaries in social entrepreneurship tend to be lower,” Tim Jones, an associate fellow at Saïd and a newly appointed entrepreneur in residence at Judge Business School at the University of Cambridge, told the FT.
“Rankings tables are the bane of my existence,” concurred Saïd’s Hartigan. “How do we shift that idea about the importance of a high salary? If we’re really going to sustain ourselves in the next millennium we need sustainable models. Schools that emphasize social entrepreneurship should not be penalized,” she added.