This article first appeared in Financial Times on 25 November 2014.
Business schools must overcome their ivory tower image and work closely with local business.
In the 1970s the Bolton report – for the then government into the small business sector – confidently predicted that Britain would become a nation of big firms and major employers. That view, for many years, was the status quo and society has organised itself accordingly.
Not least the UK’s business schools which, until recently, have acted as a production line for MBA graduates ready to join the battalions of a new empire for Britannia, namely corporate life.
Yet things have not worked out as many confidently believed and the certainty that underpinned those old assumptions has been eroded. Rather than a nation of Goliaths the UK has emerged as a home for legions of small business Davids.
This is a trend that has accelerated. The UK economy has experienced a start-up surge, having risen from the 14th to fourth most entrepreneurial nation in the world since 2012, according to the Global Entrepreneurship Index. Of Europe’s 25m small and medium-size businesses some 5m are based in Britain.
When I co-founded StartUp Britain [a campaign group to foster entrepreneurship in the UK] in 2011 the imperative was about encouraging people to have go at founding a firm. Now the challenge has evolved and the focus is on how ventures can accelerate their journey from start-up to scale-up.
That demands fresh skills, knowledge and methods. This is where the nation’s 130 business schools have a role, as catalysts for a business population increasingly focused on growth. They must reinvent themselves for relevance in an economy where change abounds.
The UK’s Small Business Charter is a welcome step in that direction. Established as a result of last year’s Growing Your Business report from Lord Young, enterprise adviser to the prime minister, it will forge fresh links between small companies and business schools from Southampton to Strathclyde. Already, the charter has seen more than 4,500 graduates working with small businesses and more than 800 student-led companies created.
The challenge for business schools is to overcome a pervasive image problem, namely that they stand as a relative ivory tower, seemingly inaccessible to the everyday entrepreneur and apart from the core university population.
A brilliant research scientist will not readily beat a path across town to the business school, to discuss how to commercialise an invention. There is opportunity here and it requires a swing-door approach, where the skills and expertise of the business school are much more readily available to high-potential entrepreneurs, from within the university and beyond.
The example to follow is California, where many students at Stanford University will study at the school specifically because they expect to spin out a world beating early-stage venture into Silicon Valley.
I would like to see UK business schools much more confident in the value they can bring to fast-growth companies. That means fresh levels of integration with both the local business population and specific university departments.
For the aspiring university entrepreneur that could provide an early opportunity to hard-wire an ability not only for invention but commercialisation. For the local business it means the opportunity of a learning and skills hub to access both knowledge and emerging student expertise.
The stakes for the UK could not be higher – a growth economy of the future or an industrial relic of the past. The S&P 500 estimates that 66 per cent of its membership in 10 years’ time as yet does not exist. That is a lot of new, world-beating firms to come and Britain is in a unique place to inspire their formation and to nurture their growth.
In turn, a third of new businesses will not survive to their third birthday and 90 per cent will not see out a decade of trading. Cutting-edge commercial knowledge could provide the survival kit for companies that face an everyday battle to keep their doors open.
The UK’s business schools could be the essential incubator, skills bank and inspirer of growth businesses. Indeed the best are already starting to fulfil this role, opening their doors to local entrepreneurial talent and galvanising the commercial spirit within their universities.
But the majority of business schools must still make the move from elite finishing schools for corporate executives to centres of intelligence, ideas and innovation for young companies.
The Small Business Charter is an important and practical move in the right direction. And it could create the environment for UK business schools to take an empowering role as a vibrant and vital knowledge providers to entrepreneurial Britain.
Photo Credit: University of Essex – New building to house Essex Business School