By Vivek Wadhwa
A question that students and parents put to me most frequently is whether it is worthwhile to pursue an MBA as a ticket to success in the business world.
I tell them that a master of business administration from Harvard, Stanford or the University of California at Berkeley may be worth the high cost because of the brand, location and network value — but not those from most other business schools over the world.
The time and money could be better spent in starting a company that solves real-world problems. Students will gain better practical experiences and have a greater purpose than the investment bankers and consultants that business schools strive to graduate.
With the falling cost of a broad range of technologies, from computing to genomic sequencing to sensors and synthetic biology, entrepreneurs can now do what only big companies and governments have been able to do: Solve the problems of humanity.
They can design and build smartphone apps that act as medical assistants, digital tutors to teach almost any subject, and artificial-intelligence-based apps that improve public services and infrastructure.
They can even build electric vehicles, spaceships and revolutionary energy-storage technologies.
I encourage graduates to start or join world-changing companies and to be the masters of their own destiny. They will surely be earning a lot less than if they worked for the investment banks; and they will take huge risks, and their startups are likely to fail — as is the norm. And they will have to work extremely hard and endure endless runs of sleepless nights.
But they will develop real-life skills that no MBA could train them in; they will gain a far broader and more realistic understanding of the world; and they will have a far greater sense of accomplishment and position themselves for long-term success.
If they start the right company, they may well make the world a better place. And you never know: The startup could get really lucky and be worth a fortune.
It wasn’t always this way. When I completed my MBA from New York University’s Stern School of Business in the 1980s, I considered it to be the best investment I had ever made.
It helped me climb the corporate ladder and become an entrepreneur. As a tech CEO, I also readily paid a premium to hire business-school graduates. I also used to advise tech startups to strengthen their management teams by recruiting professional managers from MBA programs.
That was, however, at a time when there were few other options. The cost of starting a technology company is now less than that of a business degree, and the rewards are much greater.
The world has surely changed since then, but business-school curricula have largely stayed the same. As they say, academia moves at the speed of molasses. That is how it is supposed to be.
And, to be fair, I need to acknowledge that the topics that business schools teach do have real value.
Subjects such as management, marketing, law and accounting are still as important as they ever were.
The MBA that I completed as a programmer allowed me to become a project leader and then a vice president. I found that I could communicate effectively with user departments and my bosses; I could deliver projects on time; I knew how to manage and motivate employees; and I had the confidence to present business proposals to managing directors and board members.
When I became an entrepreneur, I had the knowledge to develop and manage budgets, market products and review legal contracts.
But that was decades ago, in an era in which large companies held the keys to economic growth and competitiveness; when major research labs produced almost all of the cutting-edge innovation.
Since then, the cost of developing world-changing technologies has fallen dramatically, and startups can out-innovate the big players.
Higher education certainly makes sense for some students. For students with technical backgrounds who want to pursue higher education and prepare themselves to solve complex engineering problems, I recommend master of engineering programs such as the one I teach at Carnegie Mellon’s School of Engineering.
These teach specialized skills in fields such as biomedical engineering and materials science. For students in less technical fields, there are also year-long master of engineering management programs such as those at Duke, Northwestern and the University of Southern California.
These teach management, marketing, law and accounting skills and skim over the intricacies of finance and investment banking. And they are half the price of an MBA. After all, the skills that matter aren’t how to conceive new types of financial products, but how to create technologies that actually do good for the world.
Students now have opportunities that their parents could never imagine. My message to them is always the same: Rather than wasting your lives working for a Morgan Stanley or Goldman Sachs use your intellect and energy to make the world a better place — you surely can.
About the Author: Vivek Wadhwa is a Distinguished Fellow, Carnegie Mellon University Engineering at Silicon Valley and Harvard Law School Labor and Worklife Program. His latest book is available here.)
(The article was first published here at Marketwatch.com.)