A quiet revolution is under way in business education, and it is coming from the students themselves. In response to the monumental changes taking place in society, the new generation of students entering business schools are rethinking business.
Motivated to make a positive impact on society, they want to understand how profits and purpose can be combined, and want to pursue a career with meaning. Yet, this holistic approach to problem-solving is often found lacking in business programmes, where learning is confined to lectures on traditional business theories and case studies.
A new approach
Taking a closer look at the values driving modern students, data show a significant break from past generations. A survey of 1,500 MBA students by Bain & Company found that 66 per cent of women and 59 per cent of men planned to put positive social impact ahead of financial gains. According to Net Impact’s 2014 Business As Unusual survey, 88 per cent of MBA students said social or environmental business was important to them.
Today’s students, growing up with internet access, are more aware of the interconnectedness between business, society and the environment. Solving a business problem cannot be done in isolation. Young leaders need greater understanding of where business, government and society intersect and where they can collaborate to provide multi-sector solutions to solve our modern complex problems.
Navigating this new integrated approach to business requires new mindsets and skills.
New market force
It’s not only university students who are rethinking business. Globally too, there is an emerging impact economy and a new market force, underpinned by companies, entrepreneurs and investors with an intention to generate social and environmental benefits alongside their profits.
The impact investment sector, in particular, is gaining momentum. Impact-minded investors are creating new corporate structures, metrics and platforms to align their investment portfolios with their values.
According to a 2016 report from the Forum for Sustainable and Responsible Investment (US SIF), one of every five professionally managed dollars in the US is now screened for social impact. According to the Global Impact Investing Network (GIIN), an industry group that tracks market trends, impact investing has grown from $15 billion two years ago to more than $77 billion in 2016.
This rapid growth in impact investment has created new demand for finance and business professionals with skills to assess both financial as well as social and environmental outcomes.
Social impact education
The top MBA programmes around the world have started responding by offering social impact education to meet these demands from students and the market. Such education is known by a variety of names: social entrepreneurship, social enterprise, and social innovation. It may include classroom-based teaching, using case studies of successful social entrepreneurs and models of social impact.
But it is often designed to be action and problem-based, helping students apply problem-solving skills or create their own social ventures. Ten years ago, only a handful of schools invested in social impact education. Today, almost half of the top 50 business schools in the world offer some kind of programme, and the majority offer elective options in this area.
The Indian angle
How can more Indian business schools apply their distinctive competencies and respond to the new demands? It starts by offering rigorous social impact education alongside the traditional pillars of business education. This will equip graduates with the mindset and tools to serve both the companies and the greater society.
Business schools that offer social impact education will not only meet market and student demands, but can also create multiplier effects of positive impact in their communities. By supporting student-led social ventures on campus, students can learn while helping address social challenges faced in the local communities surrounding their universities.
The potential
Leading universities have taken this a step further, establishing social impact centres to organise social innovation and entrepreneurship initiatives. Oxford University’s Saïd Business School houses the Skoll Centre for Social Entrepreneurship, for instance, and the social impact centre at University of Chicago’s Booth School of Business, now called the Rustandy Center for Social Sector Innovation, received a $20-million endowment this year. Similar university-based social impact centres in India could unleash the next frontier of social innovation.
The potential in India is immense. With an expanding market and an increasing number of students seeking this knowledge, the combination of impact and business can be an economic force for inclusive growth. Business schools in India have a great opportunity before them.
The country’s 5,500 management institutes represent a massive potential to develop local solutions and global connections. Social impact education can transform the face of business education in India and ready management graduates for tomorrow’s greatest challenges.