Adapt & grow: How India's unicorn boom will impact B-school education

If, like me, you are still getting your head around the fact that we are in 2022, then welcome to the club. For too many of us, 2021 felt like a year that we never really got to know, caught as we were between the yes/no of lockdown rules.  But in retrospect, it has achieved an impressive amount of work, something that will become more obvious in the years ahead. Especially for management education in the country.

From a B-School perspective, the biggest number has to be 42. Yes, that was the number of Unicorns minted in India in 2021. Keep in mind that India had a grand total of 38 startup Unicorns till the end of 2020.  That 42 number is  practically ‘out of syllabus’, in terms of its size, and its long term impact on management education. These unicorns have not just attracted close to $14 billion dollars in funding, but also created tens of thousands of white collar jobs and counting, where an MBA may or may not really matter anymore.  Simply because the non-MBA founder is not sold on the degree.

 

 So without getting into the why’s of the new rate of unicorn making, what is the impact this will have on B-School education? And what will happen if the hopes of 75 more unicorns in 2022 actually come true?

First Up, The Basics

No one will dispute that management education in India has made efforts to attract and train would be entrepreneurs. Even as that was never really the mandate till a decade or more back. But having said that, it is also a fact that events on the ground have overtaken those tentative steps much faster than ever. Consider how the majority of the founders in the unicorn class of ’21 and the many in the pipeline have not really come from a professional management background. Instead, what we regularly have today are domain specialists. Where they do have an MBA badge, they have tended to be from universities abroad. That points to a deficiency in terms of both training and exposure for domestic B Schools. Measured disproportionately on their placement success, top B Schools in the country have turned too conservative, when it comes to their syllabus and exposing their students to newer opportunities outside the comfortable cocoon of BFSI, FMCG and IT. Opportunities in businesses like marketplace models, logistics and even D2C brands have been ignored. This, even as sectors like Aviation and  Hospitality have already created their own independent modules to train and hire managers. For B-Schools, adapting to this new reality of specialist founders and the kind of people they seek for their fast growing firms requires a huge pivot to a higher industry interface, and a more flexible syllabus. Not to forget, newer case studies.  

Next, The Numbers

Right up there for B-schools is a thinning of the herd. Between 2016 and 2021, the number of applicants for the CAT (Common Admission Test) have virtually stagnated at around 1.90 lakh. At the same time, consultancy Redseer estimates that the number of students going abroad (for all education) has moved from 440,000 in 2016 to 770,000 in 2019, till Covid impacted the process in 2020. However, the firm still expects the number to hit 1.8 million by 2024. Put off by the tough competition here and the wider choice and acceptance for degrees abroad, these numbers will definitely impact the quality of the entrants at our top institutes. And even more so at ‘respected’ tier 2 institutes.  This writer has personally been invited to interview sessions where the focus was on attracting the right ‘profile’ (read- bright and capable) of candidate to join, rather than the elimination process that was the norm till a few years back. The pressure will continue to ramp up because as B Schools have become more ‘market-linked’ in their fees, so the aspiring MBA, is also evaluating her return on investment more closely than ever. The unicorn boom has also opened up a ready market for engineers and other quality graduates from top universities here, who can choose to defer their MBA plans and work first, at a good salary. These are the ‘potential’ students who, even when they do decide to go for an MBA, will follow a very different decision process, frequently looking beyond the regular B School world.

The Money Heist

While on student numbers, it is well worth pointing out that there are at least three large unicorns that have a significant to a dedicated presence in the executive education space. At least two, Eruditus and Upgrad compete directly with B Schools to attract and teach students, with Eruditus even claiming to have a majority of its students from markets beyond India. For Covid impacted B schools in the past 20 months, the comparison with these platforms has suddenly become like for like with online coaching, and it is an area where the startups regularly look better, designed as they were for online training.  The success of these startups, even as some of them even run courses in association with B Schools, hits the B School where it hurts, in the high margin executive  education business, and increasingly, in the core full time business too, as students go for the foreign university tag over a domestic tier 2 tag for the same cost. Earnings from Executive education are a key tool to attract and retain talent for B Schools too, and the pressure on finances will be felt sooner than later.

The Implication for Students

Despite all the Covid disruptions, and the forced shift to online teaching, so far, it does look like placements haven’t taken the kind of hit that many had feared at the beginning of the lockdowns. While some of this is definitely due to the very Unicorns disrupting everything, for students, it is a fact that the old adage, form is temporary, class is permanent is working in their favour, for now. B Schools with a strong alumni network and a well nurtured reputation have continued to deliver, as far as placements go. But it is instructive that one of the earliest investments students are making on their own is in Crypto’s, something that is part of no syllabus as far as  any b School is concerned.

Students today need to understand that entrepreneurship, may or may not be everyone’s cup of tea, but intrapreneurship, or the ability to think and work like an entrepreneur, is frequently the one quality that can give wings to your career. So look at the brand definitely, but given a choice, it might be time to take a look at the institute’s track record with entrepreneur alumni, and how it celebrates them.

The author is an MBA from the capital's Faculty of Management Studies, and a late blooming entrepreneur for the past 5 years in the renewable energy and sustainability space.