MBA graduates opt out of becoming entrepreneurs.

Start-up activity among business school alumni at lowest level in 8 years.


Jonathan Moules and Laurent Ortmans

JANUARY 28, 2018 4

Entrepreneurial activity among the high flyers from the world’s top business schools has fallen to its lowest level in eight years, suggesting a peak in interest in start-ups among MBA graduates.

Some of the world’s most high-profile founders of recent years honed their ideas on MBA courses, such as

William Shu of London-based online food delivery service Deliveroo.

and

Frédéric Mazzella of French car-sharing service BlaBlaCar.

Up until this year, about a fifth of former MBA students surveyed for the FT’s annual global ranking of business schools had started a business within three years of graduating.

The proportion starting businesses in the FT student sample peaked at 22 per cent in 2015. But this year that figure fell to 16 per cent.

One explanation for the drop in MBA start-up activity is the sharp rise in salaries being offered to graduates by large, established companies seeking business school talent.

This, in turn, has followed a recovery in the jobs markets in the US and Europe.

Average salary growth across the FT sample of 100 schools has accelerated in the recent years. From 2015 to 2018, average remuneration has risen by just under 10 per cent to $146,000, significantly better than the 4 per cent pay increase achieved between 2008 and 2014, in the wake of the financial crisis.

Jeff Lynn, who co-founded Seedrs, an equity crowdfunding platform, while completing the one-year course at Oxford’s Said Business School said that rising salaries for MBA graduates would make it harder for current students to justify the necessary stresses of building a business.

“The opportunity cost factor is a big one,” he said. “It is so much easier to take the plunge if your classmates are finding it difficult to get high-paying jobs.”

  

Large companies have also made themselves more attractive to those with an entrepreneurial passion by offering them positions working on new business ideas.

“Organisations around the world are getting much better at trying to bake in an innovation and start-up culture,” said Mark Potter, associate dean of Babson College’s Olin Graduate School of Business. “This is a very attractive alternative for our students.”

The latest global MBA ranking is the 20th edition of the survey. Stanford GSB is back in the top spot for the time in six years, when it was replaced first by Harvard Business School, then Insead.

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