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The ACM Computer Programming Competition: Lessons for America and from IBM

Sunday, August 28th, 2011

My previous blog, The United States’ Clogged Technology Education-to-Employment Pipeline, provided a number of examples of how U.S. students, from K-12, to college to grad schools), are falling behind their counterparts in other countries across virtually all segments of STEM education. Although these deficiencies are troubling in their own right, they only begin to suggest a much bigger, much more troubling problem for the U.S. economy.

The educational system is, after all, the primary pipeline through which corporations receive the steady flow of talent they need to keep America competitive in a global economy. And since this competitiveness will be based on innovation, this talent must be fluent in the language of innovation. STEM is that language.

Although I have spoken with many people and have read and written much on the challenges facing U.S. STEM education, I never really had a chance to see the manifestation of these challenges for myself. Therefore, I was happy to travel to Orlando Florida to learn about and see the world finals round of the Association of Computing Machinery (ACM) International Collegiate Programming Contest (ICPC).

This blog briefly describes the contest and its outcome, and provides my view of the implications for the U.S. Its primary focus, however, is on corporate support of these competitions and on their role in supporting the recruitment activities of their sponsors—in this case, IBM:

  • Why, for example, has IBM sponsored and funded this competition for the last 15 years, and why it has committed to continuing to do so for at least the next 5 years;
  • What value does IBM get from this generosity and what is it doing to maximize the value it derives from it; and
  • What are the implications and opportunities for other tech vendors that hope to promote STEM education and improve their own chances of recruiting the most promising graduates?

The ACM International Collegiate Programming Contest

The contest is a multi-stage competition that started with more than 300,000 students. It begins with dozens of local competitions, and progresses through six geographically-aligned regional competitions (this year, with 24,915 contestants from 2,070 universities and 88 countries). It culminates in a final competition that, this year, consisted of 315 students on 105 teams.

These teams compete not only with each other, but also against tight time constraints and limited resources (one computer and three calculators per team) in an attempt to solve eleven real-world problems. They must often deal with ambiguity, exercise judgment to assess when to submit an answer (to avoid penalties for incorrect submissions) and continually reassess their strategies to determine on which problems to focus their energies. Success, therefore, depends not only on speed and accuracy, but also on teamwork, resource prioritization and allocation, quick thinking, and adaptability.

The questions are designed with varying levels of difficulty, from a couple that require relatively moderate skills to a couple that would challenge many of the best, most experienced programmers in the world. In the end, after five hours of intense work, ten teams answered seven questions correctly, and two teams managed to answer eight, an impressive feat for college students, especially under the constraints imposed by the rules.

As has been the case in most years since the competition went international, this year’s winner’s circle was led by teams from Russia (four of the top ten teams) and China (two of the top ten, including 1st place Zhejiang University and 3rd place Tsinghua University). In fact, combined, these two countries represented half of the top 26 teams (7 for China and 6 for Russia), with two other perennially strong countries, Poland and the U.S., taking two spots apiece and another, Ukraine, capturing three.

U.S. schools, who typically make quite respectable showings, qualified 18 teams for the finals. One, North American regional champion University of Michigan Ann Arbor, took 2nd place in the world finals and three others (Carnegie-Mellon took 13th, MIT 32nd and Princeton 48th) in the top 58 (all of whom had at least 4 correct answers). The remaining 14, each correctly answering fewer than four questions, received Honorable Mentions.

As would be expected, men overwhelmingly dominated the competition, with women accounting for fewer than 10 of the 315 contestants. This year, however, a woman was part of the Zhejiang University championship team. (As I discussed in my previous blog, U.S. women, while expanding their inroads in science and especially medicine, are poorly represented in math, engineering and IT.)

Challenges for the U.S.

Although one must not try to read too much into the results of one competition, Russian and Chinese (and more broadly, Eastern European and East Asian) schools are traditionally among the winners. U.S. teams, meanwhile, typically do make quite respectable showings. Approximately 20 U.S. schools typically make it to the finals, and in eight of the last 15 years at least two U.S. universities have won medals (i.e., placed among the top 12). In fact, at least three U.S. teams medaled in four of the last 15 years, with one winning the championship and five placing second.

Respectable: yes. But as the results of this competition (not to speak of the educational statistics cited in my July 31 blog) make clear, companies that need access to the best talent must look well beyond U.S. citizens and U.S. schools. After all, non-U.S. universities, as is clear from the competition, already contain much of the world’s best programming talent. (Meanwhile, some of U.S. teams, including the Number 2 University of Michigan team, included students from other countries.) These non-U.S. students and schools promise to become even more competitive as Asian schools, in particular, continue to improve, attract more world-class professors and become more attractive destinations for the world’s most promising students.

Meanwhile, as discussed in my July 31 blog, U.S. students (with the notable exception of Asian-Americans) are moving away from STEM disciplines and U.S. universities now count on non-U.S. citizens for rapidly growing percentages of their undergraduate science and engineering classes–259,000 new undergraduate students in 2009/10 alone (not to speak of an absolute majority of their PhD candidates).

That creates a problem: The U.S. is producing fewer of its own world-class programmers and IT engineers. Meanwhile, U.S. companies are finding it increasingly difficult to bring world-class talent from other countries into the U.S. Where then will these companies find the talent they need to grow?

This brings us full-circle back to the ACM competitions, and specifically to IBM, which sponsors the competitions.

Opportunities for IBM

IBM has been sponsoring the ACM competition for the last 15 years and has just committed to extending this sponsorship for at least the next five years. Why does it devote so much money and so many of its people to this work? It hopes to:

  1. Recognize and spotlight STEM skills;
  2. Inspire more students to study and develop their problem-solving skills in these fields;
  3. Encourage and facilitate cross-cultural exchange among schools and students; and
  4. Identify some of the best STEM talent in the world, expose them to IBM and the types of problems they would work on at IBM and improve IBM’s ability to recruit these people.

IBM, as exemplified by its rapidly expanded focus on donating money, products and expertise to educational institutions, and as demonstrated by programs such as its Academic Initiative and its newly announced P-Tech high school partnership with New York City, is deeply committed to encouraging students and helping all levels of schools to improve STEM education.

But for all of its philanthropic efforts, IBM is also intent on reaping its fair share of the rewards from such efforts. It wants the best and brightest of these graduates to join IBM. This is more of a challenge than it may appear. True, IBM is clearly one of the leading and most diversified IT companies in the world. It is also consistently rated as one of the world’s top brands and one of the best companies for which to work. Still, it is generally less visible to students than are more consumer-facing brands, such as Microsoft and Google and does not offer the type of pre-IPO lure of companies such as Facebook and Twitter.

The ACM competition provides IBM with a unique opportunity to meet and to present itself to many of the most promising college-age programmers in the world. It is, therefore, no surprise that IBM leverages the competition to introduce itself to these students. It provides demonstrations of some of the company’s cutting-edge technologies and research, and populates the conference with a number of IBM employees who are alumni of the ACM competition and of some of the schools represented in the contest.

It has also set up a separate recruiting process, separate from but coordinated with the company’s primary recruiting efforts, to learn what interested contestants are looking for in their careers and to help identify how they can accomplish their goals at IBM. This year, the company went a big step beyond recruiting. In addition to monetary rewards (of up to $12,000 per team) from ACM, IBM, this year, made open job offers to the top 12 placing students—three members from each of the Top Four teams in the competition. The company will offer them jobs or internships in whichever IBM group (IBM Research, Software Group, etc.) and whichever country (subject to IBM operations in and government permissions) they choose.

IBM’s partnership with ACM provides yet another example of how a company can do well by doing good.

Posted in Corporate Social Responsibility, IBM, IT Industry Role in Education, STEM Careers | No Responses »
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The Future of Community Colleges

Thursday, August 25th, 2011

Online College Courses has just released its list of Ten Predictions for the Future of Community Colleges.

Although the list certainly does discuss (correctly) the importance of online education, it goes far beyond the group’s primary focus to emphasize a number of other critical changes that, as we had discussed in our 2010 series on the future of community colleges.

The list includes, but is not limited to the:

  • The growing need for community colleges as an alternative to the exploding cost of attaining four-year degrees;
  • Changes that will be required to meet the needs of rapidly growing numbers of non-traditional students;
  • Increased coordination with local businesses;
  • Growing focus on identifying and preparing students for high-demand jobs, regardless of whether or not these jobs require degrees;

The list is well worth checking out.

Posted in Community/Other Colleges, Education System and Institutions | No Responses »
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The United States’ Clogged Technology Education-to-Employment Pipeline

Sunday, July 31st, 2011

We are being continually bombarded with news of the failures of the U.S. educational system. Although concerns span virtually all subjects, they are particularly severe in science, technology, engineering and math (STEM)—the language of technological innovation and the foundation of most of the country’s competitiveness in global markets.

The problems, particularly for U.S.-born students (with the sole exception of Asian-American males), seem to compound at every step of the educational ladder and are now beginning to profoundly affect the workplace

Primary and Secondary Education Shortfalls

These shortfalls begin in our elementary and high schools. Consider, for example, that:

  • The 2009 National Assessment of Educational Progress exam found that fewer than one-third of elementary and high school students have a solid grasp of science. Worse still, students are falling further behind each year of study, with only 34% of 4th-graders, 30% of 8th-graders and 21% of 12th-graders being proficient or advanced;
  • The OECD’s 2009 Program for International Student Assessment (PISA) found U.S. 15-year-olds near the mean for test scores and below the median ranking for each of the three tested areas, ranking 16th of 30 in reading, 21st in science and 29th in math;
  • The New York State Education Department found that only 37% of all students who entered high school in 2006 graduated with math and English scores high enough to qualify them for college. The figure was worse in most cities, where 21% of New York City, 14.5% of Yonkers and 6% of Rochester students would qualify.

These primary and secondary education system shortfalls in science and math education flow inevitably upward, through all levels of college and university education. And this was all before the current slashing of public education budgets, teaching staffs, school hours and classes—cuts that span all levels of the education spectrum, from K-12, to community colleges, state colleges and even Tier-One public research institutions, like the University of California at Berkeley.

College STEM Challenges

Although the percentage of high-school freshman who actually graduate from high school is falling, there are indeed some positive trends among those who do graduate. First, the percentage of high-school graduates who go directly to college is steadily increasing (from 57% in 2000 to 63% in 2008). Even better, the percentage of incoming college freshman who plan to major in STEM-related fields has recovered from a decline in the 1980s and ‘90s, to approach Cold War levels, reaching 31% in 2004 and 34% in 2009. Amazingly, these percentages are almost identical among Whites, Asian-Americans, Blacks, Latinos and Native Americans. In fact, the only major demographic group that is underrepresented in the “quantitative sciences” is women.

This is where the bad news begins. Among those freshman who initially aspire to a STEM degree, fewer than one-third actually graduate with these degrees within five years. Most of these entrants either drop out of school, change majors to less demanding disciplines, or take longer to graduate.

These are multiple reasons for this fall off. Many who did well in high-school classes (especially those who were not enrolled in AP classes) find themselves ill-prepared for the rigors of a STEM education. Many have to take remedial courses before ever getting to degree programs. Fewer still are prepared for the demanding workloads or are willing to accept the lower grades these courses typically produce. As we have seen in study after study, the U.S. educational system—from elementary schools through universities—is migrating to fewer classroom hours, less homework and easier grading. College students, in particular, increasingly view college at least as much of a social opportunity, as an educational opportunity.

It is in this period, between entering college and graduation, that demographic differences become pronounced. Although similar percentages of all racial groups initially aspire to a STEM degree, the differences in the percentages from each group that actually earn these degrees in five years are huge:

  • 42% for Asian-Americans;
  • 33% for Whites;
  • 22% for Latinos; and
  • 18% for African Americans.

Meanwhile, women, who now account for 58% of all U.S. college students, and an even larger percentage of honors degrees, are increasingly opting out of quantitative disciplines. True, they do (at least as of 2006) account for a majority of bachelor’s degrees in sciences including psychology (78%), agriculture (51%), biology (62%) and chemistry (52%) and are well-represented in some emergent engineering disciplines, such as environmental and biomedical. They, however, represent only small—and declining—minorities of quantitative degrees. As of 2006, for example, women earned only 20% of engineering, 21% of physics and 22% of computer science degrees. Their participation in computer science, in particular, plummeted from 37% to 22% over two decades (1985 to 2005).

And this does not even begin to assess the many problems that are plaguing the nation’s community college system—a system that is required to provide the skilled labor required to assist engineers and to produce and service innovative products. (See my series of blogs, beginning with The Community College Contribution.)

U.S. Graduate Schools as Magnets for Foreign-Born STEM Aspirants

These trends are further magnified in graduate STEM programs—but with another, big, new wrinkle.

U.S.-born racial/ethnic minorities and women have long accounted for small minorities of U.S. STEM graduate classes. Although U.S.-born minority students are gaining some ground (from 29% in 2000 to 34% in 2007), most races continue to be greatly under-represented as a percentage of all graduate students. For example, as of 2007, only 8% of all African American, 12% of Native American and 13% of Latino graduate students are enrolled in engineering, physical sciences, and biological sciences programs.

Whites are also increasingly under-represented in these programs, accounting for only 16% of total U.S.-born White graduate program enrollees. The big gainers, not surprisingly, are Asian Americans, with 29% of all of those enrolled in U.S. graduate programs studying in engineering, physical sciences, or biology.

Although women are also gaining some ground in quantitative graduate programs, their numbers and percentages remain small, accounting for fewer than 10% of all U.S. PhDs in electrical, mechanical and aeronautical engineering. (They do, however, represent more than 25% of chemical and industrial engineering doctorates and more than half of all social science and biology PhDs.)

Although U.S. born Asian-American males are rapidly ascending the STEM educational ladder, even they are being overwhelmed by Asian-born, naturalized U.S. citizens and especially by Asian citizens who chose to study in the U.S. In fact, while 90-95% of all STEM bachelor’s degrees are now awarded to U.S.-born students, 55% of all STEM PhDs now go to foreign-born students.

Although some of these foreign-born candidates are naturalized U.S. citizens, the number of foreign citizens studying in U.S. STEM graduate schools has exploded. The number of STEM doctorates awarded to temporary visa holders, for example, grew by 50% (compared with 18% in those to U.S. citizens and permanent visa holders) between 2003 and 2008 and now account for 38% of total degrees.

Even these totals, however, are dwarfed by numbers in specific fields. Visa holders, for example, now account for 45% of all physical science doctorates and 57% of all engineering doctorates awarded by U.S. universities. (A 2010 Congressional Research Service study suggests that even some of these percentages may be too low. By the time one combines those in the U.S. on permanent, as well as temporary visas, 67% of all engineering PhDs are granted to non-U.S. citizens.

Where Do We Go From Here?

This all sounds very ominous. It appears, from the numbers, that the U.S. is rapidly losing its ability to produce its own technical talent and that we will be forced to rely on “imports” for the scientists and engineers that will be required to rejuvenate our economy and compete in an increasingly technology-driven, global economy.

But is the situation really this bleak? What is the current state and the future of the U.S. technology workforce? What can U.S.-based technology companies do to address the nation’s and their own talent requirements? What role can non-U.S.-based companies play in addressing our talent shortages? Can the U.S. government help, or should it just get out of the way.

I will address these and a number of related issues in my next several blogs.

Posted in 21st Century Careers, STEM Careers, Workforce Trends | No Responses »
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The Governmental Mandate of Shared Value Creation

Sunday, March 6th, 2011

My February 6 blog (Shared Value Creation: The Next Evolution of Corporate Social Responsibility and of Capitalism) explained the many benefits that corporations can achieve through a new, more business-aligned approach to corporate philanthropy. This approach, which is called Shared Value Creation, consists of “policies and practices that enhance the competitiveness of a company while simultaneously advancing the social and economic conditions of the communities in which it operates,” It is a concept, which as Harvard Business School professor Michael Porter explains, is becoming more than a corporate opportunity—it is practically becoming a corporate mandate: a form of “self-interested behavior” that creates economic value for the company, by the very process of creating societal value.

As Porter described in his January 2011 Harvard Business Review article, when applied effectively, shared value creation can burnish a company’s brand, attract new customers and help a company recruit employees and improve employee commitment to the organization. This, however, is only the tip of a value proposition that can go much deeper. It can directly help the company enter new markets, improve economies in existing markets and create totally new business opportunities—generating cost savings, as well as revenue gains.

While the HBR article and my February 6 blog focused on the opportunities for corporations to benefit from Shared Value Creation, a January 2011 Accenture study, New Waves of Growth: Unlocking Opportunity in the Multi-Polar World, effectively suggests ways in which shared value creation can help communities and countries, as well as companies.

Capitalizing on the Four Waves of Growth

According to the Accenture report, governments that hope to create significant growth in GDP and jobs over the next decade must capitalize on what it identifies as four major waves of growth. These waves are based on opportunities being created around:

  • The “silver” economy. The graying of the population, as through initiatives in areas including connected health, health and welfare products and services, lifelong finance and new products that are optimized for older people;
  • The resource economy. The providing of more reliable and cleaner sources of energy and other types of increasingly scarce resources (land, water, food, minerals, etc.), including the need to build and manage intelligent infrastructures and processes (as for energy, buildings, water and land management and so forth);
  • A multi-technology future. The rapid adoption and increasingly integrated roles that new technologies (such as superfast broadband, cloud computing, sensors, analytics, mobility and security) will play across all industries and processes and as integrated with traditionally distinct disciplines to create new fields such as bio-informatics, micropayments and manu-services;
  • The emerging-markets surge. The rise of a multi-polar world in which economic activity and resources are increasingly gravitating toward emerging economies and rapidly growing urban centers and creating new opportunities for all types of low-cost goods and services, citizen services and smart infrastructures.

Countries that effectively capitalize on these waves can, according to an Oxford Economics’ analysis commissioned by Accenture, gain huge benefits. The U.S., for example, could add 0.7 percentage points to its otherwise anticipated 3.1% average annual GDP growth and create 9.7 million additional jobs by 2020—a level of economic output and job growth equivalent to the current size of the entire U.S. auto industry. Other countries could achieve correspondingly similar gains. Germany, for example, could boost average GDP growth by 32% and employment by an additional 3 million, United Kingdom by 24% and 2.6 million and India by about 9% and 37.5 million jobs.

The Government Mandate

Although Accenture paints an encouraging picture for countries and societies that can effectively ride these waves of growth, accomplishing these results will take years of hard work. Strategies must be developed, smart infrastructures built, business environments enhanced and most critically, millions of people must be educated, trained and retrained to create and effectively utilize new capabilities.

This leads to the biggest challenge and the biggest opportunity of all. For better or worse, no single company, government or sector of society has the resources, the skills or the reach required to define comprehensive national strategies for, much less create the foundations for capitalizing on these waves. Positioning a country to capitalize will require entirely new levels of cooperation and coordination among all types of businesses, all layers of government and many different non-profit organizations (especially schools and universities).

This is a challenge in that so few countries have seriously attempted to foster this type of cooperation (and in that many attempts to do so have failed). It is an opportunity in that there has never before been such an urgent need to do so. Emerging countries must do so to address the rapidly growing aspirations (not to speak of the expectations and demands) of their citizens. Developed countries must find ways of compensating for relative declines in economic power and security and especially for preparing their citizens to compete and thrive in an increasingly global workforce.

The good news is that there are a growing number of examples in which corporations, schools, foundations and government entities are cooperating to address common needs. These, as discussed in my last two years of blogs and reports, include Microsoft’s Partners in Learning Program, IBM’s Academic Initiative, Intel’s Teach and Entrepreneurship programs, General Electric’s Ecomagination program (see my forthcoming March blogs and report) and IBM’s Smarter Planet and Cisco’s Smart+Connected Communities initiatives (see my forthcoming April blogs). Not to speak of Accenture’s own Skills to Succeed program.

But as effective as some of these and other industry efforts have been, and as promising as some of their prospects, most address only specific, often local elements of huge, multi-faceted national problems. Large-scale success will require thousands of such initiatives and increasingly formal coordination among them.

There is, however, precious little evidence that most countries are prepared for such efforts. The U.S., in particular, has a fundamental and very vocal disagreement as to whether such efforts will indeed help or harm the country. But disagreement notwithstanding, President Obama is intent on creating foundations for such cooperation. He has, for example, engaged foundations in his effort to enhance community college curricula and graduation rates and has recently enlisted two high-profile business executives to chair groups that are intended to align public and private-sector efforts around initiatives to prepare the nation for the future (and incidentally, to capitalize on Accenture’s waves).

In January 20011, he named General Electric CEO Jeffrey Immelt as chairman of his new Council on Jobs and Competitiveness (whose mission is described by its name) and Steve Case as chairman of Startup America (whose goal is to promote entrepreneurism and high-growth startups). Both are likely to enlist other executives into their efforts and coordinate their efforts with other business constituencies. Immelt is likely to draw members and ideas from groups to which he belongs, such as the Business Roundtable and the Business Council. Startup America, meanwhile, has already won support of and about $400 million in funding from IBM, Intel and Hewlett-Packard. Both groups will at least formalize private sector inputs into critical government decisions. Ideally they will do more, such as usher in an era of cooperation among public, private and non-profit sectors.

After all, as Accenture explains, no one segment of the economy controls all of the levers required to mobilize all the country’s efforts. “Coordination among the three sectors—business, government and non-profit—will no longer be a bonus, but a necessity.”

Posted in 21st Century Careers, Corporate Social Responsibility, Technology's Impact on Job Skills | No Responses »
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Elementary, My Dear Watson?

Sunday, February 20th, 2011

Don’t get me wrong. There was absolutely nothing elementary in IBM’s phenomenal work on Watson. The public debut of the machine (actually the real “magic” was in the software, rather than the hardware), was a triumph in a world that had been claiming, as far back as the 1980s, that “artificial intelligence” was just around the corner.

Still, there is indeed something about Watson that is clearly elementary: something that should give us great hope for the future—both Watson’s and ours.

The “Jeopardy Challenge” , in which IBM’s “Watson” computer handily defeated the two highest winning players in Jeopardy history, was only the latest in a series of Grand Challenges, in which IBM pushed the envelope of computer science to perform tasks that were previously considered beyond the realm of computers—the use of IBM’s Deep Blue in beating the world chess champion, Blue Gene’s role in decoding the human genome and even IBM’s role in enabling the U.S. the land a man on the moon.

Watson, however, went an order of magnitude beyond these previous triumphs of computer power. While the computer’s encyclopedic database and computational power certainly enabled its success, these capabilities were already available on off-the-shelf IBM hardware (2,800 cores and 15 TB of memory in 90 of its Power 750 servers and 20 TB of disk storage linked in a cluster).

Its real accomplishment was in its ability to interpret not just natural language, but the types of puns, metaphors and idioms that have come to characterize Jeopardy. This was enabled by a combination of off-the-shelf hardware and especially the secret sauce embedded in the Jeopardy-specific algorithms over which IBM researchers wrote, tested and tweaked over the last three years. And don’t forget the confidence rating and wagering algorithms which, while resulting in numbers that may have sounded strange to humans, were based on calculates of the odds for all types of contingencies.

Will the Real Watson Please Stand Up

Watson was certainly not perfect in its victory. In the first night’s contest, Watson modestly bested the score of one of its human competitors, and only tied that of the other. Night two, in the first round of Double Jeopardy, things got downright scary, with Watson being the first to buzz for, and correctly answer 24 of the 30 total questions. Watching the frustration of the helpless humans, one could be forgiven for thinking of 2001: A Space Odyssey’s HAL.

Then, with its blunder on its first round Final Jeopardy (Did Toronto recently secede from Canada and join the U.S.?) and its “merely human-level” performance (although it did reach a number of correct answers, but not in time to beat the other contestants) in round two, I got really scared. I began asking myself whether Watson consciously “backed off”, avoiding running up the score, either out of empathy for its flailing competitors, or out of fear that a machine that so dominated humans would be feared and shunned by society. While Watson did end up winning the three-night competition, the ultimate outcome wasn’t really determined until the last Daily Double, and the wager (that ensured it could not loose) that it made on the last Final Jeopardy question.

Why did I find this so frightening? Because I, who have been in the IT industry for more than 30 years, actually began to attribute human feelings to a hunk of silicon!

It is Indeed, Elementary

But I digress. As I discussed above, there was absolutely nothing in IBM or Watson’s Jeopardy performance that was “elementary.” It was, by any account, a stellar achievement.

So, what was so elementary about Watson’s triumph? The comparison of its success in winning a television game show, to:

  • The enormous challenges that civilization faces (and, not coincidentally, that IBM is attempting to address with its Smarter Planet initiatives); and
  • The contributions that Watson technology and learnings have the potential of making to addressing these challenges.

First, let’s recognize—Watson is a room size machine, residing in a specially designed and extensively cooled data center and that even its off-the-shelf components (without even accounting for the cost of developing the algorithms that were so fundamental to its success) cost hundreds of thousands of dollars. But, as Computer Intelligence guru Ray Kurzweil explained in his February 17 Wall Street Journal editorial, at the current rate of computer price-performance advances, Watson’s power is likely to fit within single server in about seven years and within a PC in a decade.

Just as importantly, a “real-life” system would not have to contain the sum total of world knowledge. These systems will be:

  • Tailored to the needs of a specific discipline (such as medicine or finance) or the needs of a specific company;
  • Will have access to the Internet, third-party search tools and external databases, rather than having to operate as a self-contained unit; and
  • Will not be required to devise answers that meet its minimum confidence levels within the three seconds that are required for Jeopardy.

Watson-like capabilities, will, in other words, be available to the public (or at least some segments of the public) within the next couple years. Meanwhile, IBM has already partnered with Nuance Communications to bring speech recognition capabilities to Watson (initially, specifically for healthcare).

Watson’s Next Careers

After Watson’s first (albeit brief) stint as a television star, it is ready to explore more “mundane” careers. But what are these careers likely to be?

While the Star Trek computer was a model for at least some of IBM’s researchers, most of Watson’s opportunities will be much more down-to-earth. Many are based on the coupling of Watson’s “Deep Question Answering” technology and deep analytics in decision support applications. Possibilities—or indeed, probabilities—may include:

  • Customer Service, which could improve service time and quality while simultaneously disrupting a business model in which so many call center jobs have moved to low-cost countries;
  • Financial Analysis, such as in the combing of huge quantities of structured data and unstructured information to identify likely acquisition targets;
  • Travel, such as in a new-generation navigation system in which drivers can ask for best ways of avoiding traffic, or more interestingly, to suggesting routes from X to Y that take one past attractions that best meet your profile, such as museums, restaurants or wineries that make 90+ point wines; and
  • C-suite assistant, to identify and assess business trends, evaluate a broad range of contingencies or running what-if analyses, such as the impact different product and advertising mixes may have on revenue and profitability.

This leads to what is probably the most important and imminent of applications for Watson Technology—its use in health care. Although the potential applications are numerous, the first and highest-impact application is likely to be in diagnostics, such as where a doctor can input lists of symptoms, medical histories, and a broad range of other relevant information to identify possible illnesses.

Better yet, it could be used to review individual electronic medical records to identify symptoms that a doctor may miss or large volumes of electronic records to identify linkages that have not previously been discovered. Longer term, it could even be used to bring first-line diagnostics to remote, emerging country villages that do not have access to doctors, such as by allowing nurses or technologists to input systems into a computer, to a remote Watson-based diagnostic system.

Many potential applications, as in health care or engineering, could face big legal questions. What if Watson made a mistake in diagnosing an illness or in calculating tolerances for a bridge? Or what if Watson correctly suggested an option, which was dismissed by the doctor or engineer? Or have we taken the first step into the science fiction era, where computers may obviate the need for humans in even some of the most demanding of professions?

While the answers to such questions will have to wait, the application of Watson technology to these challenges will not. The day after Watson’s Jeopardy victory, Columbia University Medical Center and the University of Maryland Medical School announced a plan to work with IBM on health care analytics research, with a goal of launching a commercial diagnostic and treatment offering over the next 18-24 months.

We will have to wait to see whether Watson will be as successful in its future careers as it was in its first. My guess, however, is that Watson’s descendants will have as great an impact on society, business and the nature of knowledge work, as the Internet.

Posted in IBM, Innovation/Entrepeneur, Job and Career Opportunities, Technology's Impact on Job Skills | No Responses »
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IBM Corporate Service Corps: Integrating Business Objectives and CSR

Sunday, January 23rd, 2011

This is a summary of my January 2011 report “IBM Corporate Service Corps: Integrating Business Objectives and CSR”. For more information on this report or to purchase it for $995, click here.

IBM has one of the strongest talent development programs and one of the strongest corporate social responsibility (CSR) programs in the technology industry. What do you get when you combine them? IBM’s Corporate Service Corps (CSC)—a great example of how companies can do well by doing good (see my May 2010 report for a view of another IBM initiative, this one or integrating its university CSR and internal talent development initiatives.)

IBM’s Corporate Service Corps is a leadership development program, inspired by the U.S. Peace Corps. It is intended to put IBM’s most valuable resource—its people—in places that can most benefit from their expertise, and provide these employees with experiences from which they can gain broad leadership and cross-cultural experience. It provides select, high-potential employees with intense experience in working with global teams on short-duration, high-intensity projects in emerging countries. It is also a big expansion of IBM’s CSR efforts that turns social volunteerism into a life learning experience.

CSC Objectives

The program, which was launched in 2008, deploys small, 8-12-person multi-disciplinary teams to provide pro bono consulting—helping emerging country government, nonprofit and non-governmental organizations develop specific plans for addressing some of their most pressing societal needs. These can range from upgrading a government agency’s IT environment and processes, to developing a supply-chain management process for getting agricultural products to market, to improving the quality of a community’s public water supply. While each project is different, each is intended to result in practical blueprints for solving problems that are limiting a country or a community’s growth and their peoples’ ability to contribute to that growth.

Although CSC is absolutely intended to deliver broad societal benefits to emerging countries, it is first and foremost a corporate leadership development program. Its goal, however, is not so much to teach specific business skills as it is to instill the qualities individuals require to become leaders in a globally integrated business. Participants are given deep, intensive exposure to emerging markets and diverse cultures and experience in forming and working in multi-cultural, multi-disciplinary teams. They are expected to return with improved cultural literacy, better appreciation for the strengths and limitations of different cultures and work styles, and especially greater adaptability and global teaming skills.

Although the program entails a lot of additional work (30-day in-country assignments plus extensive preparation and post-return requirements) in addition to the employee’s day job, participation is seen as both a privilege and a reward. It is a validation of one’s accomplishments in the company and as a steppingstone to advancement within the company. This makes the program extremely popular and selective—attracting about 10,000 applicants for the first 400 positions.

CSC Results

Although there is certainly plenty of anecdotal evidence to validate the program. IBM, being IBM, requires more formal evidence that its goals are being met. Harvard Business School assistant professor Christopher Marquis designed and conducted a formal survey of participants and recipients and evaluated the results as part of a case study on the program. His findings: CSC is “effective and executing on its goals and mission” (of providing a unique—and highly scalable and cost-effective—leadership development experience, societal benefits to emerging countries and improving employee’s perception of and commitment to IBM). IBM claims the program also delivers some additional side benefits, as in improving IBM’s brand in new and emerging markets and even in creating some new sales opportunities for the company.

In some ways, there is little that is really new in CSC. It combines two relatively common corporate practices—the use of overseas postings as an executive development tool, and encouraging and funding employees to perform volunteer work. The big difference is that IBM has integrated them into a fundamentally new form that delivers these experiences to far more executive candidates than would be previously possible, and does it in a cost-effective way that delivers additional benefits to the company.

CSC Futures

IBM will absolutely continue, and modestly extend the program. Its ultimate value, however, is likely to transcend IBM. Some of IBM’s customers, including Novartis, Federal Express and Dow Corning are already learning from and have begun to implement similar programs. Meanwhile, the U.S. Agency for International Development (USAID) recently signed a Memorandum of Understanding with IBM to create the Alliance for International Corporate Volunteerism (ICV). The alliance will expand upon the CSC model to facilitate participation by many other companies and create corporate responsibility networks that integrate activities of corporations, governments, international organizations, foundations and other participants. USAID will also serve as a delivery coordinator for some of these projects, thereby increasing the chances that CSC’s consulting recommendations will deliver their intended value.

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The Drawbacks of Specialized MBAs and Business Masters

Sunday, December 19th, 2010

Three of my recent posts have devoted a lot of virtual ink to profiling (The Trend toward Specialized MBAs), explaining (B-School Sub-Specialization), and to portraying (The Draws of Specialized MBAs and Business Masters Programs) some of the potential opportunities and advantages of what I see as one of the most important and fastest growing changes in business education in the last couple decades—the explosive growth in the Specialized MBAs and related business masters’ degrees.

But for all the momentum toward, and the strengths and promise of these programs, they also have limitations and face some daunting obstacles. This post briefly highlights some of these challenges and explains what I see as the likely long-term role of these programs.

Do Specialized Masters’ Deliver on their Promises?

Specialized masters’ programs promise much. They claim to provide short, intense and relatively low-cost/low-commitment approaches to preparing students for specific jobs. And since the programs are so focused, they have the potential of combining theoretical education and practical skills in ways that will give graduates a leg-up in competing for jobs in a tough economy.

Although the potential benefits are great and the arguments are compelling, the jury is still out on the value these programs actually deliver. Among the biggest questions are:

  • How well prepared are graduates? Although education may be focused and intense, these programs tend to attract and admit younger students with less business experience, and often admit people that do not have the grades that would qualify them for admission into traditional MBA (much less Executive MBA) programs. Just as importantly, few of these programs attempt or are able to provide the type of holistic education that is required of general managers or imbue graduates with the breadth of a multidisciplinary perspective—so-called T-shaped skills (in which a person has deep skills in an area of specialty and higher-level familiarity in a number of complementary fields)—that a growing number of companies are looking for and that are arguably required in today’s complex environment and multifaceted organizations.
  • Do they improve graduates chances of landing better jobs? The results are mixed. Although programs with solid reputations and established relations with corporate recruiters appear to have placement records similar to those of tier-two general MBA programs, less established programs often have difficulty on two fronts. First, many companies—including those that traditionally recruit large numbers of MBAs—don’t yet understand these programs. Second, even those that do, often don’t recruit at lesser known schools. This can force graduates to take much more initiative and work much harder to get their foot into the door. They may also find it difficult to demonstrate the value of their degrees, especially in organizations that do not have defined openings in the specific specialty. Also, while specialized degrees may be of value in getting into specifically defined fields, they make it much more difficult to enter broader fields, such as consulting.
  • What are graduates’ long-term career prospects? Another unknown. On one hand, specialized expertise may allow recruits to prove themselves and progress more rapidly than general MBAs in their specific fields. On the other hand, such specialized educations may be a disadvantage in qualifying or being considered for other positions. Specialized programs may also pose additional risks. These programs typically attract younger applicants with limited business experience. What happens if a graduate’s interests change? Or if jobs within a chosen field­­—such as banking or real estate—disappear?

Trend or Fad?

These questions all lead to a bigger and ultimately, more important question. Are Specialized Business Masters’ a long-term trend, or a short-term fad? Will they deliver the type of education and gain the type of market traction required to give graduates not just an immediate advantage in landing a job, but also in building a sustainable career?

Although some observers, such as the authors of the fascinating recent book, Rethinking the MBA: Business Education at a Crossroads (which I will discuss in future blogs), generally dismiss such programs, others, such as CNN, contend that specialized programs may eventually consign traditional one-size-fits-all MBA degrees “to the dustbin of history.”

I come down firmly in the middle. It is certainly true that traditional MBA programs are facing rising criticism and, as will be discussed in a future blog, undergoing big changes. Moreover, a growing number of favored recruiters, such as consulting firms, hedge funds and investment banks, are reducing the percentage of MBAs they hire in favor of very bright Bachelor’s grads (and in some cases, highly specialized PhD’s) and are encouraging more of their most promising people to stay with the firm, rather than pursue an advanced degree.) Even so, such programs—especially those of Tier One schools—are likely to remain the largest source of strategy consultants and fast-track general management candidates for years to come.

This being said, these positions will always account for a very small percentage of the total demand for business graduates. As I see it, once specialized programs begin to prove themselves, and the best schools are recognized, students and the employers will come. Students will be attracted by the combination of shorter (typically 12 month) time commitments, relatively lower costs and the opportunity to prepare for specific jobs. Employers will be attracted to students who can deliver immediate value in positions for which they have immediate needs—especially if they continue to command lower salaries than MBAs.

This being said, acceptance will differ greatly by degree, by school and even by country. Specialized programs, as discussed in my B-School Sub-Specialization blog, are relatively well established and accepted in Europe. The U.S. is a different story. Although a few degrees, such as those in information technology, taxation and especially accounting, have already achieved long-term traction, most still suffer from limited recognition and considerable confusion (both among employers and prospective students). Even when these constituencies understand the concept, few currently understand the real value of such programs relative to traditional MBAs.

What will be required for to achieve this recognition? First, schools (ideally in close cooperation with likely recruiters), must determine which specialties are most likely to yield the best job prospects, the relative need for general management versus specialized education and the tradeoffs between theoretical education and hands-on, real-world training. Second, schools must effectively (and ideally, cooperatively) communicate the value and roles of these programs relative to alternatives—especially MBAs (as the recently formed Specialized Programs in Graduate Business consortium is attempting to do).

As explained by Al Cotrone of the University of Michigan Ross School of Business, “a broad-based general management education will enable MBA graduates to one day be able to rise to the top of their organizations. But they have to get into the field first.” If specialized programs do indeed prove to be a valuable aid in getting that first job, they are likely to become and remain very popular—especially over the many years in which U.S. jobs are likely to remain tight.

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The Draws of Specialized MBAs and Business Masters Programs

Sunday, December 5th, 2010

My three previous posts on MBA programs examined the challenges that B-schools are currently facing, how a growing number of programs are responding to these challenges by developing specialized programs and then by drilling down into the ways in which some programs were migrating into increasingly narrowly defined sub-specialties as a means of targeting specific market opportunities and more effectively differentiating their programs from those of other specialized schools

The Growth in Specialized Business Masters Programs

This trend toward specialization continues to grow, with the vast majority of new degree programs now being specialized. While the trend, as suggested in the below Figure, is still growing in the U.S., it is already very well established overseas. (The University of Manchester, for example, now offers 26 specialized business masters degrees.) And interestingly, these programs appear to be more popular among women (48.4% in U.S. and 47.0% in international schools) than are the general programs (37.1% and 37.4%).

Figure: AACSB Member Master’s Degree Programs (2008–2009) number of schools offering at least one program in each category

Business Master’s Degree Programs U.S. International
General Master’s Degree (MBA) 454 160
Specialized Master’s Degree 298 140
Business Master’s Degree Enrollments U.S. International
General Master’s Degree (MBA) 151,215 89,200
Specialized Masters Degree 39,250 56,670
Source: Association to Advance Collegiate, Schools of Business

In fact, what began as a means by which small, second-and third-tier regional schools could tout pragmatic advantages relative to their larger, better known, more highly-ranked counterparts, has as discussed in my blog on sub-specialties, is even beginning to spread into some of the tier-one B-schools, including MIT, Carnegie-Mellon and Northwestern.

Why this growth? At a high level, business masters programs continue to be viewed as golden tickets to rewarding careers. The number of business masters conferred in the US has grown every year since 1969/70 (with exception of 1985/86, when the number slipped by 0.45%). When one digs a bit deeper, however, one finds that enrollment in traditional, full-time, two-year MBA programs has, at best, held its own over the last decade. All of the growth has occurred among non-traditional programs, such as part-time and executive MBAs, and especially specialized masters programs. Moreover, according to the fascinating new book, Rethinking the MBA: Business Education at a Crossroads, the health of full-time programs is effectively confined to the top 20-ranked U.S. B-schools. Full-time program enrollment in Tier Two schools (ranked 21-36) have fallen 17% over the last 8 years and lower ranked schools have fallen even more sharply. One-year degrees—driven largely by specialized programs—are already established as the de facto standard in Europe (although two-year programs continue to grow rapidly in Asia and Latin America).

Moreover, unlike the case in most recessions when MBA applications increase, applications are now falling. And so is demand for traditional MBAs. Hiring of new MBA grads has fallen dramatically during the recession and many of the traditionally favored employers (particularly financial services and consulting firms) have been forced to retrench. (Moreover, as discussed below, many of these firms had been reducing the percentage of MBAs in their hiring since long before the recession.)

Where is the growth? Canadian and European schools continue to see significant growth in applications and Executive MBA applications are up slightly. The real growth, however, is in specialized programs—especially those in accounting, finance and healthcare.

The Attractions of Specialization

This growth is largely a reflection of long-term global trend toward specialization. It is, however, being fueled by multiple factors affecting each of the three primary business education stakeholders: schools, employers and students. Schools (particularly local/regional schools and those below the top tier), are, as discussed in my October 24 post on B-School Challenges, are being buffeted by forces including falling enrollment in their core two-year programs, increased competition (both for applicants and for attracting qualified instructors) from European and Asian schools and challenges in placing graduates in attractive positions. As evidenced by their rapid adoption of specialized programs, they increasingly view specialization as the most attractive option.

Different schools, however, are taking different, and often multiple paths to specialization. Most programs, as discussed in my November 7 and November 14 posts, focus broadly on preparing students for jobs in traditional disciplines (such as accounting, financial management, IT management, brand management, supply chain management and human resource management) that are common across multiple industries and regions. New programs are being continually added (or existing programs tuned) to prepare graduates for the large numbers of jobs that are anticipated in fields including sustainability, compliance, risk management and business ethics. Other programs are targeted much more narrowly, as around the needs of specific and often local industries (including energy, wine, biotech and one of the most popular—healthcare).

Just as importantly, as explained by Michael Knetter, Dean of the Wisconsin School of Business, “the industry has been producing too many generalists relative to what is needed.” “The student satisfaction ratings and placement outcomes that we saw out of our specialized programs were far superior to what we found in our general management program.”

A growing number of prospective employers appear to agree. Although many companies do not yet understand or recruit from these programs (which I will discuss further in my upcoming December 19 post), some of those that do see much value in graduates that have specific education, proven interest, hands-on experience (as through internships) and, in some cases, deep technical and analytic skills, in specific industries and functions. This allows these graduates to make immediate contributions with little additional training—a particular value to companies (especially smaller and mid-size companies) that rely on “just-in-time” hiring for a specific job, rather than bringing in large classes of new graduates. These companies are also attracted by these graduates’ salary requirements, which are often closer to those of a bachelor’s degree in business, than those with a full, two-year MBA.

The Value to Students

Schools are looking to specialized business masters programs to attract more and different types of students (and better appeal to recruiters) while employers view them as a means of filling current openings with moderately-priced people that can deliver immediate value. In the end, however, for these programs to succeed in the market, they must attract students.

As I discuss in my next blog, the jury is still out as to whether these programs do or will yield better placement rates (much less cost/salary tradeoffs) than do more traditional business programs. However, they do present a logical and compelling case for improving a graduate’s prospects relative to less specialized and intensively trained (not to speak of higher priced) MBAs and less intensely focused (albeit lower priced) business bachelor degrees. This is particularly true since many of these programs tend to provide greater opportunities to balance theoretical education and real-world engagement (both through more hands-on and experiential courses and highly targeted internships and work/study programs) than to other business programs.

Just as importantly, specialized masters degrees also dramatically lower the financial bar for obtaining a graduate degree. They often cost less than half as much as a full MBA from a comparable school and slash the opportunity cost from two years to one. Such considerations can be particularly compelling both to students and their parents—especially during a recession and painfully slow recovery

Although such programs are definitely not for everyone (again, see my next blog, they do hold particular appeal, and promise particular value to certain types of students. Examples include:

  • Students with clearly-defined career objectives and self-starters who want the opportunity to chart their own paths;
  • Early-or mid-career employees looking to change careers (such as by leveraging math or IT skills into financial analysis), deepen skills in their current industry or function (such as brand management in specialty retail) or leverage technical careers into more generalized management career paths (as with the many business programs tailored specifically to the needs of mid-career scientists and engineers);
  • Undergraduate business students looking to deepen their technical skills or undergraduate technical students looking to integrate a management perspective atop their technical skills before entering the job market;
  • Students with less-than-stellar undergraduate records who may not qualify for top-tier MBA programs and will find it easier to distinguish themselves in a more differentiated, often less competitive environment; and
  • Those looking to complement current or contemporaneous masters degrees (general MBAs as well as degrees in fields ranging from education and architecture to sustainability and IT) as a means of improving or focusing their career prospects.

While all specialized business master programs have their own specific draws, proponents and detractors, two of the first, most proven and still most popular specialized business master programs—those in accounting and finance—offer particularly demonstrable benefits:

  • An MS in Accounting, for example, provides a means by which aspiring CPAs can bridge the gap between their undergraduate coursework and the 150-credit-hour requirement for the CPA;
  • An MS in Finance can provide the technical and analytic skills required to land a highly competitive position in financial services. These programs have also been instrumental in helping mathematicians, computer scientists and physicists leverage their skills into new careers as “quants” (quantitative financial analysts).

But for all the attractiveness and potential benefits of specialized business masters, they are not, as mentioned, for everyone. Many of these programs also have some serious drawbacks. These are the topics of my next post.

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Business School Sub-Specialization

Sunday, November 21st, 2010

My previous post provided an overview of the trend toward specialized MBAs. It showed the veritable explosion in horizontal specialties, the pace at which B-schools—especially second-tier and regional schools—are spawning such programs and the pace by which students (over 20% so far) are flocking to them.

While this type of specialization may well help these schools differentiate themselves from those with more generalized programs, how will the specialists differentiate themselves from the rapidly growing number of other specialists?

This post looks at how all type schools, from small, specialized regionals to some of the worlds’ largest and most prestigious schools are taking specialization to new levels and into important new areas.

Growth in Industry Specialized Programs

Although most specialized MBAs are focused on relatively horizontal disciplines, a growing number of schools (led by BEM Bordeaux’s Wine MBA) are building programs to prepare graduates for jobs in industries with large concentrations of companies in their areas. Rutgers (New Jersey), for example, offers an MBA in pharmaceutical management and University of Oklahoma has an energy concentration and Suffolk University (Boston) offers one in healthcare. Suffolk University (Boston) offers one in healthcare and, not surprisingly, Scotland’s Queen Margaret University has an MBA in Golf and Country Club Management.

Not all industry-specific programs are designed for local industries. University of Tennessee–Knoxville, for example, offers an aerospace MBA in which twenty percent of its curriculum is unique to that industry. It also offers an executive MBA (PEMBA) that is targeted exclusively at physicians, addressing issues including government regulation and HIPPA. Southern New Hampshire University, meanwhile, has a program in sports management and Concordia University’s Molson School (at the behest of the Montreal-based International Air Transport Association and the International Civil Aviation Organization, created an International Aviation MBA.

Many such programs leverage or provide joint degrees with other schools within the university. Although joint degree programs (such as the venerable JD/MBA) have been around for decades, schools are increasingly integrating their curricula into truly inter-disciplinary programs. University of Oklahoma’s energy program, for example, was created and is taught in conjunction with the university’s engineering school and results in joint MBA/MS degrees. Boston College, meanwhile, leverages the college’s highly regarded divinity school to offer a joint MBA/MS in church management and pastoral ministry.

Emergence of the Techno-MBA

But, with all this diversity, we have begun to see the emergence of another cross-disciplinary specialization that is beginning to sweep across all types of universities and MBA programs. This is the emergence of so-called techno-MBAs that integrate business and technology training. Although many such programs are outgrowths of information management specializations within an MBA program (how to manage and effectively use IT to deliver business value), a growing number of programs are intended to prepare managers to run technology-based businesses. The effort generally began in the mid-1990s when Queen’s University School of Business (Ontario, Canada) created a program intended to transform career scientists and managers into managers.

Many other B-schools, including those of Boston University, Northeastern, University of Washington, Purdue and University of North Carolina at Chapel Hill have followed suit, often by integrating work across their business, engineering and science schools. Some tailor these programs to the technology of and unique business needs of specific industries. University of Pittsburgh’s Katz school, Carnegie Mellon’s Tepper School and MIT’s Sloan school, for example, all offer programs build specifically around bio-tech.

University of Pennsylvania (through a combination of its business and engineering schools) goes even further with its Executive Masters in Technology Management (EMTM) program. It offers specialties in areas including biopharm and biotech, IT and telecommunications, nanotechnology and materials science and energy, sustainability and the environment.

Tier-One Specialization Programs

Those who recall back to my previous post may remember the generalized dictum that it is primarily tier-two and regional business schools that are offerings specialized MBAs. Most of the tier-one schools are redefining their curricula to provide broader, more holistic educations. But, as I mentioned in the previous section, some of these schools (such as Penn and MIT) do offer specialized techno-MBA and joint-degree programs. These schools and programs, however, are not alone. Northwestern’s Kellogg, Berkeley’s Hass and MIT’s Sloan schools now offer specialized MBAs, majors, or dual degree programs in areas like real estate, sports management, biosciences, electronic commerce, and health care.

University of Michigan’s Ross School, although it does not offer any specialized MBAs, works closely with other schools within the university to create specialized electives and dual degree programs that are tailored to the needs and desires of the student. It, for example, currently has 20 such programs that combine MBAs with degrees in disciplines including area studies (China, Russia, Middle East, etc.), engineering (construction, manufacturing, naval and so forth), education, architecture, medicine, music and urban planning.

University of Chicago’s Booth School, meanwhile, is taking its own, very individualized approach to specialization. Although it does not offer specialized degrees per se, the school has leveraged its deep analytical and quantitative capabilities to create world-class reputations in fields including economics and finance. It is now applying similar quantitative methodologies to other fields—especially marketing. Although Booth has long taken a data-driven approach to marketing, it recently reached an agreement with Nielsen, under which Booth will become the academic clearinghouse for the company’s Homescan and ScanTrack databases and gain exclusive academic access to its MonitorPlus database. Its goal is to use this unique access to effectively reinvent marketing and to establish Chicago as the leader in and home of the next generation of data-driven marketing.

So, B-school specialization appears to be here to stay. But what will it mean to schools, to students and to the companies that recruit these budding specialists? That is the focus of my next blog.

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The Trend Toward Specialized MBAs

Sunday, November 7th, 2010

Business schools have traditionally been aligned and have traditionally taught students along functional lines. Departments have been formed and managed, case studies designed, curricula defined and courses taught around relatively discrete disciplines, such as marketing, finance and international business. Students selected concentrations and mixed-and-matched courses from each discipline in accordance with their particular interests. These specializations, however, have traditionally been taught within the context of a broad management framework that was intended to provide students with the type of integrative perspective required to make complex, multi-faceted decisions.

Many mid-tier schools, particularly those with regional, rather than national/global reputations, saw a big limitation in this model. The vast majority of their graduates would not become the type of top corporate executives that would make full use of these integrative frameworks. Most companies were looking to these schools to provide specialists who could immediately contribute demonstrable value to their companies.

Rapidly growing numbers of mid-tier schools, therefore, are working to increase and demonstrate their graduates’ relevance to these employers by restructuring their programs around increasingly focused disciplines. Many offer MBAs that are targeted at preparing graduates for specific jobs or for work in specific industries.

The Birth and Growth of Specialized MBAs

The trend toward specialized MBA programs began in 1990 after the Association to Advance Collegiate Schools of Business International (AACSB) changed its accreditation guidelines to encourage schools to develop innovative curricula. The University of Wisconsin at Madison was one of the pioneers in this practice, launching its first specialized program that same year. It has since gone further than virtually any other university in its embrace of such programs. In fact, it eliminated its general MBA program altogether in 2004, opting for a program that consisted of 14 specialized programs including applied corporate finance, market research, real estate and urban economics.

Such specializations provided a convenient way for mid-tier schools to differentiate themselves from, and change the terms of competition with larger, better-known and better-funded schools. Then, as some of the early specialists began to improve graduate placement rates, the trickle of specialization grew into a flood. AACSB figures, for example, show that 298 U.S. business schools now offering specialized MBAs.

These schools often begin by introducing specialized programs in established management sub-disciplines, such as human resources, project management, information technology management, supply chain management and nonprofit management. A growing number of schools have created new specialties in areas that hold the promise of particularly attractive or rewarding careers, as in business analytics, asset and wealth management and brand management. New programs have since begun to emerge around currently hot fields including entrepreneurship, sustainability, corporate social responsibility, global management, innovation, social media and risk management.

Such programs are also proving to be popular among students. AACSB, for example, estimates that more than 20% of all MBA students are now enrolled in such programs and that this enrollment continues to grow at about 4% per year.

A Global Phenomenon

Nor has the trend toward specialized MBAs been confined to the United States. European B-schools, especially in France, were also early adopters of the specialization model. The ESSEC Business School, for example, launched its first specialized MBA program (in international luxury brand management—with sub-specialties in fields including fashion, fragrances, jewelry and cars) in 1995. It now offers a couple such programs, including one in hospitality management. The BEM Bordeaux management school, logically, offers its Wine MBA, built around a curriculum that is intended to prepare managers for careers in different aspects of the wine trade. France’s HEC School of Management, meanwhile, now offers 12 specialized master’s programs in areas including law and international management and entrepreneurship. U.K.-based schools, such as the Cranfield School of Management, offerings specialized degrees in areas including innovation leadership, international human resources management, logistics and supply chain management.

Asian universities have begun to follow suit. MBA India, for example, lists about two dozen schools offerings specialized degrees in fields such as real estate, construction, bank, travel and tourism, pharmaceutical and even rural management. The Hong Kong University of Science and Technology Business School, meanwhile, offers master degrees in e-commerce management, investment management and information systems. China, which has so far authorized about 60 universities to offer MBA programs, is following suit. The Beijing Institute of Technology, for example, offers MBAs in manufacturing and government management and Beijing University now offers an Aviation MBA. In fact, according to AACSB, more than 140 schools outside the U.S. now offer such specialized programs.

In other words, worldwide, 438 out of 599 AACSB-accredited graduate business schools already offer at least one specialized program—many offer multiple programs. Other schools are introducing specialized programs or integrated multi-disciplinary programs every semester. But while such programs may well differentiate these schools from those that offer more generalized MBA programs, how can schools differentiate their specialized programs from those offered by others? That is the topic of my next post.

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