“What makes a country prosperous is not investment in science and technology. It is businesses producing high paying jobs by having unique products and processes that a customer needs”.
This is from Roger Martin, a former management consultant, who is now Dean of the Rotman School of Management at the University of Toronto.
Under the Globe & Mail headline, “Canada will shrivel under business-school neglect”, Roger Martin was sounding the alarm. Canada’s business schools are starving for funds and need their share of government support. What does he really want? That government invests in “business education” as opposed to “research in science and technology”.
There is a “fundamental crisis in funding business education on a national scale”. We hear people say, ‘Well, what we need are scientists and engineers running these companies because these are tech companies.’ But if we in Canada would like to have companies like Hewlett-Packard, IBM, Microsoft, Apple, Cisco and Intel, find out how many of their CEOs have science and tech degrees. The answer is there are a lot more MBAs than science and technology degrees”.
It is ironic that all the companies cited by the dean had founders with a science and technology background and none had a business degree. Jim Colliander has an excellent post on this. “Who does he think creates those products and processes? Business majors?” Jim does a great job listing the people who founded the companies cited by the dean, and their qualifications. We cannot repeat it enough:
Bill Hewlett and David Packard were electrical engineers. Bill Gates was a math major/computer scientist at Harvard before founding Microsoft. Paul Allen also studied computer science. Steve Ballmer majored in mathematics and economics. Apple’s Steve Wozniak is a computer scientist and an electrical engineer. Cisco’s Len Bosack started as a computer scientist, and Sandra Lerner has a Bachelor’s degree in political science, a master’s degree in econometrics and a master’s degree in statistics and computer science. Intel’s Gordon Moore has a PhD in Chemistry and minor in Physics. Robert Noyce has a Ph.D. in physics. Same story for Google’s Sergey Brin (a computer scientist/mathematician), and Larry Page (computer scientist). Same for Facebook, without forgetting the engineer in Mike Lazaridis and Research in Motion.
One can surely argue that high tech companies are often started by scientists and engineers, but they don’t grow beyond a certain size and profitability without professional management. Google’s Brin and Page needed Eric Schmidt, Apple’s Wozniak needed Steve Jobs, and Lazaridis couldn’t have done it without Jim Balsillie.
But they can also “blow it”. Remember how and who sank Nortel, when it was sitting on the world’s largest pool of high tech. patents? And what about the role of Harvard Business School grads in using the processes (financial instruments) developed by mathematicians to sink Merrill Lynch, Bear Stearns, Lehman Bros, and the rest of us?
There is another troubling aspect of the dean’s rant.
- “The Canadian government is starving management education. They have reinvested in education in the only way they can directly, which is through chairs in research and the like. They totally bypassed business education”.
- “We have an innovation crisis in this country and these people say that we still haven’t invested enough in science”.
- “… the arts are getting an incredibly rich allocation of the money at all levels. It is only business that is not.”
In other words, the “free market” proselytizers are now asking for more government help. Business schools want to be exempt from government’s regulation of tuition, proceed to charge exorbitant fees, while preaching against government’s interference with the free market system. But when these major proponents of the free market system need help, who do they turn to?
But the pitch of the UT dean is more targeted. He is saying that Business Schools are not getting their fair share from the Tri-council and the CFI. He is totally oblivious of the fact that these programs are for funding research and not education per se.
“Of all the money given out by the Canada Foundation for Innovation, a big federal grants program, nine times more has gone to arts and literature than to business. I am not even talking social and human sciences – that is 41 times.” It will be interesting to see if the Presidents of NSERC, SSHRC, and CFI will respond with some data of their own.
I have been dealing recently with a “two-body”-style hiring at UBC, one of which being in “social psychology”, and I got to learn that the Sauder School of Business have mathematicians, economists, sociologists, and psychologists, as do the UBC Faculties of Arts and Science. The only difference is that the social psychologists in the department of psychology are paid a fraction of what their counterparts in the business school earn. Are we now to ask the Tri-council to adopt some artificial eligibility criteria (based on academic unit affiliations) in order to separate researchers, who are otherwise working on similar research themes?
Is the dean saying that Canada’s business schools want very high “market salaries” and unregulated “market tuition”, but don’t want to compete for granting council research funding? Is he angling towards a separate “pot” within SSHRC, or maybe even a new “federal boutique”, solely dedicated to business education (not even research).
This said, we should not forget that, as recently as 2009, business schools got a preferential treatment from the federal government. Indeed, after having cut the Tri-council by 5%, the 2009 stimulus federal budget proceeded to earmark the $17.5-million assigned to SSHRC for graduate scholarships towards students in business and finance.
Is it possible that the dean is coming back for an “encore”? Well aware that the AUCC ask from the upcoming federal budget singles out support for SSHRC, can he be aiming for a good chunk of any potential budget increase to go for business schools?
We shall know on Tuesday, whether all this is simply for Flaherty’s ears.