B-school graduates prefer pay over profit

Updated on: Saturday, May 14, 2011

Entrepreneurship may be the buzzword on B-school campuses but at the end of the day management students find the sky-high salaries on offer rather hard to refuse, with the vast majority opting for a regular job. A 2011 global study by the Graduate Management Admission Council, which conducts GMAT, found only 5% of final-year management students opted for self-employment.

The figures were highest in Europe and Canada, with 8% and 7.3% of students respectively opting for entrepreneurship. The Asia-Pacific region came third, with 5% of students choosing to turn entrepreneurs, while the US was last with only 3.8%. That the US fares low on the entrepreneurship scale this year is cause for much surprise. David Wilson, president and CEO of GMAC, feels there are a number of factors at play in the US, which drive young people towards steady jobs instead of entrepreneurship. “The recession that hit the US was so deep that students aren’t ready to give up everything and turn entrepreneurs right away. They’d rather get a job first,” says Wilson. He also points to the fact that America’s baby boomers are now reaching retirement, with a lot of opportunities for newcomers in industry. He adds that after the dotcom bubble burst, a lot of youngsters who had jumped straight from high school to entrepreneurship were looking towards management education and a steady job.

Tapan Parekh, a Mumbai-based entrepreneur who graduated from the University of San Francisco with an MBA focused on entrepreneurship, points out that while the meltdown in the US economy has seen more people opt for steady jobs, there’s also a credit crisis in that country with banks unwilling to lend money to those starting their own business. As for India, Parekh feels that entrepreneurship isn’t looked at too favourably. “It isn’t an option for most people after graduation,” says Parekh, pointing to the risk aversion amongst most Indians, who “pull out their money the moment the stock markets crash”.

T Prasad, who began the Centre for Student Enterprise at the National Institute of Industrial Engineering, Powai, blames a mediocre system of education across the world for not making students ready for entrepreneurship. “If the system was enterprising, you would automatically have more entrepreneurs,” he says, adding that the environment in Western countries was more conducive for entrepreneurship than the East. “It isn’t just academics but family upbringing itself that encourages independence in places like Europe, Canada and the US,” he added.

Madhukar Kamat, group CEO and managing director, Mudra, feels a B-school education has nothing to do with entrepreneurship, adding entrepreneurs don’t necessarily have to be management graduates. “Most successful entrepreneurs are B-school drop-outs,” says Milind Sarwate, CFO and group HR officer at Marico.

B-school graduates prefer pay over profit

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