The overlooked business education in MENA
The Financial Times issued its ranking of the world’s top 70 executive business programs. Nearly all successful emerging economies are on the list, as are advanced economies, but no program in MENA has made the list. Several countries have multiple programs represented in their domain, such as Chile, Brazil, Mexico, South Korea, Singapore, to name a few.
Executive programs are an important indicator for future top management and leadership role jobs. The programs need to be in close proximity to its “students” on two levels, so that the participants can continue with their day-to-day functions, and the company can financially afford such a program. Only a few SMEs are able to afford sending their staff to external programs, most are unable to do so. Few mid-level managers may be proficient in a foreign language. If MENA needs to generate the much needed non-public sector jobs, the region is unable to provide the necessary resources to train its “captains” in industry and banking.
There is a lot of attention on improving the quality of education in high schools and universities, with a focus on sciences and engineering. True, a country needs first rate engineers, scientists, doctors, etc. but, it also needs a strong army of leaders in other disciplines. There is a relative negligence of the business discipline in MENA and as a result, this field of study does not attract the best and the brightest. In advanced countries, business, accounting, marketing and advertising gurus are highly sought after fields, at times to the detriment of other fields, such as engineering or sciences.
Engineering and scientists are essential for grooming tomorrow’s innovators. But, these innovators need others to translate their ideas into commercially viable concepts and operations. If there is a dearth of those who can help them with the business side of the operation, the best ideas could die at inception. Steve Jobs (Apple), Bill Gates (Microsoft), Pierre Omidyar (Ebay), or Mark Zuckerberg (Facebook) changed the way we work today not solely by their brilliant ideas, but by their decision to leave the operational aspect of their company and ideas to professionally trained business experts. They focused on what they do best – the core business of innovation. It was with the help of these experts that the innovators could also invent the viable business model, differentiate their products from the competition, develop the advertising and marketing strategies to generate the consumer demand and taste, and scale up the company financially and operationally.
Often the less than stellar business acumen of corporate leaders causes the catastrophic demise of established companies. Sometimes, it is not even the innovative product but the clever business model that proves a winning card. Starbucks did not invent the coffee, but it changed the coffee culture that has successfully created thousands of jobs worldwide.
What could be some of the consequences of not having enough well-trained business managers?
First, it hinders the potential of establishing large labor-intensive firms. A recent MNA blog states that only the very large firms and young firms create the quantity and quality of jobs needed. Large labor intensive firms rely extensively on the capability of middle managers to efficiently organize workers and make things happen in time, with high quality and within cost. A point raised by Richards and Waterbury’s in their book on “A Political Economy of the Middle East.”
Second, young firms cannot transition and expand from family/owner held to publicly owned/listed companies, as this step requires professional management and better corporate governance.
Third, the dearth of trained middle managers could deter foreign investors. In a survey of 700 European foreign firms engaged in offshoring, the MENA region was the region with the highest share of foreign managers (see figure below). About two out of three managers in these firms were foreign – higher than other regions. The lack of local business talent to navigate through the difficult business environment may be a factor in the lower FDI to MENA.
Distribution of foreign and local managers in FDI firms (Click to Enlarge)
Source: Dutch Offshoring Survey data, 2010
Some may say that MENA can send its students to foreign programs. True, but apart from cost-effectiveness, can it meet the massive numbers needed in this field? Others will say that there are business schools in the region (e.g. Olayan School in Beirut) but none are highly rated yet. Two regional programs are in the 100 regular MBAs (not executive MBAs) but they are campuses of foreign universities in UAE (Singapore’s Jain and UK’s Hult Schools).
When a country wants to improve its health sector it needs doctors; to reform its judiciary, lawyers and judges; to build its infrastructure, road or civil engineers. Can MENA create the much needed private sector jobs without due attention to this discipline?