Ross School of Business helps drives urban renewal in Detroit

Demand for MBAs with social impact grows as millennials practise ‘positive business’

February 19, 2015

Source: Reuters

Awaiting service: the dean of the business school said students were enthusiastic about projects to revitalise the city

The post-apocalyptic images of empty homes and buildings that were beamed around the world as residents deserted a bankrupt Detroit came to symbolise the impact of the financial crisis on the US economy.

For students at the University of Michigan’s Ross School of Business in the nearby city of Ann Arbor, it is a cautionary lesson in how the free market can go wrong.

Wall Street can perhaps take some of the blame for the decline of Motor City, having sold Detroit’s city government a string of risky financial instruments, and the broader global downturn was the trigger for much soul-searching in business schools around the world.

But proximity to Detroit has also provided an opportunity for Ross’ staff and students to participate in the city’s rebirth.

It is a task they have taken to enthusiastically, said Alison Davis-Blake, the school’s dean.

At the start of this academic year, first-year MBA students worked on a project that launched a new company buying computers from large firms, wiping clean their memories and selling them to Detroit businesses at affordable prices.

Every year, Ross’ first-year MBA students spend two months on project work, embedded in businesses – and many of these are based in Detroit. There are classes for Detroit start-ups in product design and entrepreneurship. And there is even a student club dedicated to offering firms consultancy support.

An engine to regenerate Motor City

If you believe that business “is going to be the engine that revitalises Detroit”, said Professor Davis-Blake, the city and the business school are a “natural pairing”.

The city’s problems provide an outlet for the practical, project-based philosophy of “action-based learning”, which has been pioneered at Ross for several decades, as well as the vision of “positive business”, which creates wealth while benefiting wider society, too.

“I’m surprised that, regardless of what students’ prior exposure is to Detroit, how interested and engaged they become in this really significant problem of urban renewal and how quickly many of them become committed to making it a part of their education, if not part of their future,” said Professor Davis-Blake. “It’s really amazing how the problems and the opportunities capture the attention of our students.”While the vision of positive business reflects the University of Michigan’s long-standing aim to provide “an uncommon education for the common man”, Professor Davis-Blake said that she also detected a shift in the attitude of students, stating that the key concern for a “sizeable majority” of applicants is now social impact. This “millennial generation” may well have been influenced by the impact of the financial crash, she said.

If Ross is well placed to cater for this demand, it may stand it in good stead during what its dean predicts will be more challenging times for the business school sector.

Western demand for MBAs is “flat”, as some students and employers choose to rely on cheaper bachelor’s qualifications instead, said Professor Davis-Blake, who argued that the ability of US business schools to cater for the growing Asian market is “finite” as global competition grows.

Some smaller schools are likely to close, while others may shrink their MBA provision, she said.

Professor Davis-Blake added: “I think we will see schools increasingly trying to differentiate themselves in terms of how they are offering the MBA…but I do think there will be some sort of industry shake-out.”

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