In 2019, ESCP Europe Business School will celebrate its 200 years of existence. As the world’s first business school, ESCP Europe pioneered the business school concept as early as 1819. At the occasion of its bicentenary, this article looks at the past, present, and likely future developments in management education.
Past
ESCP Europe was established in 1819 by a group of economic scholars and businessmen, including the well-known economist Jean-Baptiste Say and the celebrated trader Vital Roux. Its foundation marks the beginnings of the history of business schools. While this was not the beginning of management itself, it represents an important landmark for management education and a more institutionalised approach to the latter.
Management, which derives from the Italian word maneggiare (to handle, especially tools or a horse) deriving itself from the two Latin words manus (hand) and agere (to act), was conceptualised not before the 18th and 19th century as a result of the industrial revolution. Probably one of the most widely known conceptualisations is Adam Smith’s 1776 work, The Wealth of Nations, in which he analyses among others the efficiency reached by labour division. With the Industrial Revolution, businesses grew, ownerships changed and a need for managers evolved. Higher-education institutions started courses in management, for example in Germany where several universities created Chairs in Administrative Science within the so-called Cameralism.
In 1819, ESCP Europe became the first stand-alone, full-fledged business school. Three different periods in the history of business schools took place since then with a fourth era standing at the doorstep. The first period is characterised by the creation of the initial institutions such as Wharton and HEC Paris, both in 1881, or the Harvard Business School (HBS) in 1908. This period was followed by the second era, starting approximately in 1945, in which those institutions aimed to become more scientific with the objective of strengthening management as a standalone discipline. This movement was particularly enforced by the Gordon/Howell report written for the Ford Foundation in 1959. The creation of EQUIS in 1997 represents a key date for the third period symbolising the rising importance of accreditation bodies and international rankings such as The Financial Times ones.
Present
Currently, business schools are confronted with at least four challenges. First, the emergence of rankings and accreditation bodies has resulted in many schools adopting a short-term and undifferentiated, me-too approach. Second, several of the most prestigious institutions have been criticised for their lack of focus on ethical decision making. Third, the shift toward more scientifically robust research has resulted in faculty focusing on questions that might not be entirely relevant in preparing their graduates for the job market. And finally, the digital revolution (i.e., the emergence of artificial intelligence, MOOCs, and SPOCS) questions the very idea of knowledge transmission itself.
All these developments take place in a context of stronger financial pressure forcing institutions to accept larger student numbers as well as an increase in competition due to globalisation, digitalization and the entry of new players into the market. Sciences Po or CentraleSupélec, as example for many political science and engineering schools, are now offering programs in business and management. In addition, companies start their own corporate universities such as the Apple University.
These evolutions are so fundamental that they start a new, fourth era in the history of business education with 2012 as potential starting date with the New York Times proclaiming this year as “The Year of the MOOC”.
Future
In future, four developments will be specifically important: First, decreases in public funding increase the need for private financing – especially from alumni. This leads business schools to adopt a student-centric perspective: extracurricular activities, from study trips to student clubs and sports, will become essential in obtaining satisfaction and develop long-term bonds with alumni. A clear differentiated positioning will help companies and corporate partners to understand why they should invest in one business school over another.
Second, knowledge transmission via traditional lectures will become the exception due to higher education’s digital transformation. Students will evolve from passive consumers of information to active co-producers of courses. They will need to be given reasons, why they should come to a physical campus for their education: Coaching sessions, teamwork, and in-class discussions will be the norm. Work spaces in the form of anti-cafes such as the one of EM Lyon will become essential to fostering exchange among students and professors, but also executive education participants, and alumni.
Third, brand building becomes vital. Alumni and students will need to serve as brand ambassadors, especially in the social media environment. Faculty will need to move toward a mind-set where scientific research needs to be simplified in order to be adopted by (business) press. Schools will need to develop the right image in areas such as corporate social responsibility and sustainable development since they are expected to take a strong stance here.
Fourth, business schools will shift from knowledge transmission to skills development since knowledge becomes readily available on YouTube, Wikipedia, and Google. Thus, faculty will evolve from knowledge professionals into moderators and coaches. Career services will increasingly occupy a central role in helping students to identify jobs that best fit their talents and skills. Ensuring a good start in the most appropriate job is important, not only to ensure student satisfaction and a high perceived ROI of (increasing) tuition fees, but also over the long run since only successful alumni will evolve into loyal donors later.
In 1819, ESCP Europe established the business school. In 1973, ESCP Europe was again a pioneer, inventing the first cross-border multi-campus business school enabling its students to move across and study in different countries during the scope of their studies. In 2019, ESCP Europe, now implanted in Berlin, London, Madrid, Paris, Turin, and Warsaw, will celebrate its 200th birthday ready to (re)invent the business school once again.
- Kaplan, Andreas M. (2018) A school is a building that has four walls… with tomorrow inside: Toward the reinvention of the business school, Business Horizons, 61(4), 599-608.
- Kaplan, Andreas M. (2014) European management and European business schools: Insights from the history of business schools, European Management Journal, 32(4), 529-534.