Dialogue: Business school catalyst for wealthier NZ

By ANDREW GRANT*

If the NZSE-40 had performed in line with United States markets over the past 20 years, it would have created an extra $600 billion in value - roughly $160,000 for every New Zealander.

With that in mind, we should applaud the plan by the Government and Auckland University to build a world-class business school.

It has the potential to foster wealth for New Zealand the way the Stanford and Harvard business schools have fostered wealth in Silicon Valley and Boston 128.

Top business schools do not merely train people to lead medium and large corporations.

They also drive growth by preparing talented people to start new businesses.

I have seen this happen. Over the past decade, McKinsey & Co has been the largest employer of MBAs from the world's top business schools.

But we now face tough competition from innovative new businesses that know the value of such talent, and from MBA students who want to start their own businesses.

I have heard the view that we already have many talented people in business education and good business schools and that we do not need another one. But I believe we should create an institution that will be in the top tier of business schools worldwide.

The recipe for a world-renowned business school is clear.

It needs at least 200 of the best local and international students, a top-notch faculty with institutional links to other high-quality academic networks, and connections with other parts of the university - especially engineering, information and communications technology, and medicine.

The business school must be in or close to the business community, with strong mutual commitment, including financial support.

Finally, it must have an attractive location and lifestyle, and be close to international airports and links.

When we look at this recipe for success, two questions arise.

Could the Auckland business school create links with other institutions?

And could it win support and money from the business community?

In both cases, I think the answer is a conditional yes.

First, regarding creating links with other institutions, I contacted a number of the world's most-respected business schools to assess their appetite for a joint venture.

They said emphatically that Auckland was the only university with the capability to achieve a link but they stressed that much would have to be done before they would consider it.

Second, there is strong evidence of business support and money being available. Of course, there needs to be - the Auckland University proposal requires it to be jointly financed by the private sector.

The Government will match the money raised privately.

There are claims that private finance is bad, as it could encroach on the independence of academics.

This is an absurd and outdated notion. To claim that Harvard, Stanford, Oxford and Cambridge universities are academically compromised because of private finance is silly.

In fact, this public-private partnership will discipline the University of Auckland to fulfil its promises.

But the local and international businesspeople who will jointly finance this will want to be close to their contribution.

That is why I think the business school needs to be in Auckland, where these individuals regularly find themselves.

There are good reasons why those of us in the business community who believe New Zealand needs to significantly improve its business performance support the Government and Auckland University on this proposal.

Simply, it is important for New Zealand.

* Andrew Grant is New Zealand principal of McKinsey & Co.