MIT Sloan School of Management is known for its entrepreneurial ecosystem and spirit of innovation, and those qualities are now being deployed to help small businesses in China overcome critical challenges.
“The entrepreneurs we work with [in China] are as brilliant and driven as any we find in the world, yet they face obstacles to success,” says John C. Grant, senior lecturer in global economics and management at MIT Sloan.
So, for a seventh spring, MBA students are spending a week working on-site at Chinese firms to help them tackle business issues like market entry, commercialisation, financing, and finding overseas partners. Students engage with and advise the firms between January and March from their US campus in Massachusetts and then visit in late March to implement their proposed solutions.
The action-packed week is part of the “China Lab”, a practical component of a course which compares the economies of China and India. It was introduced in 2008 and, since then, has grown in terms of student participation, the number of projects at Chinese firms, and partnerships with Chinese business schools. Of the mainland firms involved, 75 per cent are small- to medium-sized enterprises (SMEs). They represent diverse sectors, ranging from credit lending to furniture, e-commerce technology and organic vegetables. Most are selected by the Chinese business schools, whose own MBA students collaborate as a team with those from MIT Sloan.
MIT Sloan School of Management students visit a local enterprise.
The firms pay nothing to participate, though some may cover flights and basic costs for the week students are with them.
“We prefer companies where the leadership team is intimately involved in the business and are committed to building a lasting organisation,” Grant says.
He notes that these firms are typically of a size where they must address important issues relating to strategy, growth and management structure, so the students have a chance to add real value. Also included, though, are China-based operating units of overseas multinationals, NGOs, and social enterprises.
Over the years, Grant has observed the potential of mainland businesses and the constraints they face. In particular, limited access to risk capital and a business system which favours incumbents have slowed development.
“[There is] an immature entrepreneurial ecosystem between academia and industry that has yet to create innovation clusters such as Silicon Valley and Boston in the US, and resistance in the community to risk-taking among the younger generation,” Grant says.
The students also try out local cusine.
At MIT Sloan, the China Lab is a highly popular course. Students can’t simply enrol; they have to bid for it. At the beginning of the year, they are given 1,000 points to bid for popular courses and the minimum for acceptance for the China Lab is 850.
“This system gives students the opportunity to pursue the courses they believe best fit their interests, through a competitive process,” Grant says.
The five business schools in China partnering with MIT Sloan are Shanghai Advanced Institute of Finance and Fudan University School of Management; Lingnan College at Sun Yat-sen University in Guangzhou; Tsinghua University School of Economics and Management in Beijing; and Yunnan University School of Business and Tourism Management in Kunming.
MIT Sloan offers a similar programme with about five projects per year in India. The school has built a track record in action learning programmes and its course on global entrepreneurship in emerging economies, known as G-Lab, allows 160 students a year to work on 40 projects in more than 20 emerging economies.