Despite how hard Russia has been hit by the economic crisis, Moscow's new Skolkovo School of Management will open its doors in September
The middle of an economic downturn may not seem the best time to launch the most ambitious new management education project anywhere in Russia. But Wilfried Vanhonacker, dean of Moscow's Skolkovo School of Management, shows little sign of being fazed by the economic crisis. "This is the kind of environment we would enjoy, because that's what we want to prepare people for," he says. "If anything, there is stronger commitment now. If anything, if you look at the crisis in Russia now, it clearly shows the need for real management skills."
Russia has been hit hard by the crisis, which has created financial difficulties for some of the wealthy Russian businessmen who are backing Skolkovo. Yet Vanhonacker's optimism cannot easily be dismissed as empty bravado. Despite some setbacks, Russia's newest business school is forging ahead with its $500 million project to create a world-class center of management education in Moscow. And it has gained some important votes of confidence in recent months—from financial backers, international partners, and potential students.
It's still early days, to be sure. A flashy new campus just outside Moscow is still under construction. Delays caused by the financial crisis mean the campus won't quite be ready by September, when Skolkovo opens its doors to the first batch of full-time MBA students (the campus should be open by next year). Meanwhile, corporate cutbacks mean that Skolkovo's Executive MBA program, launched in January, has been scaled back to 25 places, around half the number originally anticipated.
But these birth pains look comparatively minor against the background of other, more positive developments. Skolkovo received a welcome shot in the arm last October, when Sberbank (SBER.RTS), Russia's state-owned savings bank, advanced a $245 million 10-year loan that will finance completion of the campus. Meanwhile Rosnanotech, a Russian government agency that promotes nanotechnology research, has put up $50 million, half the money Skolkovo needs for a planned $100 million venture fund accessible to students. The European Bank for Reconstruction & Development looks set to pump in an additional $25 million into the fund, says Vanhonacker. "Not every company has money to spend left and right, but when they see an interesting new project, they're willing to go with it. We're benefiting from having done our homework."
A Partnership with MIT
No less important than finance is the recognition that Skolkovo has recently received from a heavyweight U.S. business school. On Feb. 2, Skolkovo and MIT's Sloan School of Management announced they were forming an international partnership. The agreement means the two schools will cooperate on research, and exchange faculty and students. In particular, Sloan is keen for Skolkovo to devise a teaching program for its management students about doing business in Russia.
In an Internet video presentation about the partnership, David Schmittlein, the dean of Sloan, explained that Skolkovo was an attractive partner because of the two principles on which it was founded. One was Skolkovo's focus on the emerging markets of Russia, India, and China. The second is Skolkovo's use of project-based learning, an area that Sloan helped pioneer. From the beginning, Skolkovo has played down the role of traditional classroom teaching, instead emphasizing hands-on fieldwork, part of which will take place abroad. "MIT believing in us gives us a lot of visibility and credibility," says Vanhonacker.
Of course, the real test of Skolkovo's credibility won't come until September, when the school admits its first full-time students. But Vanhonacker says that the recruitment process is going well. So far there are just over 70 applicants for the 45 places planned for the first batch of students—a respectable number given Skolkovo's youth and the €50,000 ($65,000) price tag for the 16-month course.
International Student Body
He's especially encouraged by the fact that Skolkovo has managed to attract applicants from all over the world, including Japan and North America, as well as the priority markets of India and China. Indeed, only about half of the current applicants are from Russia, though the number of home students is expected to pick up as the recruitment season in Russia gets underway. (Skolkovo's stated aim is to recruit around one-third of students from outside the former Soviet Union.) Instruction will be in English.
Vanhonacker reckons the school's recruitment drive has been helped by innovative marketing and application techniques, aimed to appeal to what he calls "the YouTube generation." For instance, instead of essays, applicants have to submit three videos of themselves—often with highly interesting results. The school has played down the role of traditional recruitment fairs, in favor of targeted Internet-based marketing and initiatives such as the Skolkovo Challenge, a competition for entrepreneurial ideas that was launched in January.
He also notes that economic downturns aren't necessarily bad for management schools, because businesspeople often use them as an opportunity to take time out for education.
But the economic crisis will affect the types of education and careers that students aim for. With traditional areas such as investment banking and consulting feeling the economic freeze in the West, he argues that interest is bound to grow in alternative managerial careers in exotic new markets such as Russia. "Financial sector careers have pretty much dried up for a while, so you can say that in general there is more interest in entrepreneurial creativity," says Vanhonacker. "Although we didn't design the crisis, in some ways we will reap some benefit from the kind of program we are."