How an MBA can empower entrepreneurs

A new INSEAD survey reveals that an MBA can help ensure entrepreneurial success

FONTAINEBLEAU,France and SINGAPORE and SAN FRANCISCO,Sept. 17,2024 --Many leading entrepreneurs have questioned the value of investing in an MBA if you want to run a successful start-up. But a recent survey conducted with members of the INSEAD community shows that going to business school can help ensure that any entrepreneurial scheme has a better chance of achieving greater impact and long-term success.

According to the INSEAD Alumni Entrepreneurship Report 2024,73 percent of the INSEAD students and graduates surveyed embarked on entrepreneurial activities following their time at the global business school. More than 17 percent of INSEAD alumni ventures are large-scale organisations employing over 100 people. When INSEAD alumni take over existing firms,they achieve immediate results,with 30 percent achieving first-year growth of at least 11 percent.

Rather than stifle enterprising spirit,the report suggests that an MBA education inspires individuals to more actively pursue entrepreneurship. Respondents reported that 86 percent of their new ventures and 75 percent of corporate entrepreneurship efforts were initiated during or after their education at INSEAD. Additionally,two-thirds of INSEAD alumni have explored more than one venture,with each graduate founding an average of 3.5 ventures.

It is not only budding founders who recognise the value of an MBA – many experienced entrepreneurs see the need for additional tools and knowledge. Indeed,43 percent of recent INSEAD graduates were already entrepreneurs before enrolling in the business school. This means they had prior experience of the challenges start-ups face and believed that an MBA education would enhance their skills,capabilities and knowledge to tackle these more effectively.

Professor Henrich Greve,Academic Director of the Rudolf and Valerie Maag INSEAD Centre for Entrepreneurship,said,"Our survey shows that INSEAD alumni are accomplished entrepreneurs across the board. They are forming new ventures and improving old ones. Through that,they're creating growth,value and added employment both in their own ventures and in family businesses and traditional corporations."

The survey revealed other salient insights,including a growing trend among recent INSEAD graduates of incorporating social missions into new ventures. A total of 33 percent of new ventures founded 1 to 15 years ago have a social mission,with an increasing focus on fields such as sustainability and healthcare. This compares to just 15 percent for such firms founded over 30 years ago. Although profit remains the core objective for most,this shift towards social entrepreneurship is significant.

Additionally,a quarter of respondents had engaged in business acquisitions,with most of these typically occurring post-graduation. Of these acquisitions,nearly half experienced revenue growth of 11 percent or greater in their first year of operation,while 80 percent are still active today,indicating a high success rate.

"These results really underscore the value of a business education in helping prepare entrepreneurs for the challenges and opportunities that they must face in today's volatile world," said Francisco Veloso,Dean of INSEAD. "Here at INSEAD,we believe it is our role to provide our students with the tools,instruments,understanding and knowledge needed to make that positive difference in society."

Access the INSEAD Alumni Entrepreneurship Report 2024and find out more in this INSEAD Knowledge article.