PHDs or MBAs: What should be our immediate focus?

During our academic epoch we have always been discussing the prospects and benefits of PHDs vs MBAs in terms of career progression and overall value to the society. These discussions used to carry on for hours with out any firm conclusion as both parties had for or against arguments to their support.

Yesterday, I came across an article in Economists which discussed the same topic and argued the importance of having quality MBAs as an essential need of the era. I would like to elaborate upon this argument in context of Pakistani education system and Pakistani society.
It is very important to clearly understand the meaning of “Skilled Labor” and “Manger”. Let me emphasize on the argument that majority of people in our society do NOT exactly understand or misinterpret this term.

“Manager” means someone who can optimize the allocation of resources efficiently in order to maximize value. By value we mean monetary returns, benefits and prosperity to organizations weather it’s a company or a country. This concept applies at both micro and macro level.
“Skilled Labor” in economic terms means someone who is highly focused and devoted to their particular subject and have the capability and knowledge to innovate goods and services by employing scientific methods and research.

The comparison between MBAs and PHDs boils down to evaluation between “Innovation” and “optimization”. PHDs innovate while MBAs optimize. In a Pakistani context we have to be extremely careful in order to determine which one is more important to us in these times when we are classified as one of the developing countries. Do we need innovation of goods and services? Or do we need to efficiently utilize our already existing resources in order to maximize value. I would definitely prefer the later. Let me state a few examples:
Computers were not invented by IBM. Windows were not invented by Bill Gates. Photocopy machines were not invented by Xerox. Mobiles were not invented by NOKIA and search engines were not invented by Google.

All of the above mentioned companies have acquired the innovation and created a value by appropriately allocating their resources towards marketing and value added customer services.
Again referring to the economist article “a gathering storm” dated Nov 20th 2008 which states that “Even if China spends a fortune to train more scientists, it cannot prevent America from capitalizing on their inventions with better business models”

My whole argument refers to the Government scholarships mostly being awarded to PHD students instead to the MBA students. Most of the scholarships require the recipients to return to the country immediately after completion of their respective degree programs. Currently there are approximately 700 to 800 students studying abroad under various scholarship programs. More than 90% of these students are enrolled in specialized fields for Masters and PHD degrees.

I have been to a few conferences and seminars regarding educational reforms in Pakistan and I have always felt strongly that there has been a lot of emphasis on producing quality scientists and engineers. Almost all the participants highlighted the importance of PHD programs and proudly referred to hundreds of students currently enrolled in the Doctorate programs in US and UK.

The point we all are missing is that by producing hundreds of PHDs in next four to five years is not what will bring the change instead it is the need of the hour to develop effective and efficient managers in order to create value added business models. Our problem is inefficiency and lack of management and not lack of innovation. Let’s assume that in next five years these Scientists and Doctors return back to Pakistan under the scholarship agreement. Is our infrastructure capable of absorbing these highly qualified graduates? Will they be provided with enough facilities to apply their knowledge and “innovate”. Are there enough R&D funds available to carry out research activities?

The answer to all of the above questions is “No”.

Why?

The reason is that, in Pakistan, we are still in the evolutionary phase of developing corporate culture, introducing professional management and formulating global strategies in our organizations. None of our companies are Global and none of our brands have developed worth mentioning reputation globally.

We need good managers who have the vision of taking our businesses to the next level and this can only be done by developing effective business models, efficient utilization of available resources and creating value. Once we achieve our immediate objectives of efficient businesses, global corporations and well acknowledged brands then will be the time to probably innovate and move to another level with the help of PHDs. Since then appropriate platform will be set for researchers and adequate facilities will be available for scientist to innovate.

Right now our immediate focus should be to make available maximum funding for MBA programs, under various scholarship schemes, instead of Doctorate programs. The dilemma is that none of us is realizing that what is the need of the hour and what is actually required in terms of higher education. We continue to build policies on an already assumed false premise that we need quality scientists and engineers for our economy to prosper.

I am not saying that we should stop funding PHD programs instead the current mix of 9:1 for PHD and MBA should be equalized if not reversed immediately. We are investing billions of rupees to create an asset which may not add significant value due to unavailability of appropriate resources. The sooner we realize this the better it is.

I am also NOT saying that “Managers” are by any means superior to “Skilled Labor” instead I am saying that rite now we should be focused on producing more managers instead of scientists and researchers because this is the most appropriate channel to invest billions of tax payers money in order to churn out maximum value in short to medium term.