Should You Get An MBA In The Age Of AI?

Administration / 23 Aug, 2023

Those who went to sleep on the evening of the 30th of November, 2022, didn’t just wake up to a new day. They woke up to a new age. ChatGPT, the innocuous “research preview” of the chat interface of GPT-3.5 launched by OpenAI turned out to be more than just research, and way more than just a preview. It changed computing, business, and life, forever. There’s no going back. The age of AI is upon us, and like sleeping beachgoers caught in a forever tsunami, we have no option but to swim, and swim well, like it or not.

As an aspiring applicant, you have more to worry about than just AI, though. You also have the MBA, and the question of whether you should at all be pursuing one now. “Digital Business,” after all, is no longer just an item on the MBA menu. It’s the entire menu itself. So, how much has AI changed the MBA experience already, and will it make the MBA less or more relevant as AI evolves to even more advanced stages?

As an MBA graduate and then MBA admissions consultant with years of experience, I’ve witnessed firsthand the evolution of business education in response to technological advancements. As AI continues to disrupt and reshape the business landscape, prospective MBA students are left wondering if pursuing an MBA is still a wise investment. In this article, I’ll share my insights on whether an MBA is worth pursuing in the AI era and the factors to consider when making this important decision.

A change in the teaching, learning, and skills paradigm

AI reduces the value placed on knowledge and enhances that placed on skill. It is transforming traditional MBA disciplines such as finance, marketing, and supply chain management. Algorithmic trading, AI-driven marketing campaigns, and AI-powered supply chain optimization are just a few examples of how AI is revolutionizing these fields. Pursuing an MBA in the age of AI means not only learning the fundamentals of these disciplines but also understanding how to harness AI’s potential to drive business growth and efficiency. Do traditional methods of calculating free cash flows or cost of capital, for example, matter when AI can do it faster and more accurately? Remembering facts or even concepts that can be summoned at the speed of thought from an AI-powered assistant is no longer a competitive advantage.

Instead, the focus in MBA programs is shifting towards developing skills like critical thinking, problem-solving, creativity, and adaptability – abilities that AI cannot easily replicate yet. These soft skills, combined with a strong foundation in business principles and AI technology, will enable graduates to make informed decisions and effectively manage the challenges that arise in an AI-driven business landscape. And yet, it’s not about outcompeting the AI, but running with it.

This means that while the ability to create a business plan or a financial model at the snap of a finger or a button isn’t all it was perceived to be just a few months ago, the ability to understand the underlying business paradigms is still important. While AI will evolve and it will acquire ever more advanced capabilities even in the near future, humans will, at least in the foreseeable future, be the final decision- makers on key business decisions.

In the age of AI, MBA students should be expected to be more than just proficient in traditional business disciplines. They must also be able to work alongside AI systems, interpret their outputs, and use their insights to make strategic decisions. This involves understanding the limitations and ethical considerations associated with AI and being able to harness its power while mitigating potential risks. Recent changes in AI have happened so rapidly (or rather, come into the public limelight so suddenly because of ChatGPT) that most MBA classrooms have yet to adapt. Students we spoke to across M7 and in fact T15 campuses are using AI more as a study assistant, or “co-pilot” if you will, to keep up with industry terminology, than to really crunch through assignments, but it’s only a matter of time before the “sage-on-the-stage” teaching model transitions more to a “guide-on-the-side” one. This might mean that MBA programs become shorter, as AI reduces both the need to delve into more courses as well as the time required to master those courses themselves.

Evaluating the ROI of the MBA in the age of AI

MBA programs are adapting to the AI-driven landscape by integrating AI courses and teaching assistance into their curriculums. This ensures that graduates are well-equipped to navigate the new business environment, where AI is increasingly becoming a critical component of strategic decision-making. By providing students with the necessary skills and knowledge to succeed in the AI era, MBA programs can help increase the ROI of the degree.

AI reduces the value placed on knowledge and enhances that placed on skill. It is transforming traditional MBA disciplines such as finance, marketing, and supply chain management. Algorithmic trading, AI-driven marketing campaigns, and AI-powered supply chain optimization are just a few examples of how AI is revolutionizing these fields. Pursuing an MBA in the age of AI means not only learning the fundamentals of these disciplines but also understanding how to harness AI’s potential to drive business growth and efficiency. Do traditional methods of calculating free cash flows or cost of capital, for example, matter when AI can do it faster and more accurately? Remembering facts or even concepts that can be summoned at the speed of thought from an AI-powered assistant is no longer a competitive advantage.

Instead, the focus in MBA programs is shifting towards developing skills like critical thinking, problem-solving, creativity, and adaptability – abilities that AI cannot easily replicate yet. These soft skills, combined with a strong foundation in business principles and AI technology, will enable graduates to make informed decisions and effectively manage the challenges that arise in an AI-driven business landscape. And yet, it’s not about outcompeting the AI, but running with it.

This means that while the ability to create a business plan or a financial model at the snap of a finger or a button isn’t all it was perceived to be just a few months ago, the ability to understand the underlying business paradigms is still important. While AI will evolve and it will acquire ever more advanced capabilities even in the near future, humans will, at least in the foreseeable future, be the final decision- makers on key business decisions.

In the age of AI, MBA students should be expected to be more than just proficient in traditional business disciplines. They must also be able to work alongside AI systems, interpret their outputs, and use their insights to make strategic decisions. This involves understanding the limitations and ethical considerations associated with AI and being able to harness its power while mitigating potential risks. Recent changes in AI have happened so rapidly (or rather, come into the public limelight so suddenly because of ChatGPT) that most MBA classrooms have yet to adapt. Students we spoke to across M7 and in fact T15 campuses are using AI more as a study assistant, or “co-pilot” if you will, to keep up with industry terminology, than to really crunch through assignments, but it’s only a matter of time before the “sage-on-the-stage” teaching model transitions more to a “guide-on-the-side” one. This might mean that MBA programs become shorter, as AI reduces both the need to delve into more courses as well as the time required to master those courses themselves.

Evaluating the ROI of the MBA in the age of AI

MBA programs are adapting to the AI-driven landscape by integrating AI courses and teaching assistance into their curriculums. This ensures that graduates are well-equipped to navigate the new business environment, where AI is increasingly becoming a critical component of strategic decision-making. By providing students with the necessary skills and knowledge to succeed in the AI era, MBA programs can help increase the ROI of the degree.

One of the primary factors to consider when assessing the ROI of an MBA is the cost of tuition. MBA programs can be expensive, and the increasing tuition fees have led many to question whether the investment is justified. Additionally, the opportunity cost of pursuing an MBA – the income and experience lost while attending the program – should be taken into account. Balancing these costs against the potential benefits of an MBA is essential for making an informed decision.

An important aspect of the ROI calculation for an MBA in the AI era is the potential for career growth and increased earning potential. As AI continues to disrupt industries and create new opportunities, demand for professionals with both business acumen and AI expertise will be on the rise. Pursuing an MBA can help graduates develop the hybrid skill set necessary to capitalize on these opportunities, potentially leading to higher salaries and faster career progression.

When considering the ROI of an MBA in the AI era, it’s essential to evaluate alternative educational paths. Specialized master’s programs, boot camps, and online courses offer opportunities to develop AI and business skills, often at a lower cost than a traditional MBA. While these alternatives may not provide the same level of prestige or networking opportunities as an MBA, they can still offer a high ROI for those seeking to develop the skills necessary to succeed in the AI-driven business world. MBA programs offer unparalleled networking opportunities, connecting students with future business leaders, industry experts, and AI specialists. These connections can lead to new job opportunities, collaborations, and partnerships, further enhancing the ROI of the degree. In the age of AI, these relationships can be invaluable in staying ahead of the curve and navigating the ever-changing business landscape.

While there are many ROI assessments that exist, including a recent one developed by Georgia Tech, these are past-facing, and the value delivered by MBA programs itself is going to change. ROI must therefore be evaluated afresh, and on an ongoing basis.

What does that mean for lower-ranked, less prestigious MBA programs? They will inevitably suffer the pangs of the paradigm shift, and a consolidation in the MBA market may well occur, with some lower-ranked programs closing or pivoting to a different structure.

Does a top MBA brand still matter?

One of the most significant advantages of obtaining an MBA from a top-tier institution is the prestige associated with the degree. A premium MBA is often seen as a stamp of credibility and can open doors to networking opportunities with fellow students, alumni, and faculty. These connections can prove invaluable for career advancement and collaboration in the age of AI.

Premium MBA programs are known for their ability to adapt to industry demands and trends quickly. As AI continues to revolutionize various sectors, top-tier institutions are likely to incorporate relevant AI courses, tools, and technologies into their curriculums. This adaptability ensures that graduates of these programs are well-equipped to tackle the challenges and opportunities presented by AI in their respective fields. For example, Wharton received a $5 million grant in mid-2020 to enhance its offerings and courses focused on AI in Business. It remains to be seen how top schools will integrate AI, though as of now, they have a research, faculty, resources, and brand advantage in doing so.

Don’t just get a job, get a career (every few years)

As AI continues to disrupt the job market, professionals with a hybrid skill set are in high demand. Employers are seeking individuals who can bridge the gap between traditional business roles and AI-driven functions, understanding both the technical aspects of AI and the broader implications for their industry.

Developing this unique combination of skills can help professionals stand out in a competitive job market, increasing their chances of progressing in their careers.

In the fast-paced world of AI, the ability to innovate and adapt to new technologies is crucial for long-term success. Professionals who can combine business acumen with AI knowledge are better positioned to identify emerging trends, spot opportunities, and develop innovative solutions to tackle challenges. This adaptability is essential for staying ahead of the curve and maintaining a competitive edge in an ever-changing business environment.

Even this adaptability will need to be paired with unlearning and re-learning every few years (less?) as AI evolves even further. It will give rise to new business models and paradigms, necessitating short-term courses and programs that professionals can learn from. The age of a job for life or even a linear career graph is gone. Bootcamps, online programs, and short- term reskilling initiatives will become an inevitable part of everyone’s career, including that of MBA graduates. Some of these will also substitute for the MBA, as professionals evaluate the tuition cost ($150K+ in most programs now), opportunity cost, and the risk of quitting their roles for a one- or two-year MBA sojourn, only to return to an industry that will have evolved. Business schools know this too, and INSEAD has recently launched an app that would present videos, discussions, and networking opportunities for students and professionals to stay connected and keep learning.

Not just the MBA, even industries are changing rapidly

Tech and consulting used to be among the biggest employers for top MBA talent, and they still are, but the recent combination of high inflation, economic slowdowns, and past overhiring has led to a glut. Tech layoffs have been in the news for over a year now, and top consulting firms are consistently pushing back joining dates. While this is not happening (yet) because of the impact of AI, the very nature of work within these industries is set to change significantly. As consulting firms blend human advisory models with assistance from AI LLMs, and Big Tech turns to automated development, the low hiring trend may become more of the norm. Careers in finance and in financial services too will be transformed, as the more rules-based information industries are more vulnerable to complete automation of entire roles through AI.

This paradigm shift, combined with the economic stress in these sectors already, is creating a difficult MBA employment market currently.

With the advent of AI, though, new roles, companies, and possibly industries will come up as well. Remember, there were no roles in digital marketing in the 1990s, and tech product management took off as a popular role only in the 2010s. While AI will inevitably change certain professions, requiring fewer people, it will also open up opportunities in newer roles. Those who grab them will be the ones who have both the business knowhow and the AI acumen.

Conclusion: An MBA is relevant, for now, but you can’t coast with it any longer

Top-tier MBA programs continue to have their place, but applicants are likely to become more discerning in their choice of MBA programs in the age of AI. The programs themselves are going to favor shorter durations, curricular changes favoring AI, and possibly hybrid delivery, along with continued educational offerings into the future well after graduation. Expect part-time and online MBA programs to gain more popularity, and to see a new class of business executive who partners with AI to deliver outcomes that entire teams couldn’t do just a few years ago.