Maybe AI Isn’t a Threat to MBAs

Is AI’s threat to MBA feeder industries being overplayed? Andrew Hill’s article, “AI isn’t destroying entry-level jobs. It’s changing them” in the July 16 Financial Times made exactly that case. Hill notes that in AI’s early days “many [professional services] companies decided to pause entry-level recruitment” when they saw “generative AI slice through the basic repetitive work traditionally assigned to junior employees.” But that has changed as companies “have realised that young staff can … bring native AI fluency to the job.”

One data point demonstrating this: an April National Association of Colleges and Employers survey showing that “US companies expected to hire 5.6 per cent more new college graduates this year” versus flat hiring last year.  Hill notes that “the heaviest [corporate] adopters [of AI — such as software and media companies] “are also hiring more entry-level employees.” Why? Because they seek skills that MBAs also provide: “critical thinking and professional judgment,”  not only “technical abilities.” Hill: “Candidates for starter roles in the most AI-exposed industries are now expected to show a mastery of the skills traditionally demanded of more seasoned staff, such as data-driven decision-making and people management.”

Hill quotes Ravi Kumar, CEO of Cognizant, as saying that this AI-transformation may force middle managers “to become ‘player-coaches'” who help junior/entry-level employees deliver the higher-value work that AI tools now make possible. He quotes the CEO of Luminance as seeing a similar opportunity for non-entry-level employees (e.g., potentially MBAs): “more seniors [are] staying in the business because [by using AI], they can be more productive and have more capacity”.

The point is that as AI changes what companies demand from entry-level employees, it also opens opportunities for older, more senior employees, again potentially MBAs. Hill: “Reliance on AI is increasing the demand for distinctively human ‘soft skills’ — or ‘power skills”, as some are now calling them — such as creativity, empathy, judgment and networking ability. PwC’s jobs report found that new tasks added to job adverts for AI-exposed roles were two and a half times as likely to call for such capabilities.”  These soft skills are what business schools prize in applicants and claim to promote through their MBAs. As AI plays an ever growing role in day-to-day business, the consequences of AI-induced error grows. Thus, the “need for critical thinking” also grows. Because, with AI’s help, “everybody can code,” the softer, judgment- and communication driven skills matter even more. “You can have the best proposal using AI [but] if you can’t get it across in a conversation, it’s a problem,” Hill quotes one professional as saying.

As always, business schools’ challenge is to continually ensure that they are providing the skills they say they instill in their graduates. Hill notes that “Some 78 per cent of higher education leaders think their graduates meet employer expectations, according to a recent survey by education company Pearson and Amazon Web Services. But more than half of employers polled said they still struggled to find AI-ready graduates.”