Curriculum

The Business of Cities: NYU Stern’s Urbanization Project Helps Business Students Chart the Future of Cities

Traditionally, business school curriculum has focused heavily on finance, economics, strategy, marketing and other pillars of the corporate world. These jobs are naturally appealing because the employers want to hire the best and the brightest and offer unique opportunities, very competitive salaries, and name brand pedigree. Students graduating with these backgrounds will most likely take jobs in “the city.”

It is very difficult to think about business without thinking about cities.

The city may be a traditional destination for MBAs such as New York City, London, San Francisco, Los Angeles, Shanghai, or Paris. Perhaps, the city may be one of the recently developed business-friendly areas like Abu Dhabi or the Pearl River Delta Zone in China. Regardless, business students are attracted to dense metropolitan areas that offer the perks of mass transit, cultural access, diversity of food, and opportunities that are not available outside of metropolitan areas. 

It is very difficult to think about business without thinking about cities. Some of the most successful entrepreneurial endeavours in recent years, including Uber, Lyft, and AirBnB, to name a few, have developed and grown as a response to issues of infrastructure and housing. However, the average business student does not have the opportunity to have a formal education in the business of cities.

What makes one city successful while another city with the same climate fails?

How do cities develop? What makes one city successful while another city with the same climate fails? These are issues that in the past have been left to urban planners to consider. A Center of Research called The Urbanization Project at New York University’s Stern School of Business has decided to allow business students and economists to share the burden of determining what has made cities succeed in the past and what new cities will need in the future. The Urbanization Project, led by Professor Paul Romer, is an incubator for city and business growth with access to the top minds in urban development and economics.

The average business student does not have the opportunity to have a formal education in the business of cities.

The NYU Stern Urbanization Project estimates that the population of the world will more than double in the next 100 years, with the majority of the people moving to urban centers. The only way to deal with this population boom would be for existing cities to expand or for new cities to be built. The Urbanization Project is comprised of two initiatives. 

One of the two initiatives, known as the Urban Expansion Initiative, helps cities plan ahead for growth. This is led by Solly Angel, a professor at NYU and an expert on urban development who has advised the United Nations, the World Bank, and the Inter-American Development Bank among other organizations. Professor Angel has published a number of books on urban expansion including Planet of Cities and The Atlas of Urban Expansion among others. 

The second initiative is the Charter Cities initiative. This initiative focuses on new cities and creates options for urban world leaders to consider when creating or expanding cities. This initiative is headed up by Professor Romer, Director of the Urbanization Project and Director of NYU’s Marron Institute for Urban Management. Professor Romer, who has taught at Stanford University’s Business School, and the economics departments of UC- Berkeley, the University of Chicago and the University of Rochester, is a world-renowned economist whose Ph.D. thesis concerning economic growth resulting from intentional investment research and development is considered the foundation of the economic principle of endogenous growth theory. Professor Romer’s Charter Cities Project focuses on a developing country turning over responsibility for growth to a host country that would oversee political reform that leads to economic growth.

The Urbanization Project is an incubator for city and business growth with access to the top minds in urban development and economics.

The scholars and staff of the Urbanization Project focus intensely on research and the economics of cities. Their work is published extensively in publications such as City Journal, The Economist, Monocle, Financial Times, and Fast Company. In addition, as part of the NYU Stern community, Urbanization Project staff or visiting scholars, will host frequent brown bag lunches to exchange ideas about city development with NYU’s diverse student body.

Inside the NYU Stern Classroom

In Urban Systems, students are pushed to consider the business aspects of city planning and what makes a city appealing for a business to set up a headquarters.

Professor Romer not only leads the Charter Cities initiative, but also devotes time to teaching one of the most popular courses at NYU’s School of Business, Urban Systems. In this class, students are pushed to consider the business aspects of city planning and what makes a city appealing for a business to set up a headquarters. Topics cover the gamut from taxation, property value, housing costs, city incentives to areas that would be considered in the realm of the urban planner such as arterial roads, shape of blocks, and development. 

Students in the class are not only encouraged to think about the economics of urban living, but also, at the end of the semester, either alone, or in teams, are expected to come up with a paper focusing on a current urbanization problem and determine an economic solution for the problem. One of the papers from the Spring 2014 semester, written by NYU Stern students Craig Johnson, David Baharestani and Laura Fox, resulted in a deal with Mexico City’s Urban Development and Housing Department to create affordable housing. Working with the Urbanization Project’s Alain Bertaud, the students created models to determine how zoning regulation impacts affordable housing in Mexico City. The students’ work resulted in the elimination of regulatory density restrictions

Students focus on a current urbanization problem and determine an economic solution for the problem.

During the Urban Systems course, students read numerous articles that concern shifts in urban density, the effects of concentrated wealth on an area, and recent developments in urban history. One of the most interesting texts discussed in the class was called How New York City Won the Olympics.  This text highlighted visionary proposal by Dan Doctoroff, who at the time was a partner at Oak Hill Capital Partners, a prominent private equity firm and would later become Deputy Mayor under the Bloomberg Administration and then CEO of Bloomberg L.P., to fast track the transformation of New York City from what it was in 1994 to what it is today. 

Source     NYU Wagner

Source NYU Wagner

The NYU business students can learn from the paper just how much their current lives are affected by urban planning that was put into place almost two decades before. For example, the growth in waterfront property in Brooklyn and Queens was part of a business negotiation with the City of New York that resulted in the rezoning of industrial waterfront space, that for years only housed factories, to high rise condos that have a certain amount of space allotted to affordable housing. This not only helps to increase commerce in the outer boroughs where rental is cheaper, but also aids in reducing rent across the board (theoretically). 

Students’ work resulted in a deal with Mexico City’s Urban Development and Housing Department to create affordable housing and the elimination of regulatory density restrictions.
Professor Romer and Police Commissioner Bill Bratton

Professor Romer and Police Commissioner Bill Bratton

Additional readings and topics included the effect of morale on the police force as illustrated in current and former New York police commissioner Bill Bratton’s book Turnaround. Students learned and discussed the effects of eliminating low level crime, the broken windows theory, on general crime. For example, police stationed to eliminate turnstile jumpers resulted in a general decrease in murders and robberies due to the neighborhood’s knowledge that there was a police presence.

The Urbanization Project and the Urban Systems class offer NYU students a unique look into the future of cities as well as a greater understanding of what it will take to be successful in a more crowded world. For more information on the Urbanization Project, follow their blog here

The Rise of the eLab: Top MBA Students Dive Deeper in Innovative Approach to Teaching Entrepreneurship

HEC Paris' eLab:  Every minute counts.  As an integral part of top scientists' business ventures, MBA students experience the same stresses, pressures, tension and time crunches as the entrepreneurs.

HEC Paris' eLab:  Every minute counts.  As an integral part of top scientists' business ventures, MBA students experience the same stresses, pressures, tension and time crunches as the entrepreneurs.

Many students in business school enter with the idea of getting a respectable job at a large company, such as a top consulting firm, a tech firm, or a bank. Most of these students secretly, or not so secretly, harbor dreams of starting their own business in a few years or at least going to work for a small but ambitious start-up. 

Traditionally, Master of Business Administration programs have catered to short term plans of corporate success by equipping students with knowledge, through academic lectures by experts, engaging students to think like businessmen. However, with the tech bubble in the late 1990s and the current tech boom stretching from the later 2000s, more and more students are entering business school with no intention of entering into the corporate world, but instead, jumping out on their own and becoming entrepreneurs right out of business school. 

Entrepreneurship is no easy task. The difficulties in becoming an entrepreneur are discussed not only in business school, but have recently been highlighted in popular culture as well. One of the most popular shows on television, ABC’s Shark Tank, now in its 6th season, features entrepreneurs pitching new ideas to venture capitalists who can choose to take a stake in the company. Time after time, the entrepreneur’s pitch falls short because of a logistical failure on the entrepreneur’s part, presentation problems or lack of business foresight. Many of the most polished presenters on the show are business school graduates from esteemed programs, but even they are not always on point. 

Entrepreneurship Track at HEC

The Entrepreneurship Track was the brainchild of Professor Michel Safars (above) and Bernard Garrette, Dean of the MBA at HEC Paris. Safars saw the opportunity to teach students through hands-on experience, leveraging his ties with   Université Paris Saclay, a research intensive cluster of universities south of Paris combining the talents of Paris’ research facilities, grandes écoles, and universities.

The Entrepreneurship Track was the brainchild of Professor Michel Safars (above) and Bernard Garrette, Dean of the MBA at HEC Paris. Safars saw the opportunity to teach students through hands-on experience, leveraging his ties with Université Paris Saclay, a research intensive cluster of universities south of Paris combining the talents of Paris’ research facilities, grandes écoles, and universities.

A businessperson traditionally gains an education in entrepreneurship through a slow series of successes and failures in the real world and not the classroom. A professor at HEC’s School of Management in Paris, one of the top business schools in Europe (ranked #1 in France), has constructed a novel approach to address this problem and prepare business school students for life as an entrepreneur. A prepared entrepreneur is more likely to be successful if he or she has an idea of what hurdles he or she will face on the way to success. In order to enable future entrepreneurs around the world, Professor Michel Safars, a successful serial entrepreneur who has started several companies in cities including San Francisco, New York, Boston and Paris, implemented a hybrid program that features a core of “learning by doing” coupled with lectures by both academics and current practitioners.

At its inception, the program relied on two pillars, the curriculum and a dedicated workspace for students to develop entrepreneurial ideas. To address the first issue, Professor Safars determined that the study of entrepreneurship was a subject that he wanted to redesign academically. To create the program for HEC Paris, Professor Safars visited the top business schools in the world, traveling to the East and West Coast of the United States as well as Scandinavia and Israel to observe how entrepreneurship was taught in different regions. Already enabled with his years of experience, Professor Safars decided that his program at HEC would be focused on “learning by doing,” where students would not only be educated in the classroom by academics and professionals, but also on the field learning what it takes to build a successful business from the ground up. 

MBA students at work in the eLab.

MBA students at work in the eLab.

Additionally, because of his insight into the importance of technology transfer departments from a role at INRIA, the French Institute for Research and Computer Science and Automation, Professor Safars wanted to ensure a close relationship with the technology transfer departments (TTO) at Université Paris Saclay.  HEC Paris has a distinct advantage of being located in one of the premiere innovation clusters in the world at Université Paris Saclay. Each year, research scientists apply for a competition for funding for applications of their research where they present their ideas. Professor Safars, with Pierre Gohar, the Director of Innovation and Industrial Relation at Université Paris Saclay, molded the entrepreneurship program to work alongside this competition, where the best of the best of the Université Paris Saclay competition are paired with HEC MBA entrepreneurship students to help the scientists understand how to build their business, get funding for their projects and to enable the students to get real life experience. Since the program’s inception, however, the entrepreneurship program associate partnerships has grown – the Fall 2014 institutions included not only scientists from Paris-Saclay, but also a foundation associated with world-renowned cancer doctor Professor David Khayat and Open Compute, an association launched by Facebook, Intel and others to open source the clusters computers design. 

The eLab resembles a modern start-up environment with large chairs for students to confer with each other or to hold meetings.

The eLab resembles a modern start-up environment with large chairs for students to confer with each other or to hold meetings.

After the curriculum was set, Professor Safars needed a “dedicated place to focus on learning by doing.” Thanks to donors led by Pascal Cagni, a Director at Kingfischer Plc and Independent Director at Banque Transatlantique, this space came to fruition late in 2012, in the form of the eLab, which stands for the “Entrepreneurship Laboratory”, a space in the HEC School of Management that acts as a classroom, a workspace, and increasingly, a venue for young entrepreneurs to showcase their works. The eLab is equipped with advanced video conferencing technology, dry erase paint walls that are often covered in students’ ideas and large couches. It has the ethos of a startup company in Silicon Valley or Brooklyn. Throughout the day and weekends, participants in the entrepreneurship program meet at the eLab to work on school projects or to develop their own entrepreneurial ventures. The eLab, although earmarked only for entrepreneurship students, is one of three workspaces called “connectors”, including “Le 503” and “Le PROTO204”, developed in the Université Paris Saclay to foster the nurturing of innovation.

The eLab has a setup conducive to group work, innovation and collaboration, featuring video-conferencing, white board walls, and state of the art interactive technologies for student use.

The eLab has a setup conducive to group work, innovation and collaboration, featuring video-conferencing, white board walls, and state of the art interactive technologies for student use.

With the curriculum and the workspace in place, the Entrepreneurship track was ready to launch with a program that consisted of both traditional business school lectures as well as field learning.

Lectures 

At the beginning of the semester, students take a heavy course load, considered the most intense track at HEC. These courses are meant to prepare students for interaction with the scientists and technology transfer professionals. The core course, Entrepreneurship Backbone, features Professor Safars and other guest speakers who have ascended to the top of the corporate world. They discuss methodologies that have worked in their previous ventures and others that did not. Speakers included French entrepreneurs, investors and a highly successful entrepreneur from the United States that studied under Professor Safars at HEC and has appeared on the cover of the New York Times and Time magazines. A focus of this course is the adaptation of “soft skills,” or personal interaction and discovery of motivation, a skill that most entrepreneurs have to learn through interaction. 

Another unique course that is taught early is Investing in Science and Technology, a course that covers how Venture Capitalists approach new investments and how dilution of a company can take place and leave an entrepreneur with a small return on his initial investment. During this course, several current Venture Capitalists working for both large VC firms as well as in house at top tech firms come in and discuss their strategies and what goes on in their minds when they choose to invest.

The remainder of the courses helps students to learn hard skills that are necessary for entrepreneurship such as intellectual property protection, entrepreneurial finance and technical product development, taught by international professors. 

Real World Experience

What is truly unique about the Entrepreneurship Track is the real life experience of bringing an associate scientists’ idea to market. Early in the semester, students are divided into groups of three based on complementary skills and experiences. Each student takes on the role of the CEO, CFO, or CTO and from the first week of October until mid-December, each student has to work about 20 hours a week on developing the project. Companies in Fall 2014 included personalized cancer diagnostics, smart heart stents, and geolocation technology to name a few. The students’ work involved speaking with the scientists to understand the scope of their vision, observing competitors, reviewing government filings, speaking with attorneys or anything else the students may consider that would improve the project, much like an entrepreneur would do with his or her own project. One of the most important duties that the students had to undertake was to contact potential clients and Venture Capitalists to get them interested in the idea. This required full understanding of the scope of the invention and the competitors in the field. By going out into the field, students can understand what each metric measured in an entrepreneurial venture actually means, whether it be supply, operations, competition or barriers to entry.

Incentive

What makes this learning by doing even more unique is that the students have a potential incentive available at the end of the program. Professor Safars requires that each of the institutional participants consider that if the students produce a good work product at the end of the program, the company must be willing to allocate some shares in the company to students that would be interested in continuing to work for the company.

The Fall 2014 class successfully presented to a panel of Venture Capitalists, journalists, academics, entrepreneurs and scientists.

The Fall 2014 class successfully presented to a panel of Venture Capitalists, journalists, academics, entrepreneurs and scientists.

At the end of two and a half grueling months of research, phone calls and interviews, the students conclude their entrepreneurial education by giving a presentation on their new company to a panel of  CEOs, executives, Venture Capitalists, journalists, scientists and academics acting as potential investors in an HEC auditorium. The acting CEO of the team gives the one minute elevator pitch followed by a concise 10 minute PowerPoint presentation detailing the aspirations of the company, the growth potential, present and future competitors and most importantly, why this company would be a good investment. 

The judges in attendance, including Head of M&A of a $15 billion company and Venture Capitalist who flew in from New York City, one of the directors of the largest private wealth management companies in France, and a former Pfizer executive, observed the seven teams give presentations this past December 2014. As a testament to the education and the hard work they put in, no team exceeded their time limit or went under by more than 30 seconds. After the presentations, the panel of judges was given the opportunity to cross-examine the students to determine the depth of their understanding. At the finish of the presentations, one judge commented that the presentations were of a higher quality than presentations he had seen at a renowned worldwide entrepreneurship competition. The teams prepared full business plans, Go To Market direct strategies and business models to propose to the entrepreneurs.

This type of hybrid lecture and learning by doing looks to be the forefront of a new age of MBA education. It combines the necessary academic learning with skills that the students would not even get through high level internships. The emergence of this type of education bodes well for the future of entrepreneurship.