By Steven Overly
Monday, September 27, 2010; 18
The economic downturn may have begun in New York with the collapse of major financial institutions such as Lehman Brothers and Bear Stearns, but for the past couple of years, eyes have been fixed on Washington for a solution.
It's a shift that reflects the city's growing influence over corporate America. From billion-dollar bailouts and financial regulation to federal spending and debate over tax cuts, the government's role in industry and importance as a consumer has expanded.
To capitalize on the trend, local business schools have hired faculty, commissioned research centers and designed entire degree programs that specialize in the intersection of Washington and business. Academic leaders said this serves as a natural means of differentiation for the region's universities, which must compete for top students and tuition dollars in a market that's grown crowded with options.
Georgetown University, for example, has filled faculty positions with former Treasury department officials such as Steven Shafran and Phillip Swagel, who played roles in the government response to the financial crisis. They're among a handful of "professors of the practice," who use industry or government experience to teach modern business dynamics rather than academic theory.
"We have to innovate and determine, quite simply, what are those things we think we can do better than anybody else," said George Daly, dean at Georgetown's McDonough School of Business.
The pressure to differentiate from competitors is being felt broadly by business programs, said Dan LeClair, vice president and chief knowledge officer at the American Association to Advance Collegiate Schools of Business, which accredits business programs around the globe.
Schools face competition from foreign universities, online degree programs and the greater number of schools that now offer business as an academic discipline, LeClair said. His organization alone accredits nine business schools within an hour of the District. If you venture another hour outside the city, the number jumps to 14.
"The basis for differentiation can vary. In this case, location matters," he said of Washington. "In other cases, it might be based on a partnership with another unit on campus. It's not just the trend of the day. My sense is this is a longer-term shift, not just a short-term response to the particular administration that has moved into Washington."
Georgetown's business school recently formed a graduate program coupled with the School of Foreign Service. The university snagged Edward Montgomery, Obama's point person on the automobile industry, earlier this summer to head its Public Policy Institute, and Daly said the school is also considering a partnership built around financial regulation policy and business.
"I really feel that that is sort of emblematic of what the future is like," he said. "In other words, how responsive can schools be to what is going on right now, because it's not simply a matter of getting it right or wrong, but it's a question of how quickly you do so."
Across town at American University, a research center on tax policy is slated to open early next year. Richard Durand, dean of the Kogod School of Business, said the center will also house the school's existing Master of Science in Taxation program.
"Every time you get a new president, there are vast changes in tax interpretation, so what we're really finding is the industry is looking for true experts in very specific areas," Durand said. That's now a driving force in program development, he added. "Let's start with the marketplace and figure out how we build these programs that go beyond just business."
George Mason University in Fairfax added an executive MBA program with courses tailored to the national defense sector. The program hopes to pull adult students from the cluster of government contractors that are also located in Northern Virginia. A cybersecurity management program, developed with the schools of public policy and information technology and engineering, could be approved by next summer.
Roy Hinton, a Chicago transplant and associate dean of executive programs, said he did not fully appreciate the business dynamics unique to Washington when he arrived at George Mason five years ago. They've grown more pronounced since then.
"It just seemed that the best practices in business should be easily translated into the federal sector, and in fact those best practices can be valuable there, but there's more," he said. "There is a whole additional set of processes and ways of doing business that are important."
And ultimately, graduates who land in the public sector -- particularly as hiring in many private industries has stagnated -- could find those skills set them apart from other students. Howard University, for example, has seen a renewed interest in a co-op program with federal agencies and government employers are among the most active recruiters.
"The government agencies historically have kind of sat back and hoped that folks would come to them," said Barron Harvey, the business school's dean. "They're starting to be very aggressive now because they know that they have opportunities and they're seeing a significant increase in the number of applicants."