Seventh in a series

LAUSANNE, Switzerland -- The business school and the degree it awards -- masters in business administration -- are an American invention. Europe began establishing business schools in the early postwar decades, in good part in response to what was termed "le defi Americain" (after a best-selling book of the same title by French journalist Jean-Jacques Servan-Schreiber), as did other parts of the world. Outside the United States, however, business schools were somewhat peripheral for several decades, and they did not exist at all in the Soviet bloc.

In the 1990s, globalization -- the opening and interdependence of world markets -- and the information revolution transformed the business landscape. Prior to globalization, business management was a reasonably predictable and prosaic undertaking. This was primarily due to high costs of transportation and communication and the protectionism that prevailed, to greater or lesser degree, in all markets. Business education primarily consisted of teaching participants basic management tools.

The radical shift of the business paradigm in the '90s has resulted in a business-school boom, both in respect to curricular content and numbers, with new schools being established pretty much all over the world but most notably in Central and Eastern Europe as well as in China. In the preglobal era, business students and executives were taught how to become good managers in national markets; today they are coached on how to become leaders in global industries. The changed and highly charged competitive global business environment has had a strong impact on business schools.

For one thing, globalization has consecrated English as the language of international business. When I was teaching at France's European Institute of Business Administration (INSEAD) in the 1980s, French was still required and about one-third of all courses were taught in that language. Now French is no longer required and all courses are taught in English. When I was at the Stockholm School of Economics in the early '90s, classes shifted from being taught in Swedish and English to wholly English. Similar developments occurred globally: For example, English is the sole language of instruction at the outstanding Central European IEDC School of Management, established in Bled, Slovenia, which has students and executives from all parts of Central and Eastern Europe.

Another consequence of globalization on business schools was their recognized need to be as global as possible in all respects. The London Business School, for example, which hitherto had been less international than its major European competitors, adopted a policy of appointing British nationals to new faculty positions only if it could be shown that no non-British candidate with comparable qualifications could be found. As a result, LBS underwent a profound cultural change from a British to a global institution.

All schools have to compete internationally to attract the best possible talent in faculty and leadership positions. The president of IMD, located in Switzerland, is Norwegian; his predecessor was Chilean. The dean of INSEAD is Lebanese; his predecessor was Portuguese. The dean of LBS is American (although her predecessor was British, he spent most of his career in the U.S., and the dean before him was Canadian).

As business education -- both for MBAs and for executives -- has become increasingly important and competitive, business schools have been prominently featured in leading international newspapers and magazines, some of which rank the schools. The most authoritative ranking is published annually by the Financial Times.

Not surprisingly, in its 2001 rankings of the top 100 business schools, the U.S. dominates, though INSEAD, LBS and IMD feature among the 12 strongest. Among the remainder are schools from various countries, including Spain, the Netherlands, Italy, Canada, Australia, Hong Kong and Singapore. There is, however, not a single Japanese school.

Indeed, business education is an egregious example of the general tendency among Japan's leading establishment institutions -- in business, the media, education, etc. -- to buck the trend of globalization.

The leading business school in Japan is Keio Business School. Though it is Japan's top business school, it features nowhere on any international radar. And no doubt the main reason for that is that in the global age, it opted to stay quintessentially Japanese.

Not only is the dean of the Keio Business School Japanese, but so is every member of the faculty. The main language is Japanese and the curriculum is very Japanese. There are foreign exchange programs, but in distinct Japanese fashion. For example, the Keio exchange student who comes to the Stockholm School of Economics (one of its partner schools) will mingle and take classes with all the other students, both foreign and Swedish. At Keio, special courses are set up in English for foreign students who, consequently, are isolated from the mainstream. The "gaijin" ghetto is a notorious feature of Japanese society. The fact that it should subsist in the leading business school of the world's second-biggest economy is distressing; it also goes a good way to explain why the world's second-biggest economy finds itself in such a paltry state.

It is especially cruelly ironic that Keio University should be pursuing such a conservative, myopic and parochial policy. The founder of Keio, Yukichi Fukuzawa, was a truly radical reformer, a pioneering internationalist and one of the most brilliant architects of modern Japan in the early years of the Meiji era.

What the Keio Business School should do is establish English as the sole language of instruction, engage in a massive recruitment drive of international faculty -- aiming, say, for 50 percent of faculty positions to be non-Japanese by 2005 -- and appoint an Indian or a Filipino as dean. This would be an inspired manifestation of globalization; it would be excellent for Keio, excellent for Japan, excellent for the global business school community. It would be in keeping with the ambitious worldly vision of Fukuzawa. It would be a major landmark in bringing Japan into the global era and a spur to the country's revitalization.