One of the enduring problems facing SA is high unemployment, which is often blamed for some of the social ills in our society. Linked to this is the skills gap – the disparity between the skills available in the market and those sought by businesses. While this is also a global challenge, the problem is acute in SA. The reality for many graduates is that the skills gap is significant at management and executive level, where employers compete to attract top talent and where graduates compete with each other.

In this competitive job market, graduates often look to an MBA as a way to differentiate themselves. In recent years, however, the relevance of MBA programmes has been questioned, particularly by employers. The first MBA degree was founded at Harvard Business School in 1908, and though it has evolved since then, many MBA programmes still rely on traditional curricula and assessments that have not kept pace with the rapid changes to the world of work the fourth industrial revolution (4IR) heralded.

The 4IR has increased the scope and pace of digital transformation within organisations, and it fundamentally changed the nature of work. This includes jobs, the role of business leaders and the type of employee businesses want to recruit. Companies are increasingly demanding MBA graduates who can apply their knowledge to real-world problems, using critical thinking and analysis, complex problem-solving, active learning strategies and self-management.

The World Economic Forum (WEF), in its publication “The Future of Jobs Report 2020, says these skills are critically important in the 4IR. The report forecasts that by 2025, 85-million current jobs may be lost and 95-million new ones created to adapt to the new division of labour between people, machines and algorithms.

Another study suggests that employees in the future world of work will need foundational skills and attitudes that help them “add value beyond what can be done by automated systems and intelligent machines, operate in a digital environment and continually adapt to new ways of working and new occupations”.

This means the nature of the MBA degree needs to change to equip graduates with the skills to apply their knowledge practically within a complex and changing 4IR business landscape. But how can this be achieved?

The 4IR and digital transformation are not just about technology. They extend to every aspect of business – from strategy and marketing to operations and human resources. Technology is increasingly embedded within all these functions, moving well beyond its traditional supporting role. What is also evident is that the “digital” in “digital transformation” may soon be redundant, given that almost any significant business transformation is likely to employ, require, or be influenced by digital technologies.

MBA programmes need to adapt to these changes. From a business school perspective, the importance of experiential learning in providing MBA students with the tools and knowledge to apply what they have learnt is critical. The Council on Higher Education (CHE) changed the requirements for MBA programmes in 2016, allowing the research component of the course to move beyond a traditional dissertation. That change provides the latitude needed for MBA programmes to adapt and shift toward a focus that better prepares students for the future world of work.

The revised CHE requirements indicate that a professional master’s degree like the MBA must include an independent study component that comprises at least a quarter of the credits for the degree, consisting of either a single research or technical project or a series of smaller projects demonstrating innovation or professional expertise.

Final-year assignments – known as capstone projects – offer the ideal opportunity for students to demonstrate innovation and professional expertise to meet those requirements. These assignments typically involve students tackling a real-world business problem and offering recommendations to a company on how to solve it. This provides a valuable tool to prepare MBA graduates for the way the 4IR and digital transformation affect businesses and the key problems those businesses are trying to solve.

A capstone project challenges students in a way that allows them to hone the skills identified by the WEF as critical in the new world of work, while applying and integrating the knowledge they have gained throughout their MBA. It can also serve as a useful signal to prospective employers regarding the ability of an MBA graduate to apply their knowledge in a business setting.

By allowing students the leeway to demonstrate innovation and professional expertise as part of their MBA journey, a capstone project fundamentally changes the nature of an MBA programme. Students gain valuable experience as they deal with the complexity and ambiguity of real-world problems and decision-making – particularly relevant in a post-Covid, 4IR world. As a result, these projects are used by many top universities and business schools globally, ensuring graduates have the ability to convert theory into practice.

It is clear that business schools, MBA programmes and their students need to adapt and change for the future of work – which, by the way, is already here. A capstone project is a valuable stepping stone on the journey toward that goal. The alternative is not just inertia and irrelevance, but also skills that do not align with the rapidly evolving business landscape. To quote philosopher Lao Tzu, “if you do not change direction, you might end up where you are heading”.

Moodaley is a senior lecturer at the Johannesburg Business School, University of Johannesburg.