Elite European Business School Breaks Ground

In a hall covered in the socialist frescoes of the former East German regime, the crème de la crème of Germany's business gathered to celebrate the founding of a school which will train the next generation of capitalists.

At a gathering as a grand as their expectations, the future president and board members of European School of Management and Technology announced the official grounding of the school they plan to number among the world’s elite.

In the banquet hall of the former DDR capitol building, the presence of names like German President Johannes Rau, Allianz Board Chairman Henning Schulte-Noelle and Berlin Mayor Klaus Wowereit underscored how serious politics and big business are about the newest and controversial German business school venture.

“Our aspirations are high,” Gerhard Cromme, coordinator of the 25-company initiative that founded the school told the dark-suited crowd. “We want the school to be able to measure itself successfully against the best schools in Europe as soon as possible.”

High hopes in stopping the brain drain

Within 10 years time, the school, located in both Berlin and Munich, expects to have a top-level faculty of 60 and a yearly attendance of around 4,000. The founders expect student fees, ranging from 1,000 to 8,000 euro a week, to cover the running costs of the university.

An endowment fund currently at 90 million euro, but expected to reach 100 million euro in a few months, will fund research centers the institute plans to establish around Europe.

The grounding of the school comes at a time when Europe's biggest companies are desperate to stop the "brain drain" of managerial talent to schools in Great Britain and the United States, said Henning Schulte-Noelle, chairman of the board of management at insurer Allianz AG.

“The biggest European economy still does not have a single business school able to old its own among Europe’s best,” said Schulte-Noelle. Especially in Germany, he added, “promising young managerial talents, after having gained their first degree, are looking to the USA to complete their manager qualifications. Often enough, this education exodus means that Europe loses these management talents forever.”

Older students who need to learn more

The school's target students will be between the ages of 27 and 55 years old, already in middle management and on the upward track to the executive suite at their respective companies.

Next to executive seminars and training programs, the school will offer MBA and Master of Public Administration degrees for the roughly 200 to 300 expected to take part in one-year fulltime programs.

Many of the details, such as the study programs and classes offered, have yet to be worked out. Derek Abell, the school's first president, evoked names like Harvard, Stanford and the INSEAD in France as institutions along which the ESMT would be modelled.

Unlike other programs, however, he said the ESMT would put an emphasis on Europe, leadership and governance skills and practical training.

Berlin benefits as well

The school's location in Berlin will guarantee it access to growing Eastern and Central European markets and put it in an ideal position when those markets finally boom. The news is also good for the financially strapped city of Berlin, which hopes to benefit from the stream of professors, executives and students attending the school.

"We firmly believe the school will make Berlin a name to be reckoned with whenever one talks of centers of excellence for business leaders," Mayor Klaus Wowereit said at the opening.

But disagreement remains on who will renovate the old DDR building. Berlin, heavily in debt, expects the school to pick up the 25 million euro tab. The school has so far refused.

Both sides said Thursday they expect a compromise to be reached soon.