The school that George built

Profile: Central European University Business School, Budapest

George Soros’s latest multimillion dollar gift to the Central European University Business School underlines the gulf between the Budapest-based private institution and its rivals elsewhere in the region.

“They are unique in the region in having a serious endowment,” says the head of a competitor school. “Everybody else has to survive off tuition fees.”

Soros, the Hungarian-born billionaire investor founded the business school in 1988, a year before the fall of communism in the country. It does not want for resources – all students will receive an iPad this year, for example – but Mel Horwich, who was appointed dean at the beginning of this year, clearly has a mandate to shake things up.

“We’re not a large business school, but we want to be of the highest quality, differentiating ourselves in one area in particular: innovation,” he says.

Horwich, who earned his doctorate from Harvard Business School, was a professor at New York University’s Polytechnic Institute before taking up his position in Budapest. There is more than a sense that his academic profile – he is a specialist on managing and building innovative, technology-led companies – was a major factor in his getting the job.

While the school boasts of having an endowment per student that is three times larger than Oxford’s or Cambridge’s, in terms of brand recognition and academic reputation, it is still a long way behind – something Horwich is keen to change.

“This is a region where you have lots of creative people, but you need a strong academic system to help that innovation bear fruit. There are strong technical universities here, but we can provide the management expertise,” he says.

Soros’s latest donation points in the same direction: the $7.55m gift will go towards setting up an Institute for Entrepreneurship and Innovation at the business school. Central to the institute’s mission is a Business Accelerator Lab, which will be there to nurture start-up companies around the region and educate aspiring entrepreneurs.

To some extent, this regional approach harks back to the business school’s early days, when Soros set up the business school and the Central European University, its sister institution, to promote managerial excellence and free academic inquiry in a region that was in the midst of transition. Later, the university reinvented itself as a specialist in democratic and economic transition, looking beyond eastern Europe to recruit students from emerging markets worldwide. With this latest venture, the school is once again turning its focus towards central and eastern Europe.

But this is an urgent need, Mr Horwich says. “What the United States has excelled in is not just starting new companies but knowing how to grow them: it’s about scalability. One way of achieving that scalability is by partnering with business education institutions,” he says. “Managing a growing company is different from managing a pure start-up: the growth dynamic itself is hard to manage.”

In part, the institution’s return to its roots reflects a pragmatic acceptance that the region no longer enjoys the attention from investors that it once had. But there is also a sense of a mission. “Budapest has improved as a business location in absolute terms,” Mr Horwich says. “But in absolute terms, it may well have been falling behind. The question is, can we make it leapfrog over other competitors and become a regional hub?”