Aiming to become the Sloan of Europe

A new principal, a new building – it's an exciting time for Imperial College, London, says Lucy Hodges

All eyes are on the business school at Imperial College, London, a hitherto low-profile place with a new principal who arrived this month and a brand new £25m building designed by Lord Foster in Exhibition Road, a stone's throw from the Albert Hall.

As the business school which services Britain's premier university of science and technology and situated in the heart of South Kensington, Imperial should be a name to conjure with. To date it hasn't been. With a somewhat lacklustre league table position – it comes below City's Cass business school and below Edinburgh in the Financial Times's table – it has a reputation for turning geeks into managers rather than for educating the top-flight international students who flock to INSEAD and the London Business School.

But that could change if the ambitions of Imperial's provost, Sir Richard Sykes, are realised. With some real investment, Imperial could become one of the UK's top business schools. It will take time, but the building blocks are in place. Professor David Begg, the new principal and a highly regarded economist from Birkbeck College London, says: "It would be nice to become the Sloan of Europe within a decade." Professor Begg is referring to MIT's Sloan School of Management in the USA, one of the premier American business schools with a reputation for educating engineers as well as general managers.

The new principal will have Sir Richard breathing down his neck. As the man who created GlaxoSmithKline, the world's biggest pharmaceuticals company, and as one of the few world-class leaders the UK has produced, Sir Richard knows a thing or two about restructuring and global competition. And he is determined that the business school do better. "We have made a clear statement that we want our business school to be up there with the best like the rest of the college, otherwise it looks like a strange implant."

At the moment, Imperial's full-time MBA comes in at number 78 in the FT's international league table – below Manchester, Cranfield and the Helsinki School of Economics. Interestingly, its executive MBA comes second in the UK, showing what a lottery league table positions are.

The executive MBA is the same programme as the full-time. What is different are the students. Compared with students from other schools, Imperial's students graduate from the full-time MBA without the huge hike in salary that some other schools produce. That is because it takes a lot of students who are setting up their own businesses and not necessarily earning a fortune. Given that salary is one of the important performance indicators in the league table, it is no surprise that Imperial does not do better, say its supporters.

Sir Richard, however, makes no such excuses for the business school. "It has to be 5*," he says, referring to the top score in the research assessment exercise, the system that makes or breaks university departments. At present, Imperial scores a very respectable 5.

The provost confirms that Professor Begg will be given funds to move the school forward and to hire new staff. He won't say how much. "The amount will depend on his plans," he says. "You can only take things up a scale if you bring good people in and attract good students, particularly to the MBA."

Professor Begg, 51, may well be an inspired choice as director because he combines an intellectual reputation with good connections and a track record of fund-raising. He has a Double First in economics from Cambridge as well as a PhD from MIT. Before becoming professor of economics at Birbeck, he taught for 10 years at Oxford.

But he has also been part of the real world, an adviser to the Bank of England and the Treasury. His research interests are in macroeconomics and he is chairing a commission on the "UK outside the Euro" set up by Britain in Europe looking at what will happen to the UK if it does not join the single currency.

One of his great achievements at Birkbeck was to launch three new finance programmes with money he raised from the City. Birkbeck's MSc in finance is now a serious player in London, he says. Professor Begg also started the first MSc in e-commerce in London while at Birkbeck and developed a portfolio of executive education programmes.

For economics students Professor Begg is famous as the author of an economics textbook, now in its seventh edition. This book has certainly made him well known in the United States.

The new principal takes over the business school at the moment that it moves from its home in a converted 19th-century terraced house to an eye-catching purpose-built glass and stone structure opposite, erected with a donation from a successful alumnus, Gary Tanaka. The building will be ready in 2004 and will then be renamed the Tanaka Business School.

The hope is that the new building will add lustre to the brand and help to turn a second- or third-rate institution into a first-rate one just as the new building put up by City Business School seems to have burnished its image. Professor Begg's first job will be to hire good staff. And he may have to ease out those who are not performing as they should. As Professor Richard Portes, of London Business School, points out: "You have to impose intellectual standards at the same level as the rest of Imperial. That's not easy. Students won't come unless you have the faculty."

The omens look good. One of the business school's most highly rated academics, Professor David Miles, who has been asked by Gordon Brown to conduct a study into fixed mortgage rates, says: "The business school at Imperial will become a powerhouse, especially in the area of finance. That's very exciting – and it's why I want to stay here."