Russia's business school battle

(Fortune Magazine) -- The big question right now in Russian politics is who will succeed Vladimir Putin as President in the 2008 election. As it turns out, the two front-runners -- first deputy prime ministers Sergei Ivanov and Dmitry Medvedev -- are also squaring off in a contest for business-school supremacy in Russia.

As chairman of the advisory board of the Graduate School of Management (GSOM) at St. Petersburg State University, Ivanov is the front-runner. His school is an offshoot of Russia's oldest university (founded in 1724), which since 2000 has offered an executive MBA for Russian managers modeled after American B-schools.

More from Fortune

Citi promises to rein in risk Wall Street looks for a signal from Sprint Countrywide fears: Still simmering

FORTUNE 500 Current Issue Subscribe to Fortune

The rest of the school's students are mostly undergrads, but in 2009 it will launch a full-time, 16-month MBA program taught entirely in English and located in a new campus on former palace grounds that once housed Russian royalty.

Medvedev, meanwhile, chairs the international advisory board at the up-and-coming Moscow School of Management (also known as Skolkovo after the neighborhood in which it is located). It just celebrated its first anniversary by bringing in Jack Welch to teach a class to Russian business managers. Right now Skolkovo offers only executive education, but a one-year MBA program will launch in 2009 in a new state-of-the-art complex.

The schools take different academic approaches: St. Petersburg grooms managers for corporate careers, while Moscow stresses entrepreneurship. Moscow is bankrolled by Russian oligarchs like Roman Abramovich (the UK-based owner of the Chelsea Football Club). It also is run more like a business than a school: Professors get bonuses, and there is no tenure.

More than two dozen American and European business schools have partnered with St. Pete's, but the upstart Moscow school, thanks to its co-dean Wilfried Vanhonacker, who previously ran the China Europe International Business School (CEIBS), has close ties to programs in Asia and is eagerly courting U.S. schools like Duke's Fuqua School of Business. (Fuqua hosted an event in Moscow in July.)

Despite these alliances, very few American MBA candidates are clamoring to study at either school. That's unfortunate, says St. Petersburg dean Valery Katkalo, who, like Putin, doesn't pass up a chance to criticize the U.S. "I would suggest that American schools pay more attention to internationalization," he says.