Wharton Bets Big On Blockchain

In the Wharton School’s most recent MBA employment report, 14.9% of the Class of 2017 went to work in the tech sector. Of that group, just 4% went into software. That’s a basic outline of the school’s tech industry output from the last few years — but those numbers may see an uptick in future employment reports because of a new program announced Monday (June 4). Wharton is one of 17 schools around the globe partnering with Ripple, a blockchain-based global payments company, to launch The Ripple Project, a $50 million venture aimed at supporting academic research, technical development, and innovation in blockchain, cryptocurrency, and distributed ledger technology.

The Wharton School and the School of Engineering and Applied Science at the University of Pennsylvania will receive an undisclosed amount of that $50 million under Ripple’s just-announced University Blockchain Research Initiative, and the money will go toward cross-disciplinary faculty research, financial aid for graduate students, and a broad range of educational programs. The Ripple Fellowship will support a select number of MBA-MS candidates each year in a newly established Wharton-Engineering dual-degree program. In fact, according to Kevin Werbach, associate professor of legal studies and business ethics at Wharton, the school’s aspirations in this field are even greater: The Ripple Project will enable faculty research at both Wharton and Penn Engineering to “unlock the full potential of blockchain to inform the creation of truly valuable solutions in the marketplace” — a process that was already well underway before Monday’s announcement.

“Wharton is already active in blockchain-related areas,” Werbach tells Poets&Quants. “That’s one reason we were among the first institutions that Ripple approached. The funding will support and expand our activities going forward.

“Student interest in blockchain and cryptocurrencies at Wharton is overwhelming. The Penn Blockchain Club has nearly 400 members, including a large Wharton contingent. I constantly had students approaching me last year asking about how to learn more about the area, or seeking feedback on projects they were already developing. Technology and entrepreneurship area already among the fastest growing areas of interest for our MBAs. Wharton’s strength in finance and our growing focus on analytics make blockchain a natural fit for our students. As the blockchain industry matures, there is a growing demand for people with the rigorous business knowledge that Wharton provides to scale and manage companies.”

THE RIGHT TIME TO GIVE BLOCKCHAIN A BIG BOOST

Ripple and Penn, Werbach says, hope the new partnership spurs students and faculty to produce interesting research and technical developments that will “add value to the global blockchain ecosystem.” But what is the “blockchain ecosystem”? Put simply, it is a way for consumers and suppliers to connect directly, removing the need for such third parties as banks. It is a decentralized database, or digital “ledger,” of transactions that everyone on the network can see — essentially a chain of computers that must all approve an exchange before it can be verified and recorded.

The industry is young, Werbach says, having only begun in 2009, and Ripple and Wharton believe it is the right time to give it a boost. “Ripple understands the value of using blockchain technology to solve real business problems in innovative ways,” says Werbach, author of The Blockchain and the New Architecture of Trust. “It appreciates the value of academic research and university-based activity to help grow a nascent industry. There have been a few corporate contributions to university research centers in this area, but Ripple is the first company I know that is trying to seed academic work globally. We were excited that Ripple isn’t just looking to fund work related to the XRP cryptocurrency or the bank payments applications where it focuses. It is providing resources that our faculty and students can use in the areas we find most worthwhile.” The same can be said about other cryptocurrencies, viz. Bitcoin. If one were to know how selling bitcoin works, they’d land a lump sum amount of money.

Adds Geoffrey Garrett, dean of the Wharton School, in a news release: “Blockchain represents the fusion of technology and finance spanning schools and disciplines well beyond Wharton. The Ripple Project will transform the way our students and faculty look at blockchain and its potential to change the world. We are thrilled to welcome Ripple’s collaboration as we prepare future leaders who will shape the future of how this dynamic technology is developed to transform fields as diverse as finance, logistics, and healthcare.”

Notable among the other schools partnering with Ripple: UC-Berkeley’s Haas School of Business, the University of North Carolina at Chapel Hill, and the University of Texas-Austin’s McCombs School of Business.

‘BLOCKCHAIN IS MAJOR POINT OF INTERSECTION BETWEEN BUSINESS AND ENGINEERING’

This spring, the University of Pennsylvania held its first Penn Blockchain Conference, bringing together the Penn and Philadelphia blockchain communities and overseeing the development of new curricular offerings that bridge business and technology. The event included workshops and lectures promoting engagement between industry, students, and faculty. It sold out, Werbach says, filling the largest auditorium in the school. Meanwhile, there are other blockchain-related developments afoot. “I lead the Cryptoregulation project at the Zicklin Center for Business Ethics Research, which has been bringing together regulators, private sector leaders, and academic experts on cryptocurrency token offerings since last fall,” Werbach says. “The Alternative Investment Initiative in the Finance Department has an ongoing blockchain initiative. And the Penn Blockchain Club organized dozens of student-led educational sessions, speakers, and other activities during the past academic year.

“Blockchain is a major point of intersection between business and engineering. We plan to research a broad range of topics in in this field, ranging from privacy to smart contract design to regulatory questions to creating trust in decentralized environments.”

Wharton School faculty will be able to apply for funding supported by Ripple’s contribution, Werbach notes, and there will be a similar fund established for Penn Engineering faculty. “I’ve been in touch with colleagues in several Wharton departments who are interested in blockchain and cryptocurrency-related research topics, including Finance, Management, Marketing, and Operations. I’m probably the only Wharton faculty member at this point for whom blockchain is a primary research focus, but there are many intrigued by its potential in areas related to their interests. The Ripple funding will help to get more faculty engaged in events and research projects in the area.”

He adds that the funding for faculty will be spread over multiple years, with guidance offered on the expected level of support and evaluations made case-by-case. “We have to see what the demand looks like first,” he says.

UNIVERSITIES PLAY ‘VITAL ROLE’ IN UNDERSTANDING, APPLICATION OF BLOCKCHAIN TECH

Tom Channick, director of corporate communications for Ripple, adds that the commitments to each school are “multi-million, multi-year” and each school will be given total discretion on how it spends the funds it receives. He cites a report from 2017 showing that global investment in fintech companies grew by 11% while 4,500 job openings with the terms “blockchain,” “bitcoin” or “cryptocurrency” in the title were posted on LinkedIn in 2018 — an increase of 151% over the total LinkedIn postings mentioning those terms in 2017.

Ripple, which has offices in San Francisco, New York, London, Luxembourg, Mumbai, Singapore, and Sydney, considers academia “a critical driver of technical innovation,” says Eric van Miltenburg, senior vice president of global operations, in an news release. “The University Blockchain Research Initiative is an acknowledgment of the vital importance of the unique role universities will play in advancing our understanding and application of cryptography and blockchain technology. It also speaks to the reality that university graduates will fuel a continually evolving and maturing financial marketplace and workforce.

“Much of the enthusiasm and activity to date around blockchain is disconnected from real use cases that result in clear benefits to businesses or civil society. While Ripple won’t dictate research parameters, we are excited to play a role in helping to support faculty and student-led projects that explore increasingly useful applications of blockchain and cryptocurrencies.”

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