Consulting as Private-Sector Graduate School

July 28, 2022

As an undergraduate student in the sciences at MIT, contempt for management consulting was commonplace. Consulting was the path for people who had ambition devoid of any real interests, the “sellout road” where you made endless Powerpoints instead of providing any tangible improvement to the world. In contrast, going to graduate school was a choice that showed commitment and integrity. If you were willing to sacrifice your 20s in service to a scientific discipline, that showed true passion and an honorable commitment to the field.

I’m now midway through my PhD, and I’ve come to the conclusion that my previous impressions were mistaken and that consulting and graduate school are in fact more alike than they seem. This change has been spurred by making new friends from the world of management consulting and realizing not only that they enjoyed and benefited greatly from their experience, but also that their experience seemed broadly similar to mine.

This essay is an attempt to outline some similarities and differences between consulting and graduate school, speculate about why these differences exist, and finally determine if graduate schools can learn anything from the consulting model. My tentative conclusion is that, at the margin, research groups would benefit from acting more like consultants and directly solving industry-relevant problems for pay.

Epistemic status: moderate to low. These thoughts are based mainly on my own experience as a chemistry PhD student, and likely do not translate to the humanities or social sciences. I also have only a secondhand knowledge of management consulting and so probably suffer from myriad misconceptions.

Similarities and Differences

At a superficial level, management consulting and graduate school both fill the same role: a safe and prestigious opportunity for a new graduate to diversify his or her skills and accrue “career capital.” In consulting, much like in graduate school, learning is key: in the words of Pete Buttigieg, McKinsey was “a place where I could learn as much as I could by working on interesting problems and challenges.” Both occupations can segue smoothly into a variety of opportunities afterwards, in part due to the shared emphasis on connections, networking, and presentation skills, and as a result both professions attract a steady stream of bright, highly motivated people. Easy access to human capital seems to be a shared prerequisite: without a supply of new graduates willing to work long hours in a high-stress environment, neither BCG nor Harvard could survive.

Given the plethora of interesting, well-paid opportunities available for high-achieving graduates, the popularity of these more grueling professions might be surprising. In her essay “Harvard Creates Managers Instead of Elites,” Saffron Huang describes the thought process behind why so many of her Harvard classmates took “the decreasing returns of another NGO internship or McKinsey job” over more inventive careers, concluding that “school-validated options” appeal to students who are “naïve and uncertain about [their] own futures.” In other words, the safety of taking a job well-known to be prestigious is what makes consulting and similar options so appealing.

Although Huang doesn’t mention graduate school specifically, I would argue that staying within academia is the most “school-validated” of all choices. Getting a PhD not only gives one a defensible claim to domain expertise and a chance at a higher-status job but also allows students to stay within the familiar academic system for longer. Faced with all the manifold diversity of the private sector, the chance for a graduate to stay within the familiar confines of the university for a few more years is a safe and socially acceptable way to delay one’s arrival into corporate America. And the high status that professors have in the eyes of undergraduates only strengthens the appeal of graduate school: if all one’s academic role models went down this path, surely it can’t be a bad choice.

From the perspective of the student, one obvious difference is the pay: a typical starting consulting salary is $100k, while my Harvard graduate student stipend is currently $43k. Given that a first-year consultant and a first-year graduate student have essentially the same skills (i.e. what you’d expect from an undergraduate education and not much more), this difference is surprising. Based on anecdotal reports from consulting, my intuition is that this difference is not limited to salaries: the consulting world is flush with cash, while the academic world often runs on the verge of bankrupcy.1

(I’m intentionally avoiding questions around the ethics of consulting because I think it’s not particularly relevant to this piece, and because I don’t think I have any unique insights on this topic.2)

Academia’s Unique Niche

Why does consulting have so much more money than academia? One simple model of academia is as follows: discoveries that provide “present value” can easily be funded by companies, because there’s a quick return-on-investment. On the other hand, discoveries that provide “future value” are hard to fund through the private sector, because there’s no guarantee that the real-world value will be captured by the funder. Accordingly, the government sponsors research into interesting problems with uncertain timeframes to do what the free market cannot.3 This comports with what Vannevar Bush wrote in his landmark 1945 work Science, The Endless Frontier:

New impetus must be given to research in our country. Such impetus can come promptly only from the Government…. Further, we cannot expect industry adequately to fill the gap. Industry will fully rise to the challenge of applying new knowledge to new products. The commercial incentive can be relied upon for that. But basic research is essentially noncommercial in nature. It will not receive the attention it requires if left to industry.

Viewed within this model, we might hypothesize that consulting is lucrative because it’s easier to finance providing present value than providing future value (or because the free market is more efficient than the NIH/NSF). But this picture is oversimplified. Much current chemistry research at least ostensibly addresses present problems in the chemical industry, and research groups frequently collaborate with (and receive money from) chemical companies. Why, then, is consulting better at capturing returns on present value than academia?

Structural factors disincentivize academic labs from acting as consultants.4 Harvard’s stated policy on academic–industrial collaborations involving specific deliverables is that they are discouraged, allowed “only if the activity in question advances a core academic mission of the faculty member’s school and either provides a significant institutional benefit or a public benefit that is consistent with the University’s mission and charitable status.” This matches my experience collaborating with Merck, a pharmaceutical company; it was clear that we were not accepting money for rendering Merck a service, but instead simply working together because our intellectual interests aligned. Although we did receive some money, it was a fraction of what our total costs in salary, materials, etc were for the project.

Policies like this prevent companies from hiring research labs on a purely transactional basis, forcing academics to decouple their incentives from those of industry. Even if an academic lab is running out of money, it must find some way to justify its collaborations beyond pure economic necessity: research groups cannot simply remake their interests to suit whichever employer they want to attract. Viewed within the above model, this is good! Academia is supposed to focus on problems that can’t be solved by industry, not act as a contractor in service of corporate profits.

Yet the preponderance of academic–industrial collaborations suggests that academia’s ostensible focus on long-term projects is not as strong as it could be. In a world where funding for basic research seems to be declining on a per-lab basis, it is perhaps unsurprising that professors turn to alternate sources of funding to keep their labs afloat; moving forward, we can expect this trend only to intensify.

Perhaps the biggest omission from the above discussion is another key role of academia: training students. Graduate school, after all, seeks not only to advance the frontiers of human knowledge but also to train students in this pursuit. But from the perspective of the typical graduate student, it strikes me as unlikely that the specific nature of the problems under study (i.e. purely academic versus industrially relevant) has a massive impact on the student’s learning. Indeed, many students might be better prepared for their careers by having more encounters with industrial problems and techniques. The existence of current industrial postdoctoral positions suggests that gaining scientific experience through industry-relevant problems can be a successful strategy.


Although the idealized model of the university—a place dedicated to advancing long-term human flourishing through the pursuit of knowledge “without thought of practical ends”—is indeed utopian, the present problems with academic funding suggest that a more pragmatic outlook may be needed in the short term. In particular, finding new ways to efficiently fund scientific research and education is a pressing challenge for the field (absent major changes to the funding ecosystem) which remains, from my point of view, unsolved.

Accordingly, the consulting model presents an interesting alternative to the current system. Consulting firms sustain themselves solely by providing solutions to current problems in industry, training their “students” without any need for external subsidies. Is it possible for research groups to support part-time basic research by consulting the rest of the time? At the margin, should graduate schools be more like consulting firms? This approach would require reducing the stigma around research groups acting as contractors, and in so doing perhaps run the risk of lessening the prestige of the university. On the other hand, directly applying university knowledge to solving practical problems might raise public appreciation for science.

We may see the results of this experiment sooner rather than later. As acquiring scientific funding continues to grow more difficult, I expect that smaller, more poorly funded departments will begin to pursue money from industry more aggressively to keep themselves afloat, moving more and more towards the consulting model out of necessity. Time will tell whether this proves to be an alternate, or even superior, model for funding research, or a negative development that undermines what makes universities distinctive.

If forced to guess, my tentative prediction would be that these changes will be good. The present funding model seems wasteful and unsustainable, a relic of massive growth in federal science funding over the past 100 years. A correction is coming, and it will be brutal when it does. Finding new ways to fund research beyond just federal grants, then, is important for the future of research in the US; it’s been done before, and it can be done again. In fact, some of the greatest scientific discoveries have originated not from universities but from the corporate sphere! Disrupting our institutions of science will be painful, but I think the potential upside is high—that is, if academic researchers can accept corporate money while still preserving some ability to pursue basic science.

Another conclusion from this area of thinking is that federally funded scientists ought, as much as possible, to focus on their area of comparative advantage—long-term research with uncertain payoffs, “essentially noncommercial” in nature. At least in organic chemistry, most funding applications that I’ve seen are very careful to point out how their discoveries could lead to immediate deliverables with practical impact.5 If these claims are really true, then these discoveries should be funded by the private sector, not by federal money. These assertions may be part of what a competitive grant application today requires, but their existence seem to point to a fundamental disconnect between what academic research is and what it should be.


  1. It's tough to find sources on this, but anecdotally even at top universities most research labs seem strapped for cash. For structural discussions, see this NPR article and this New Science report.
  2. This issue has been discussed a lot: one particularly influential piece in this area is Daniel Markovits's “How McKinsey Destroyed The Middle Class”.
  3. This is equivalent to saying that scientific progress is a public good. There are more ways that things could be public goods than just long timeframes, but without loss of generality we’ll elide these considerations here.
  4. Many professors do serve as consultants for industry, but they generally do this apart from the university, without involving their students, and the money goes to them personally, not to their research groups.
  5. The New Science NIH report discusses this phenomenon at length: over the past 20 years, the NIH has changed its standards, such that now new grants are expected to have “clear research goals with obvious practical applications.”

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