At the Techcrunch Disrupt conference in San Francisco in 2010, Peter Thiel had a rather stunning announcement to make. The Paypal co-founder announced that his foundation would offer grants totalling $100000 to up to 20 students under the age of 20 who would be willing to drop out of school and start something new and experiment with breakthrough innovation.

Whether it was appropriate to encourage youngsters to opt out of school is matter for another discussion but what it does reinforce is the widespread notion that our university system does not allow for much focus on or encouragement to innovation. Yet, innovation in today's fast changing world is no longer an option but an imperative - not just for product design or technology breakthrough but in every aspect of business. In fact, for the transition of great ideas into successful innovative enterprise, effective and innovative management is a necessary condition.

Business education, therefore, is trying to rid itself of the stigma attached to formal education for its inability to foster innovation and creativity. A good number of B-schools are focusing on electives, specializations and in some cases even in-house incubation centers that would help groom creative leaders for the future. We take a look here at 5 prominent business schools that have an explicit thrust on innovation within their MBA or executive education programs.

1. Babson College: The Babson MBA is one that is widely acknowledged to be at the forefront of programs that cultivates the kind of entrepreneurial thinking that students can apply in start-up ventures and the corporate environment.

In 1993 they adopted a holistic and integrated core curriculum focusing on entrepreneurship for full-time MBA students. The program traces the new venture creation cycle and introduces traditional business principles within the context of entrepreneurial thought.

Students also have an elective offering that focuses on creativity in established organizations. The course discusses factors affecting innovation, how managers promote or hinder it, and the advantages and disadvantages of established organizations in pursuing innovation.

They also offer the Entrepreneurship Intensity Track, which offers a customized elective curriculum for students who have concrete plans for starting their own venture as they complete college or shortly thereafter. Entrance to the mandatory spring course in this track involves an application or selection process during which candidates must interview with two entrepreneurship faculty members and pitch to a pool of potential mentors.

2. Haas School of Business: The Haas School at the University of California, Berkeley has a professed mission of developing 'innovative' business leaders - in its own words, individuals who redefine how we do business by putting new ideas into action in all areas of their organizations, and who do so responsibly.

Last year, the School announced an overhaul of its core MBA curriculum with an explicit commitment to shaping leaders who would define what's next for society and for markets. Announcing the changes, Dean Rich Lyons said, Whether it is producing more fuel-efficient autos or creating new business processes, innovative leaders are the ones who will deliver into our idea-driven economy and create opportunity from the major challenges facing us within the lifetimes of our children.

The curricular changes and new cultural emphasis are built into the model of Berkeley Innovative Leader Development (BILD), a connecting theme that runs through the entire MBA curriculum, both core and elective.

Under the BILD approach, each core course (finance, accounting, marketing, strategy etc.) was reviewed to identify elements of innovation that contribute to these fundamental capabilities.  New content on innovative leadership was added to some courses, and related content flagged in all required courses.

The BILD approach requires all students to take a series of courses, workshops and coaching sessions that develop innovative leadership skills - such as problem finding and problem solving.  They must also take an experiential course in which they apply and hone these skills in a real-life setting. 

It also includes the Berkeley MBA Leadership Development Series - a popular new suite of leadership development experiences that are offered to students as non-credit, hands-on workshops and seminars. 2010 saw workshops delivered by the likes of Marshall Goldsmith and Patrick Lencioni.

3. MIT, Sloan School of Management: The MIT Sloan Fellows Program in Innovation and Global Leadership prepares outstanding executives with the critical skills to create and lead successful, innovative organizations in the 21st century.

The Fellows program (which leads to an MBA or a Masters in Science in Management depending on the track chosen) brings together a unique interdisciplinary think tank comprising 100 talented global managers and gives them a chance to build a strong foundation in key disciplines even as they access the latest research, learn to calculate risk, and talk strategy with the great leaders and innovators of the present day. Fellows are prepared to lead innovation within their organizations and across the industry.

One of the strategic components of the Fellows as well as full-time MBA programs is the Sloan Innovation period (SIP) during which offerings are delivered in a variety of formats: half-day, full-day, or weeklong courses, workshops, simulations, and field trips.

Many of these offerings focus on leadership theory and skill development, and provide a wide range of opportunities for modeling, practice, feedback, self-assessment, and reflection. Within the SIP, students practice the hands-on skills of leadership, and delve deeply into their areas of interest outside the rigid bounds of the classroom.

The Dean's Innovative Leadership Series invites more than 400 of the world's finest leaders to campus every year and gives participants a chance to engage in frank and meaningful discussions with the leaders who are shaping the present and future marketplace with their path breaking moves.

4. Rotman School of Management: The Rotman School of Management at the University of Toronto internalizes innovation and flexibility through a concept coined by it as Integrative Thinking TM.

At the Desautels Centre for Integrative Thinking, internationally-renowned scholars come together to push the frontiers of Integrative Thinking and conduct original research, making Rotman a focal point for thought leadership and dialogue in this area.

In addition to discipline-based courses in areas like Finance and Accounting, first-year students at the Rotman MBA also take 'Fundamentals of Integrative Thinking.' This focuses on understanding and analyzing the big picture so that they are able to approach each challenge with creativity and a willingness to take risks.

Electives offered under the Integrative Thinking model include, among others:

The Opposable Mind - in which participants learn to dig deeper into the complexity of a problem, to recognize and use the tension of the opposing answers to create a new solution. This new answer takes aspects of each but integrates them to create something better than either is alone.

Design Practicum: Business Innovation Lab - which revolves around the three pillars of design thinking, namely, deep consumer understanding, rapid prototyping of concepts that address a consumer need, and business design that make the concept viable in a strategically sustainable way.

Innovation, Foresight and Business Design - which prepares the MBA candidate for the challenge of creating and supporting a real culture of innovation within the framework of an organization. In content, manner and style, this course has been designed to focus on developing the candidate's ability to inspire discovery and learning within teams as well as increasing the value of their own creativity.

5. Tepper School of Business - The Tepper School at Carnegie Mellon University openly acknowledges that to succeed in the continuously evolving business environment of the day, graduates will have to demonstrate unprecedented levels of innovation. Tepper's Donald H. Jones Center for Entrepreneurship has been recognized by NASDAQ as one of the top seven entrepreneurship centers in the U.S.

Students at Tepper can choose from among 7 MBA tracks, two of which focus specifically on Entrepreneurship in Organizations and Management of Innovation and Product Development.

In the first, students receive the tools, experiences, and support necessary to facilitate their development as a leader and innovator in their respective fields. Graduates of this Track pursue a variety of career paths including those in start-up and emerging companies, corporate innovation and business development, entrepreneurship through small business acquisition, venture capital/private equity, consulting, and social entrepreneurship.

The second focuses on the very rarely taught aspect of identifying and fulfilling unmet opportunity. It teaches a rigorous and analytical process that structures the work involved in innovation - thus making it ongoing and replicable. Students gain not only knowledge and skills relevant to managing innovation but also gain experience in an innovation project through its various phases.

(The information on innovation and entrepreneurship initiatives in schools mentioned are mostly collated from the respective websites)