Why MBAs Are Thriving Everywhere but America

(Bloomberg Businessweek) -- At a glance the MBA might appear to be in trouble.

Applications worldwide to advanced business programs dropped 6.9% this year, according to the Graduate Management Admission Council (GMAC), which administers the GMAT test, a key benchmark for prospective students. But the world outside America tells a very different story.

Two-thirds of European full-time MBA programs reported an increase in applications in 2019, with a similar number in Asia reporting growth, the GMAC data show. And more than half of Canadian business schools have seen an increase. Contrast that with the U.S., where a booming labor market and ballooning tuition fees have contributed to declines at three in four full-time MBA programs. 

Non-U.S. students who might ordinarily flock to the prestigious American programs are turned off by the Trump administration’s hostile environment for immigrants, supporting universities in their home countries. And a broader shift in the base of power toward emerging economies, coupled with countries like China engaging more on the global stage, makes outward-facing MBA programs more popular than ever.

Bloomberg Businessweek spoke with deans at five business schools across Canada, Asia and Europe of varying sizes and rankings in our annual survey. They gave their elevator pitch on why it’s more important than ever to get an MBA outside the U.S.

Ding Yuan, China Europe International Business School

Ding Yuan, since June 2015 dean of the China Europe International Business School (CEIBS), believes his program has benefited from the rise of Asian economies. He says for decades demand for MBAs was poor in Asia, except for Japan. Local students historically used the MBA as a doorway into multinationals based in Europe and the U.S..

“Now this trend is changing dramatically,” Yuan says. Today, more than half the offers made to Chinese MBA graduates from CEIBS come from Chinese companies looking for globally literate, cross-cultural experts—the fact that CEIBS’s MBA is taught in English helps. Overall, 94.3 percent of MBAs end up in a job within three months, the highest in the last 10 years.

It also helps that international students join the three cohorts of between 170 and 180 students on the CEIBS MBA at three local campuses—in Beijing, Shanghai and Shenzhen (and two abroad). This year, the first students from Morocco and Malta arrived in China, their first since the school was established by the Chinese government and European Union in 1994. The Moroccan student joined CEIBS, No. 1 in this year’s Bloomberg Businessweek ranking of schools in Asia, after seeing an opportunity: the first direct flight between Casablanca and Beijing starts next year, and study trips to inland China alongside an embedded course in the country will help understand local customs. It’s part of a goal Yuan has to achieve a 50-50 Chinese-international student split. “China will soon be the first economy in the world, and we will be among the top schools in the world because of our significance in China,” he says.

Fiona Devine, Alliance Manchester Business School

While the MBA struggles to maintain a foothold in the U.S., Fiona Devine, dean of Alliance Manchester Business School, believes it still has a future in Europe and the U.K. “You’ll get people that have come from very specialist areas, and they see that if they want to take their career to the next level, they need a holistic view of where their company is positioned,” she says.

Still, she’s aware that a two-year MBA program is a long time away from the world of work, which is why Manchester provides students with three options of study: a 12-month, 15-month or 18-month course. Three-quarters of students choose the 18-month program, but can switch later.

Ranked No. 18 in Europe, Manchester is an international school, with just 17 percent of its 2,000 strong global MBA class drawn from the U.K., where it’s the largest and ranks among the oldest programs. Six in 10 students originate in Asia, with the school running its first workshop in Japan recently. “It was very successful, and we’re going to reflect on that and what more we might do,” says Devine. “It’s a bit of experimentation.”

Students tend to like Manchester’s live projects with local businesses clustered in northern England, providing consultancy services that give MBAs an opportunity to work outside the classroom. It also helps keep the program current. “The business world changes a lot, and management education needs to keep up with that,” says Devine. “It’s always making sure we have good links into the business world and we’re making all those changes, reflecting the curriculum all the time.”

Andy Rose, National University of Singapore

“The pent-up demand for serious management education is enormous, and it’s simply growing,” says Andy Rose, dean of the National University of Singapore’s (NUS) business school, the No. 3 ranked program in Asia. His pitch comes easily, a benefit of where he’s based. Forty-five percent of Singaporeans were born outside the country, says Rose, and 88 percent of those on the full-time MBA are from outside Singapore. “You’re going to get an intrinsically international MBA just in terms of your classmates alone.”

Two years ago the NUS MBA underwent a major review that “dramatically” changed its outlook. The course is positioned as the most transformational MBA for people who want to switch industries, he says. The program now offers two core curricula: a standard offering full of traditional marketing and finance skills, and another experiential core running alongside that prioritizes soft skills and presentational expertise. That includes a small team project of pitching solutions to real-world businesses.

“When Singapore shoots, it doesn’t aim to just be one of the best in Asia,” says Rose. “We want to compete not just with Asian business schools, but with the likes of  London Business School [No. 3 in Europe] and INSEAD [No. 2 in Europe], plus Harvard, Stanford and Booth” in Chicago, all of whom are in the top five of our U.S. rankings.

Franz Heukamp, IESE Business School, University of Navarra

Franz Heukamp recently celebrated three years since becoming IESE’s dean and remains as bullish about the future of the MBA as he did when he joined. “We live today in a moment when things are changing very fast at all levels,” he says. “What society needs right now are people who can do a whole host of different things that really require a more generalist point of view.”

Unlike flagging U.S. programs, the 61-year-old IESE MBA—ranked sixth in Europe—has enjoyed continuous growth over the last decade, with students drawn from 55 different countries and an average age of 29. And when they’re on campus, students can’t sit in national silos with countrymates. “One of our unique value propositions is that it’s a very international program that focuses on global business,” says Heukamp. “We use a lot of team-based projects in teaching, and the teams are set up to maximize diversity.” Around 25 percent of IESE’s students come from Asia, 35 percent from Europe, with the remainder from North and South America.

IESE often attracts students to Barcelona with a focus on sustainability and business for good, rather than a Gordon Gekko-style capitalism. Heukamp has brought in new courses examining emerging technologies that may shape the future of business, to try and give graduates the best chance to adapt to future changes. “Clearly there is a demand for these type of very versatile, generalist, holistic future leaders that we produce, who are very ethically conscious,” he says.

Sharon Hodgson, Ivey Business School, Western University

Sharon Hodgson became dean of Canada’s top-ranked business school just seven months ago. But rather than managing decline, she’s seeing a booming business. “If you look at our stats, all of our applications for master’s programs across the board are in double-digit growth,” she says. “There’s definitely still demand for an MBA.”

Ivey’s program in London, Ontario, is predominately case-based education, rather than solely on lectures. “We want to create an immersive experience for students to develop leadership skills, how you solve problems and how you learn to persuade and be persuaded in a conversation,” Hodgson says. She’s keen to solve the problems of the future, starting a strategy to rethink and further strengthen the education they offer. Key among the changes will be a focus on disruption. Hodgson comes from an AI background and wants to improve students’ understanding of how to adapt to changing technology.

When she arrived, Hodgson was surprised by the strength of the MBA alumni network, who graduate with average total compensation of C$103,024. While it draws mostly from Canada, with only 25 percent of students coming from abroad, demand from international applicants is increasing—meaning the already global alumni network will become even more so. Hodgson also wants to ensure students don’t lose contact with the school since then. “If you think about the trajectory of how work in the future will happen, and how many career changes people will have, it’s important to make sure alumni are continuing engagement in terms of additional learning and coaching in career management.”

To contact the editor responsible for this story: Timothy Coulter at tcoulter@bloomberg.net, Caleb Solomon

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