Over a year ago, I emailed more than 50 bschools we work with an open invitation to offer their opinions on where the future of business education was headed. Only a couple of bschools responded. I continue to see evidence mounting that the 115-year old MBA program needs to be restructured. As I have said previously I see this movement, “…more connected to and predicated upon markets and social change”, than change from within the system.
Consistent with this view, the Economist recently provided the market with an update of sorts on the state MBA education. And, while I do not believe MBA and business education are one and the same, I found some data helpful, worth sharing and of value to you. Below are a few key takeaways from the article:
• 2-year, full-time, resident-based degree programs have fallen out of favor with employers and students. According to the Economist, “Interest in the full-time variety has waned markedly in recent years. Five years ago, a business school on our list could typically expect to receive 17 applicants for each available full-time MBA place. This year the figure is 10.” That’s just over a 10% drop in applications each year, which cannot be sustained.
• MS degrees are in demand. The Economist sees, “The MBA is under pressure from specialist masters degrees, which are growing in popularity.” I saw the MS-degree movement happening years ago and have often advised students to consider a 1-year MS degree as a viable option to a 2-year MBA program. This is especially the case when/if the person interested in obtaining an advanced degree can secure a spot in an employer-sponsored leadership development program. In 2013, my son had just graduated and was placed in such a program by Credit Suisse who hired him straight out of college. This is a winning combo which saves time and money, and has higher perceived value from employers.
The Economist believes, “Employers now have two main needs…They are looking for people they think have leadership skills, and who can come up with ideas on strategy, but they also need graduates who can carry out specific, complex tasks. They tend to raid generalist MBA programmes for the former and specialised masters programmes for the latter.”
• Online MBA programs are making up shortfalls in demand for traditional MBA education. The 2-year MBA is also experiencing pressure from online education, which according to The Economist, “…is quickly shedding its former, shoddy reputation. The very best business schools are offering online MBA programmes, and their number will grow by 9% next year.* According to GMAC who was quoted in the article, “Online options appeal most to the older generation, who can combine them with their full-time jobs.”
To all of those interested in an online MBA, I would add two suggestions which I learned multiple times as the Executive Director of the Online University Consortium:
1) Make sure the degree program is accredited with a body governed by the Council for Higher Education Accreditation (CHEA). When we studied the topic at the time, “Two-thirds of all online learners placed value on accreditation and equated it with quality.”
2) Also, make sure anyone you plan to work for/with recognizes the name of the institution granting the degree. The “familiarity with institution and degree” criteria is equally important for any relationships you base upon your profession/career. This was a topic we researched at Online UC. Our findings were unmistakable, “By a 2:1 margin, the majority of employers hired or promoted employees/applicants who were educated by an institution they knew.”
• Trends in business become needs for education. As the information economy kicks into a new phase, big data is becoming everyone’s priority. The Economist has also picked up on this trend saying, “Big data is another growing area of study. Last year, 94% of schools that offer a masters in subjects such as business analytics saw applications rise significantly. It was big business itself that lobbied for the programmes, says Daniel Wright, vice dean of Villanova University’s business school in Pennsylvania, because firms found that traditional MBAs were falling short in areas such as statistics.”
Please Note: the previous quote on “Employers having two main needs…” and understand that this fits into the specialized MBA category. It is a hot trend now and something to consider if stats/analytics is an area of strength and interest. However, because the article didn’t place an exact number on how significantly ‘MS in Analytics’ applications rose, you might want to question the sample size.
In 2017, we plan to commit more time and resources to research, investigate and cover the future of business education worldwide. Until then, have a great holiday season.
* According to the Graduate Management Admission Council (GMAC), which is an association of business schools.