Fresh data shows a shift away from the United States towards newer markets like Canada and the Asia-Pacific
An MBA from an elite US business school has traditionally been the crème de la crème. With stellar networks, status, graduate employment, faculty and facilities, the schools draw thousands of applications from all over the world.This year the stack of applications was a little thinner, however. High fees, political turbulence as well as excellent overseas options, mean many prospective students are looking further afield for their MBA.
Data from the Graduate Management Admission Council (GMAC) shows a shift away from the US, long the most popular destination for prospective MBA students, towards newer markets. Even Harvard, Wharton, Stanford et al suffered a drop in MBA applications last year.
And 2019 looks set to be one of diverging fortunes for business schools. The market for business master’s degrees is stable, but there are big regional variations, with applicants looking at a wide range of options.
Meanwhile, American schools face tough questions about the cost of their programs. And whether the full-time, two-year MBA model meets the needs of today’s students, who seem less willing to leave the workforce as the US economy booms.
“The US continues to be the leading destination for international [business master’s] students, but obviously it’s facing headwinds,” says Sangeet Chowfla, president and chief executive of GMAC. “That has led to growth in other destinations, such as Canada and the UK.”
Data from GMAC's Application Trends Survey Report 2018
Eye On Canada and the East
Application growth is most robust in Asia Pacific, with GMAC figures showing a near 9% increase in 2018. In numerous Asian countries, rising incomes and populations have been a boon for business schools. Asian students tend to study on home soil, and they are showing new zeal for management education, particularly in China.
There is greater interest in Chinese schools today than previously, says Sangeet. Reasons include the growing Chinese economy, multinational companies, and the Belt and Road initiative to finance and build infrastructure, he says. Schools in Singapore, Hong Kong, and Australia are also enjoying a rise in demand.
The opposite has been true for the US, where several factors are behind a drop-off in 2018 applications. Foreign student demand fell the most, by more than 10%. They are concerned about the negative immigration rhetoric of Donald Trump’s administration, for one.
North of the border, schools in Canada report that applications are surging. Canada’s immigration system, which has long embraced highly-skilled workers, is one factor behind the application growth of 7.7% last year cited by GMAC.
The US visa problems have made Canada more attractive to international students, according to Adam Halpert, associate director of MBA career services at McGill University’s Desautels Faculty of Management in Montreal.
“Canada’s multicultural landscape makes it a very unique destination for international candidates to get an education and secure employment afterwards without fear of discrimination,” he says.
Data from GMAC's Application Trends Survey Report 2018
In other markets, however, the immigration system appears to matter less to business school applicants.
One big surprise was Britain’s application growth last year, 3.9%, despite the uncertainty caused by Brexit. UK schools fear tighter immigration curbs, but the pound’s plunge has been a saving grace, making courses cheaper to overseas students. “We expect a busy year,” says David Simpson, London Business School’s MBA admissions director.
Excluding the UK, Europe’s applications grew by 3.2%. Many students are attracted to European courses because they are cheaper and shorter than in the US. The growth may continue, as European schools have not lost advantages, including progressive visa policies in countries such as the Netherlands and Germany.
“Compare this to the noise and uncertainty which surrounds US H1-B [highly-skilled work] visas,” says Nick Barniville, ESMT Berlin’s associate dean for degree programs.
“Candidates who are looking for an international career now see Germany as a viable alternative to the US,” he says. “This is a huge opportunity for all business schools in this country.” And beyond.
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