Germany is a Rising Force in Business Education

After a slow start, Germany’s MBA schools are thriving and aiming to compete on the world stage

Germany is a rising force in business education, thanks to the country’s global reputation as an economic powerhouse and home for international talent. The geopolitics of the UK and US have also boosted Germany’s appeal to international students.

It marks an improvement for Germany’s business schools, which have long underperformed relative to their international peers. There are only three German schools included in the FT’s latest ranking of global MBA providers, compared with nine in the UK and five in France. There are more ranked institutions from China, Canada and India than Germany, despite its position as Europe’s largest economy.

Universities in the US, UK, Canada and Australia launched business schools during the 20th century while nations such as France and Spain opened private institutions with strong global reputations. Germany was much slower to develop business schools, largely, academics say, because of the legacy of the Prussian scholars Wilhelm and Alexander von Humboldt.

“The Humboldts argued that an education should focus on building autonomous world citizens rather than professional training,” says Claus Rerup, vice president of academic affairs at Frankfurt School of Finance & Management. The result was a push for public, free universities decoupled from business education along with an unbridled focus on academic rigor.

“After World War II, the government supported mass public universities to provide a higher degree for all qualified students at no cost, so there was also no targeted elite education,” says Harald Hungenberg, dean of programs at ESMT Berlin. Over time, the diplom degree dominated the German academic sphere, as it combined the equivalent of a bachelor’s and master’s degree.

“The structure of the German business education programs differed from the international standard,” says Jens Wüstemann, president of Mannheim Business School. “As a result, these programs received little attention outside the German-speaking world.”

At the same time, many managerial positions within German companies were filled with those who had successfully completed an apprenticeship in-house, so an expensive business degree offered few advantages for those seeking promotion.

With increasing globalization, a new era for German business education

This changed in the 1990s, with German reunification and the liberalization of the EU single market. With increasing globalization, German companies began to expand into new overseas markets and recruit managers who could take their products and services across borders.

“Historically, managers had educational backgrounds in law or engineering,” says Frankfurt’s Rerup. Different talents were now needed — a combined focus on technical and business skills. This boosted the need for management education, leading to a harmonization between theoretical and practical knowledge in German higher education.

Additionally, in late 1990s, the establishment of the Bologna Process harmonized European higher education and gave students greater academic mobility. “German business schools slowly transitioned from the older format of offering diplom degrees to the ‘splintered model’, which grants bachelor’s and master’s degrees,” says Zeeshan Sultan, director of the MBA at WHU — Otto Beisheim School of Management.

This period also saw the emergence of the first MBA programs offered by German institutions. For decades, Germany has exported students who studied MBAs elsewhere in the world, but the direction of travel is reversing. 

“A significant number of Germany students no longer study in the UK, but instead do their education in Germany,” says Frankfurt’s Rerup, citing the UK’s exit from the EU as a major driving force. “Brexit kept Frankfurt in the news and cemented the city’s status as the financial center of the Germany economy.”

Geopolitical climate boosts appeal of MBAs in Germany 

ESMT’s Hungenberg agrees that Germany has benefited from Brexit. “We have noticed that some students have applied to us because they had problems with visas in the UK or feared that they would not be able to get a job in the UK after graduation,” he says. Brexit also coincided with the election of Donald Trump as US president. His administration’s more hostile stance on immigration caused the US to lose some of its appeal as a study destination for many internationals.

Germany has become a hub for foreign talent, thanks to the might of its economy. “Currently, the German labor market is a weighty argument for completing an MBA or in Germany,” says Wüstemann of Mannheim. “Despite the current crises, the German labor market is very healthy and companies are desperately looking for well-educated talents.”

Furthermore, the country has a welcoming immigration regime: after successfully completing their studies in Germany, students have a residence permit of 18 months to find the right job for them. WHU’s Sultan says: “Due to stricter policies in the United Kingdom, job prospects for foreign students seem restricted. For that reason, foreign students prefer to access more open European markets, such as Germany.”

All of the international degrees offered in the country, including MBAs, are held in English and do not require any special knowledge of German. The growth of highly ranked business schools has also brought world-class academics to teach and research in the country. “Many students and faculty have an international background,” says Frankfurt’s Rerup.

However, there are challenges ahead for the Germany business education sector. WHU’s Sultan says: “The pandemic has hampered international mobility to a large extent, and the war in Ukraine has dented Europe’s image. Navigating through these highly volatile times while simultaneously delivering an international experience is an ongoing challenge.”

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