Much has been written about the MBA degree’s demise — for the first time, global applications fell, if only marginally, last year. But while the US is losing market share, in Europe, Asia and Canada, MBA applications at many schools are booming and look likely to continue in the years ahead, thanks to strong overseas demand for shorter, cheaper MBA courses as well as diverse cohorts and easier access to work visas.
America, the birth place of the MBA, has long been biggest and most popular study destination for MBA aspirants. Despite a growth in number and stature of business schools in Europe, Canada and Asia Pacific they have done little to shift the MBA rankings that heavily influence prospective students. Over half of the business schools featured in the Financial Times Global MBA Ranking 2019 were from the US.
But mounting evidence suggests America is losing some of its allure to overseas students. They feel shut out of the US jobs market because the rules for the H-1B visa scheme for highly-skilled workers have been tightened. Recent changes to the rules that would seemingly have benefited master’s students have failed to improve overseas students’ job prospects.
Many international students are in turn discouraged from applying to American MBA programs, even at some of the prestigious Ivy League institutions. Seventy percent of US schools last year reported falling applications to their full-time two-year MBAs, also because of the strong US economy that deters people from quitting the workforce for fear of missing out on promotions or pay rises.
Canada: a hot destination for international MBA seekers
This bodes well for business schools abroad. America’s northern neighbor Canada is enjoying an influx of overseas MBA students on the back of a progressive visa regime championed by prime minister Justin Trudeau, who embodies the welcoming approach to foreign talent that is lacking in the US.
Ivey Business School at Western University in Toronto reports a 15 percent increase in applications in the past year. “While many schools expected to see an influx from the US as immigration laws became stricter, we’re really just starting to see the effects of this now,” says JD Clarke, executive director of master’s programs, recruitment and admissions.
“We’re seeing an increase in volume of applications from countries in which traditionally haven’t been a source of prospective students,” he says. “In particular, we are seeing tremendous growth in application numbers from countries in southeast Asia (Vietnam, Philippines, Indonesia) as well as from Africa (Nigeria, Ghana, South Africa).”
Ivey has focused its recruitment efforts on these regions and offered specific scholarships for these countries too. Clarke sells the many benefits of pursuing an MBA in Canada. “It’s relatively easy for students to gain permanent residency upon completion of their program,” he says.
“The overall quality of life and general economic stability is a big draw, as is the opportunity to work in some of the big industry centres like Toronto, Vancouver and even startup and tech hub Kitchener-Waterloo.
“Increasingly, Canadian schools are gaining a reputation for offering top quality business education and employment opportunities, on par with their counterparts in the United States and Europe.”
Overseas MBA applicants increasingly headed to Europe
A recent report by the Graduate Management Admission Council (GMAC), which owns and puts on the GMAT main admissions exam, found that overseas interest in US programs has fallen from 48 percent to 40 percent since 2016. Another region picking up the slack is western Europe, which GMAC said has seen a nine percent increase in applicants in the past two years.
Take HEC Paris, one of the Grandes Écoles — elite professional schools that count many of France’s top leaders and politicians as alumni. Over the past year, the business school has seen a 24 percent increase in applications. “We have seen growth across all regions, with notable growth in North America, Central America and the Middle East,” says Benoit Banchereau, director of communications, marketing and admissions for HEC Paris’ MBA.
He points out that the length of the program (16 months rather than two years as is common in the US) keeps the opportunity cost of not working low, but gives students enough time to facilitate a career transformation. “The length of our program is a clear advantage over many US programs, which normally last two years, and are far more expensive than many European programs,” says Banchereau.
The diversity of the cohort is a virtuous circle, with the broad range of nationalities an attractive feature for overseas students. “Our 93 percent international student body enriches the overall learning experience, helping students to shape their view points and preparing them to work with people from many different backgrounds and cultures,” Banchereau says.
Over at ESMT Berlin, one of Germany’s top MBA providers, head of marketing for degree programs Rick Doyle reports a large increase in applications from North America — a new trend — as well as parts of Asia and southeast Asia. Overall, applications to ESMT Berlin have doubled over the past couple of years.
Doyle points to the one-year course, highly diverse student body and the strength of the German job market as factors behind the application increase. About 90 percent of ESMT’s graduates work in Germany on graduation and while speaking the local lingo is helpful, few students do, since 95 percent are from abroad.
The dynamic job market in Berlin, a technology and entrepreneurship hub, adds to the diversity and opportunity for graduates, and continues to be a big draw.
“It is so easy to find work in Germany following the MBA. It is almost automatic for graduates to receive working visas after graduation, in addition to having 18 months after graduation to remain in the country,” says Doyle. “Learning the language will definitely open more doors, but the job market is very open to international talent.”
The challenge for schools moving forward is the strong competition for MBA candidates around the world, despite the application increases. “The addition of more top schools on the rankings in Asia (specifically China) may have an impact [on application numbers] down the road,” says Ivey’s Clarke.
But he is bullish on Canada’s prospects, noting that the 2020 US presidential elections and protracted Brexit process may deter overseas students from US and UK schools. “Canada is well positioned currently to be taking a large share of the overseas MBA applicant market if these trends and issues continue.”
Ultimately, the MBA may be down in America, but it’s booming in other world regions. As ESMT’s Doyle says: “No one is sure if the overall global decline in MBA applications is a trend, or the new normal. However, the MBA remains a very valid degree for someone who wants to have a good foundation in management and a clear overview of a company’s needs across sectors.”