More MBA students are Studying Closer to Home in the Pandemic

For some, localization undermines the cosmopolitan experience of business school

A growing number of working professionals are fleeing the economic downturn and enrolling in business schools to upgrade their credentials. However, unlike in past recessions, many of those flocking to MBA programs this year are staying closer to home in the wake of the Covid-19 pandemic.  

The trend of localization is problematic for business schools because it undermines the cosmopolitan experience, one of the hallmarks of a top MBA degree. In a globalized world, executives will travel across the world to study together with a diverse cohort of high fliers to gain a global perspective.

However, that diversity is now under threat, at least in the short-term. Last year, two thirds of MBA programs around the world reported a rise in domestic demand, but only half noted an increase in overseas applications, according to the Graduate Management Admission Council.

“The Covid-19 restrictions induced some candidates to choose programs closer to their home,” says Andrea Masini, associate dean for MBA programs at HEC Paris. He reports a 36 percent increase in applications from France in 2020. This led to a “significant” uptick in the number of European students compared to 2019.   

He puts this down to a number of international candidates deferring their entrance due to travel constraints. This undermined strong overseas demand, with HEC noting that applications from Africa and Latin America were up by 47 percent and 43 percent, respectively. The challenge now will be to convince these students to take up their place next year.

Lower-ranked business schools likely to be affected

In the meantime, the drop in overseas students has intensified the competition for domestic applicants, which is likely to squeeze lower-ranked institutions. Like some of his peers, Josep Franch, dean of ESADE Business School in Spain, highlights a “flight to quality”, with top-tier schools gaining market share as students aim for the highest-ranked programs.

“With the growing uncertainty, participants want to make sure that they come to study at schools with a strong reputation and history that underpins their prestige,” he says.

“This may put pressure on some lower-ranked institutions. We have observed that some of them have decided to stop offering full-time MBA programs, while they develop new offerings relevant to their local markets.”

However, the increase in domestic demand does not necessarily lead to a decrease in the proportion of international students in the class. Many business schools, especially in Europe, still receive the vast majority of their applications from abroad, even under the pandemic restrictions.

At ESADE, the proportion of overseas MBA students has remained above 95 percent this year, with students coming from 45 different countries, in line with previous years. The school’s growth in domestic demand has been boosted by students who want an international cohort but prefer not to travel due to coronavirus uncertainty.

In response, ESADE has invested nearly €3m in technology to broadcast lectures to the world. “If a participant cannot attend a class due to mobility problems, they can connect online,” says Franch. “Our vision is that the face-to-face experience will increase in importance in the future, although it will be combined with online experiences to create new blended offerings,” he adds.

However, in the near-term, the rise in domestic demand will not have made up for the shortfall of fee income in markets such as the UK and Australia, where international students typically pay much higher fees.

More students staying closer to home

The 2021 Tomorrow’s MBA report, published by the education research group CarringtonCrisp, found that 61 percent of respondents are now considering studying at a business school closer to where they live. For some students, the choice of studying nearer to home is driven by the improving quality of local business schools, especially in countries like China.

However, the report’s author, Andrew Crisp, notes that many international students are motivated by opportunities to work in another country after their studies, and places such as Canada and the UK that have sought to reassure students that this will still be possible are likely to continue to attract overseas students.

He adds that virtual study forced by the pandemic could potentially grow diversity with students who previously may not have been able to afford the living costs associated with an MBA in an expensive destination, now able to take part.

At MIP, the Graduate School of Business of Politecnico di Milano, the dean Federico Frattini says there are enough Italian students to substitute for the school’s overseas exposure. He reports a slight decrease in international applications, but insists that the drop was offset by a 13 percent rise in domestic demand due to coronavirus uncertainty.

“In the last few years, we focused mainly on international candidates. Now, we are back to Italian students. But we hope the situation will be temporary,” says Frattini, noting that students may be keen to return to in-person study when the crisis, which has underscored the need for human connection, abates.

Shameen Prashantham, associate dean and MBA director at CEIBS in Shanghai, shares Frattini’s optimism for the future. He points out that, while safety is driving the localization trend in the short term, the volume of overseas applications in 2021 has been increasing. It’s a similar story at MIP, though it is still early in the admissions cycle.

“If a seismic shift from globalization to localization was truly underway, and applicants were beginning to favor domestic programs over those abroad, I believe, by now, we would have seen a dip in these numbers,” says Prashantham.

Many international students started their MBAs from CEIBS’ European campus in Zurich, Switzerland, so the school maintained a “healthy” international rate, but “we won’t be truly happy until all three sections are reunited in person in Shanghai”, Prashantham says.

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