Global economic power has shifted eastward. So has business education. Applications to business schools in the Asia-Pacific region have outstripped the rest of the world last year, for the second consecutive year, according to the Graduate Management Admission Council, which runs an entrance test.
All eyes are on China, where an expanding economy, population and disposable incomes have driven MBA application higher, as well as strong demand among corporate recruiters for graduates. But India, Australia, Hong Kong and Singapore are all rising forces in business education too.
Japan: an increasingly global outlook
In Japan, business schools are looking to train the next generation of managers who will lead companies with an increasingly global outlook. With the Japanese population set to shrink at the rate of one person every minute, the domestic consumer market is rapidly decreasing.
Meanwhile, the links that bound Japanese companies, suppliers and customers via cross-held share stakes — known as Keiretsu — are unbinding. Many firms are thus looking overseas for growth. “That is good news for Japan’s business schools,” says Andrew Crisp, of the education consultancy CarringtonCrisp.
He says schools also want to globalize their student intakes and may be galvanized by Japan’s tradition of life-long employment waning, while entrepreneurship is rising.
“Japan’s higher education sector missed the boat when the rest of the world internationalized 30 years ago,” says Crisp. “The economy was booming so there was no reason to do so. They are now on a drive to catch up.”
For example, Canada’s McGill University MBA Japan, based in Tokyo, attracts up to 40 students from more than 10 countries who study part-time in English.
“Japanese corporations typically promoted from within, but are now beginning to see that brining mid-career leaders with specific and tangible business skills will be to their advantage,” says David Hackett, course director.
Other changes are afoot in Japan. A debate is raging over whether companies should focus on shareholder primacy, rather than the traditional focus on the long-term interests of stakeholders including employees and customers.
“Post-war Japan needed to rebuild the country and the home market, so emphasis was placed on the employee,” explains Hackett. “Post-financial crisis, corporations were more worried about their survival, so they dialed back on employee benefits, without really shifting those resources to shareholders, and stockpiled lots of cash.”
Corporate governance has also gained a renewed focus at Japanese business schools because of high profile corporate scandals at Toshiba, Olympus and Nissan.
But Hackett says that change is slow in Japan. “There’s a bit of a lag between identifying a trend or future need and acting on it.”
Australia: globalization under fire
While Japan has focused on globalization, this is under fire in Australia, a leading provider of MBAs in the Asia-Pacific region.
More than 38 percent of all overseas students at Australian universities in 2018 were Chinese – a fact that has raised concerns among reactionary Australian politicians that the nation is too dependent on Chinese students, and exposed to future attempts by increasingly protectionist Beijing to stem the tide of Chinese students heading overseas with immigration policy.
According to the Department of Foreign Affairs and Trade, international education is Australia’s third biggest export market, worth AU$32 billion annually.
MBA programs though, are less exposed to such risks. According to trade agency Austrade, Chinese were the third largest crop of MBA students in Australia in 2018. Some 1,139 enrolled, up from 958 in 2017.
India was the top source of overseas talent for Australian MBA programs, with 5,734 Indians enrolled last year, a jump from 4,800 in 2017.
“In our full-time MBA, we get our largest volume of applications from India,” says Clinton Free, academic director of executive education at University of Sydney Business School. He adds “we do not face any over-reliance risks at the MBA level” as the cohort is curated.
Dominance of any one nation on an MBA would reduce its attractiveness, as learning from people with a broad array of backgrounds is a hallmark of an MBA.
But there are other risks to Australian business schools — including the growing popularity of private colleges that offer cheaper courses. According to consultancy Nous Group, the four biggest MBA course providers to overseas students in Australia are private institutions, not universities.
What is more, the growth in quality and reputation of Chinese schools has given Chinese students more reason to stay at home for an MBA.
Meanwhile, overseas applications to Australian institutions could be hit by the UK’s reversal of immigration controls, with the reinstation of the two-year post-study work visa for overseas students coming into force this year.
Free notes a contrast to the US, where visa rules have been tightened recently and a trade war with China waged. “The tension between the Trump administration and China has no doubt impacted enrollments at US institutions, which has benefited the education sectors in other parts of the world, including Australia,” he adds.
India’s business education “an island of its own”
Global protectionism also helps to explain why about 95 percent of applications to Indian business schools in 2019 were from Indians, according to the GMAC.
“The global uncertainty around employment visas comes as a strong deterrent” to Indians studying overseas, says Prashant Tibrewal, founder of India-based admissions agency Admit Square Consulting.
He adds that cost is also a major factor behind Indian students’ strong desire to study at home for an MBA, which costs about $25,000, on average, compared with upwards of $100,000 in the US.
The lower relative cost of an Indian MBA has failed to attract overseas students, however, which has stunted the country’s reputation as an education hub and halted coveted diversity in the classroom.
Tibrewal says this has much to do with India being a developing economy that is slowing and with limited employment prospects. “Candidates prefer to work in developed economies," he says.
There are also tough visa controls for overseas students after they graduate. India has also recently been rocked by protests on some university campuses in response to what critics call an “anti-Muslim” citizenship law and violence against students, which the Indian government contests.
But Tibrewal says the protests have been far away from top MBA providers and are unlikely to have any impact on overseas students coming to India.
The quality of the education has improved markedly since the first business schools were set up in India some 50 years ago in collaboration with the best US schools, which trained India’s first management professors.
Today Indian business education is “an island of its own”, says Sanjay Kallapur, deputy dean of Indian School of Business, noting highly ranked research programs and accreditations from top agencies like AACSB.
“Indian business education, at least its top end, has caught up with world standards,” says Kallapur.
Today there are some 3,000 business schools of varying quality. Alongside the public and autonomous Indian Institutes of Management, several private institutions of high quality have emerged, including Great Lakes Institute of Management, and SP Jain Institute of Management and Research.
But the country has not yet produced a top-10 ranked business school, which would help in attracting foreign talent to its shores — a big challenge facing many schools in the Asia Pacific region.