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The figures tell the tale: after seven years of gloom and despondency, the business of executive education short courses, the cash cow of many business schools, is looking buoyant once more.

This is a far cry from most of the past decade, when schools had to lay off staff and diversify into other sources of revenue. But as activity returns, it is clearly very different from a decade ago.

Customised programmes, designed specifically for individual companies, have shown the strongest growth – 80 suppliers are ranked for the first time by the FT in 2014. Some schools have been overwhelmed by new business.

At the Saïd school at the University of Oxford, revenues from custom business have risen from $9m to $15m in a year, according to Andrew White, associate dean for executive education.

“We were turning away business left, right and centre,” he says.

Open enrolment programmes are now shorter and incorporate a greater use of technology. “Blended” learning, which combines online and face-to-face, is commonplace. These days, the demand is for programmes on social media, big data and technology rather than general management. Coaching is increasingly required as an integral part of the programme.

There are changes in geographical demand, too. Over the past two years the growth in executive programmes at 11 top US business schools has risen by almost 5 per cent, according to a survey by Chicago Booth. In Europe the rise was 3.2 per cent. But the 10 schools in Latin America that participated in the FT rankings in 2014 had an increase in revenues of more than 17 per cent in 2013, on top of growth of more than 13 per cent in 2012.

For many companies in the region it is a case of playing catch-up, says Camelia Ilie, dean of executive education at Incae Business School in Peru. In Latin America “companies are like they were in the US 10 years ago,” she says. “They are beginning to look at corporate universities and leadership programmes.”

The market is dominated by local suppliers, because as Prof Ilie points out: “The prices are not as high as in Europe and the US, so it is difficult for US and European business schools to come into the market.”

The Middle East has proven lucrative for many European business schools – HEC Paris is strong in Qatar, Insead has a foothold in Abu Dhabi, while in November, London Business School won a $38m contract to train top managers at the Kuwait Petroleum Company, the largest executive education programme in the school’s history.

In Asia there is also substantial growth, in Singapore, Japan, Malaysia and Indonesia, as well as China, says Michael Pich, dean of executive education at Insead. Asia is now a mature market, he says. “They [managers in Asia] want to know what the global standard in management is.”

Business schools that fly into the region often underestimate this, Prof Pich adds. “I think a lot of people’s attitude to China is old-fashioned. For us the colonial market is dead.”

In particular, Asian companies are looking for managers who can operate in a global context, according to Greg Campbell, who is in charge of executive education in the Asia Pacific region for Melbourne Business School. “Companies are becoming much more strategic and the global mindset is repeatedly coming up in requests for customised and some open enrolment programmes.”

Delphine Manceau
Delphine Manceau

The global mindset resonates across all regions. “More and more people come to us because they want programmes in different European cities,” says Delphine Manceau, dean of European executive education at ESCP Europe, which has campuses in Paris, London, Berlin, Madrid and Turin. She cites the example of Indian Railways, which has selected ESCP to teach a programme on its campuses in London and Paris. “We really feel companies on other continents are interested in the complexity of Europe.”

But it is in online courses that schools are seeing the real changes and the explosion in numbers, says Michael Malefakis, associate dean for executive education at Columbia Business School. The school now runs two open enrolment programmes and one customised programme exclusively online and is planning to launch a technology-based consortium programme for a handful of co-operating companies later this year.

Michael Malefakis
Michael Malefakis

These programmes are complementary to their equivalent classroom programmes, says Malefakis. “One of our fears prior to launching the online programme was that we would cannibalise our face-to-face programmes. It didn’t happen.”

These lower cost online courses are changing the structure of the market, he believes, with online programmes proving increasingly popular with individuals, who pay for the courses themselves. Malefakis says he senses a shift from a business-to-business market to a business-to-consumer market.

As costs are pushed down and technology becomes increasingly prevalent, Malefakis believes executive education suppliers could be pushed out of the market altogether by Moocs (massive open online courses). “My question is, when will people feel the completely free Mooc is good enough?” he says.

At IMD in Switzerland, president Dominique Turpin disagrees. “Soon the market is going to be saturated by Moocs, but Moocs are not going to solve everything,” he says. “You can sit online with people in Afghanistan and Peru, but it doesn’t make you a good manager.”

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