This month’s gyrating share prices on stock exchanges across the globe could end panic through the world of business schools. While students who are graduating in the middle of this year and planning to move into the financial sector will be particularly concerned, business schools themselves will be haunted by the spectre of 2001-2, when recruiters withdrew job offers and applications plummeted.

That said, while turmoil in the stock markets of developed countries is bad news for those who are looking for jobs at the end of their MBA courses, statistics show it can boost applications by those wishing to start courses.

The fortunes of business schools and stock markets are inextricably linked. Unlike university departments of philosophy or literature, which can operate in splendid isolation, the success of a business school relates as much to the current business environment as it does to the quality of teachers and research faculty.

As the Financial Times publishes its 10th global MBA ranking, this correlation is all too apparent. As London has grown as a world financial centre, so has the popularity of British business schools, with students eager to work in the UK on graduation. At London Business School, for example, which is the highest ranked European business school ever this year – it is ranked number two in the world – 69 per cent of graduating students last year took their first permanent job in the UK, even though only 9 per cent of the students were British. The strong pound has also made UK job offers financially competitive for overseas students.

On the other side of the coin, the weak dollar has meant job offers in the US have not carried the expected salary premium for non-US students, even though they can enjoy what are, in effect, cut-price fees.

Also abundantly clear from this year’s ranking is the growing number of world-class business schools in Asia, particularly in China. “The rise in volume and quality of Asian business schools is also economically linked,” points out Arnoud De Meyer, director of the Judge Business School at the University of Cambridge. “This is for a very simple reason: the demand for business schools is correlated with [the size of] GDP.”

Prof De Meyer believes the increase in the number of Asian business schools will result in a wave of innovation, just as the rise of the European business school saw innovations such as the development of the one-year MBA programme and the creation of culturally diverse student bodies. “How do you manage in fast-moving economies with limited infrastructure?” asks Prof De Meyer. “People have to be extremely creative in managing when infrastructure is under-developed.” He believes European business schools are changing, too. “We have come out of a time where most of us wanted to emulate the US business schools. I think in the next 10 years we will want to differentiate ourselves and build on our own strengths.”

Not everyone agrees. Michael Luger, a former academic at the Kenan-Flagler school at the University of North Carolina and now celebrating his first anniversary as director of Manchester Business School in the UK, believes that European business schools are still trying to emulate their US peers in their approach to rigorous research and to student satisfaction, in particular the relationship with alumni. “We haven’t gone nearly as far as many US schools,” he says, and believes this focus on alumni will continue to grow in Europe.

One other area where the US still leads the way is in funding. Not only do endowments help in campus construction and in attracting faculty, but in attracting students too. Last year at Stanford, for example, 72 per cent of students received some form of financial aid, according to Lisa Giannangeli, the director of marketing for MBA admissions. “We paid over $7m in grants and research assistantships.”

And while European schools are stepping up their academic research output, US schools are moving more towards their European counterparts in teaching methods, including more teamwork and overseas projects. Big name schools such as Stanford, Columbia and Yale have all recently redrawn their curriculum to incorporate these pro-active elements.

Joel Podolny, dean at Yale, says recruiters’ reactions have been positive. “We have had more recruiters come to campus this year than at any time in the past, even from the banking sector.”

At Stanford, Ms Giannangeli says its personalised approach has proven attractive to students, who often write about the curriculum in their submission essays.

But perhaps the most fundamental area of difference is in the kind of programmes offered to those who have just completed undergraduate degrees. In Europe this is the traditional MSc market, with MBA courses attended by those with several years of work experience. In the US, many of the top schools are looking for students with just two or three years of work experience, or no work experience at all, to sign up for an MBA.

For many of today’s MBA students, the attraction of the programme is that it can be used as a mechanism for changing careers – particularly the two-year US programme – as well as giving a strong dose of management education. So, says Prof De Meyer, there is a market opening up for a post-experience degree programme for career changers.

Although many deans view the past decade as one of innovation, many also believe that it will be the next 10 years that change the face of management education. In the UK, Nigel Banister, chief executive of Manchester Business School Worldwide, says this will be the first decade when “digital natives” – anyone under the age of 25 today – will go to business school. “The workspace, living space and learning space will all be linked together…There will be personalised learning spaces …Traditional teaching methods will go.”

Mr Banister argues that business schools have been slow to adopt technology and says the problem lies with the professors, not the students. Prof De Meyer at Cambridge raises similar issues and says working with the Facebook generation will require a different type of education. “They are educated in the world of the internet. We [professors] still come out of the age of information shortage where we make decisions on the basis of limited information. Our students are used to information overload …I don’t think we have grasped what that means for teaching.”

While the past two decades has seen the growth of business schools outside the traditional university system, those schools which have grown within a university now believe this is a strength rather than a weakness.

However, it is not the next decade that will be holding the attention today. Eyes will be on the short term and on two dates in particular. The first will be graduation in May and June, by which time reaction to the market turmoil will be clearer. The second crunch will come in September and October when schools will discover how many of the applicants to whom they have made offers turn up for classes.

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