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T he past year has been buoyant for Europe’s business schools: more programmes are running, applications are robust and a school has been established. “There is a brilliant bloom on the MBA rose,” says David Wilson, Graduate Management Admission Council (GMAC) president. “Demand for seats in all types of MBA programmes in countries around the world is rebounding.” Interactive European business schools ranking 2006
The GMAC 2006 survey shows applications are up – for full and part-time programmes.
At Insead at Fontainebleau, Antonio Fatas, dean of the MBA programme, agrees. During the past year at Insead, applications have jumped and demand is growing in emerging economies. The school has 30 per cent of its intake from Asia, which Prof Fatas expects to increase.
Meanwhile, at London Business School, Julia Tyler, associate dean of the MBA programme, reports an increase in applications from India. “The focus of business education is moving east,” she says.
Figures from GMAC support her comments. There are more business schools in India than the US. According to its findings, in 1999 the US had 846 business schools, while India had 639. This year there are 927 in the US and 953 in India.
Ms Tyler expects growth in the Indian market and eastern Europe. “There is greater confidence coming out of eastern Europe.” She welcomes the idea of more MBA providers. “The more high-quality providers there are, frankly, the better. One of the issues around the MBA market is the difference in quality. “I hope the increase in providers will produce an increase in quality as well.”
The effects of the implementation of the Bologna accord –
the harmonisation of Europe’s disparate higher education
due to be implemented in 2010 – continues to have an impact
on thinking in the industry.
Eric Cornuel, director general of the European Foundation for Management Development based in Brussels, says 45 countries have signed up to the accord. However, he cautions that the numbers involved mean it is unlikely the 2010 deadline will be met. “It is not a problem that we are not ready. It is more important to involve more countries and systems and emphasise our own form.”
He would like to see others from outside Europe, such as Asian and Pacific Rim countries, signing up to the accord.
He says a beneficial side-effect of Bologna is that schools are developing other masters programmes to provide alongside the MBA.
“It is a sign of the times. MBAs are still important, but people are rediscovering other programmes.” Mr Cornuel’s observations are timely.
Last month Barcelona Graduate School of Economics was launched. By September it plans to have rolled out five masters programmes, with a further
15 promised over five years.
Schools are growing increasingly aware that the Bologna accord will herald unprecedented changes.
At Cass Business School at City University, London, a Bologna task force has been established to help the school understand the full impact of the accord and develop strategies for its response.
The school already has 24 specialist masters programmes and Mario Levis, professor of finance and associate dean of MSc programmes at Cass, anticipates these specialist programmes will continue to be “a major factor in maintaining our competitiveness in the future, partly because growth is predicted in the masters market”.
One of the attractions of masters programmes, as opposed to the MBA, is their comparative cheapness.
Indeed, Andreu Mas-Colell, founder and president of Barcelona GSE, says one of the core attractions of the school will be its competitively-priced masters. Programmes will cost between €10,000 and €12,000, be a year long and taught in English.
The cost of a full-time MBA programme, especially from those schools at the top end of the rankings, remains significant. However, schools are robust in their defence of the high price. At Tuck School of Business at Dartmouth in the US, for example, dean Paul Danos says an MBA from leading schols provides a “fabulous return on investment”. Certainly his claim is supported by Financial Times research. For example, at Iese Business School in Barcelona, the average salary of students before embarking on the MBA in 2000 was €41,222. According to data from the 2006 FT full-time MBA rankings, the average salary for these same alumni had risen to €89,663.
Other schools have similar increases: at IMD it was €68,994 compared with €112,730 today; at Insead it was €64,028 against €114,303 today and at LBS it was €53,462, against €107,311.
However, the picture is not all rosy. The spectre of faculty shortage continues to haunt business schools.
At EFMD, Prof Cornuel says he is constantly approached by headhunters in search of recommendations for faculty appointments.
“I really start to worry about the possibilities for business schools to implement their strategy if they lack human resources – it is a big issue,” he warns.
He says the picture is the same in the US. “Something must be done otherwise I don’t know if we will be able to supply demand.”
In part, Prof Cornuel blames the dearth of faculty on the fact that professors no longer command the cachet they once did.
“The profession has lost a lot of its social prestige,” he says. Another issue is the lack of remuneration. Prof Cornuel argues that offering tax breaks when gaps in faculty are spotted might be one way of managing the problem.
He also sounds a note of warning on business school funding. Costs are climbing, and two prime examples are e-learning and curriculum development. “These costs have to be faced and I don’t know if budget-wise some institutions will be in the right position.”
But he reserves his strongest criticism for business school curricula.
“The curriculum does not reflect the reality of the economic system we are embedded in today. People are involved far more in services than they are in industry, but business curricula does not reflect this.”
It is extremely important business schools understand that and create a business model that will retain customers and foster innovation, creativity and agility, he says.
At Henley Management College in the UK, principal Chris Bones has come to a similar conclusion.
The school’s EMBA has been relaunched, or, as he describes it, “given a radical overhaul”.
“If you are studying for an MBA it must reflect the current concerns and dilemmas senior managers face today and give you the chance to explore the choices you will face.” At the same time, it must focus on personal development.
The relaunched programme focuses on delivering group working and group assessment, with a consulting project replacing the dissertation and challenge-based activities replacing essay formats.
“We are pushing ourselves firmly into the practice arena and trying to reflect the real challenges facing real executives,” says Mr Bones.
Undoubtedly the growth of demand for business education, especially in India and China, will compel other European business schools to reassess their product. Prof Cornuel believes European schools must act.
“India and China are catching up. They are starting to produce more comprehensive goods and Europe is squeezed in the middle.
“We have to find the right dynamism to address these challenges otherwise Europe will be condemned to being an imitator and that would be a catastrophe for us,” he warns.