What will the MBA market in 2013 look like?
Interview Barbara Barkhausen and Barbara Bierach / 01-04-2013
Dave Wilson is president and CEO of the Graduate Management Admission Council, the organisation that administers the GMAT. Nunzio Quacquarelli is the brain behind the TopMBA.com Applicant Survey, the TopMBA Jobs & Salary Trends Report and the QS Global 200 Business Schools: The MBA Employer’s Choice. MBA Channel’s Barbara Barkhausen and Barbara Bierach talked to them about the MBA trends for 2013, growth markets for the degree and the role online education will play in the future.
Dave, what do you foresee as the MBA trends for 2013?
Dave Wilson: On the programme side, I can see five clear shifts. More recognition of the importance of data analytics and how to manage different information sources in business schools; More integration of technology in MBA programmes, both as a subject and as a mode of delivery; More MBA programme formats, such as blended and flexible programmes, as business schools make their programmes more accessible and improve efficiency of delivery; More specialized MBAs as programmes tap the strengths of their universities to differentiate themselves from other programmes; Aside from MBA programmes, more demand for specialised master's degrees in accounting, finance, management, and other business-related fields.
I also see some fascinating shifts in the paths that MBAs and master's degree graduates are pursuing after graduation. As I travel the world talking with schools and students, it is clear that more and more of these graduates are eschewing the conventional positions in the private sector and increasingly are finding roles in not-for-profits entities, NGOs, charities, and the public sectors. All of these are organisations, and all require leadership and management. Without a margin, you cannot execute your mission.
Will 2013 see the full-time (2-year) MBA further declining in favour of part-time and 1-year programmes?
Dave Wilson: Two-year MBA programmes are cyclical in their appeal, far more so than the one-year specialised masters programmes. Applications to full-time MBA programmes, especially two-year programmes, tend to run counter-cyclical to the economy - as the economy starts to decline, applications go up. Application volumes for two-year full-time MBA programmes have fallen from historic highs at the start of the Great Recession, but they didn't fall as hard as was seen in past recessions, and they show signs of stabilising. Globally, these programmes tend to draw much larger numbers of applicants than full-time one-year programmes and part-time MBAs. And there are significant differences by world region. Our 2012 Application Trends Survey showed most full-time two-year MBA programmes in Asia-Pacific (79%) and Central Asia (80%) reported application increases, which is reflective of the demand for business and leadership skills in many of Asia's fast-growing economies.
Talking about regions like Asia-Pacific and Central Asia. Are these the areas where you anticipate the biggest growth market for MBAs in 2013?
Dave Wilson: Some of the world's fastest growing economies are in the Asia-Pacific region. We've seen an increased demand for MBA new hires among firms in APAC - 80 per cent of companies we surveyed in the region were looking to bring on MBA talent in 2012. We also see the number of prospective students sitting for the GMAT exam from these countries moving up at a fast pace. China and India, the second and third largest sources of test takers after the US, combined for more than 88,000 exams in 2012. Vietnam is an example of a smaller market in the region also growing at a fast pace. In five years it has moved from 31st to 21st among all countries in annual GMAT volume. In the Middle East, Saudi Arabia's national commitment to higher education has propelled its citizens to the 10th largest GMAT test taker group. Across geographic boundaries, the greater demand from younger talent and women are driving growth. Prospective students younger than 25 represent 47 per cent of global test takers (up from 38 per cent in 2008), and women account for 43 per cent of the pool (up from 40 per cent in 2008).
Will we see a shift to online education at business schools in 2013?
Dave Wilson: Roughly 14 per cent of global prospective students in GMAC research surveys are considering an online/distance MBA programme. Many of them want to keep working full time, and the format's convenience and completion time are key in their selection criteria. But the more significant shift may go beyond just moving programme delivery directly from the classroom to online. Business schools will continue to explore ways to deliver education more efficiently, with more flexibility, and in some cases, more effectively. Blended learning and massive open online courses are just a couple of methods that schools are exploring.
From my vantage point, I would waive a cautionary flag to aspirants of purely online programmes. Ensure that the programme you enter has the same caliber of faculty and student cohort as the school's flagship programme. I say this for two reasons. First, your faculty and classmates are the critical success factors in the quality of your education. Second, over time, if there is a distinction in quality between one programme and another, the market will suss it out and devalue the lesser programme.
You've mentioned the so called MOOCs - massive open online courses: Which chances as well as threats do they present for business schools in your opinion?
Dave Wilson: With MOOCs, schools have the potential to make their classes accessible to anyone, anywhere in the world. So business schools can expand their reach almost anywhere. I see three Achilles' Heels to the MOOC model. First, I am not sure that schools have figured out exactly how to monetize the investment made in launching and offering MOOCs. Second, there is what I call the Rosie Ruiz syndrome. Ms. Ruiz qualified for the Boston Marathon in 1980 and was the first woman to cross the finish line in a time of 2:31:56, the fastest time for a woman in Boston Marathon history and the third-fastest marathon time for a woman ever. But it turns out that Rosie qualified for Boston by taking the subway for most of the New York Marathon course, and she also got disqualified from Boston for not running the whole way. And to the MOOC, one must ask, "How do you know that the person who took your course is who he or she says or was not aided by a ringer (or a subway)?" And finally, there is the risk to a school's brand through a MOOC offering. Many business schools are already having to monitor the postings and bios of individuals who attended an open enrolment executive course who then claim to be a "graduate". If the MOOC is truly "massive", this monitoring may be impossible.
MBA Channel's trend analysis: Nunzio Quacquarelli from QS
Nunzio, will 2013 see the full-time MBA further declining in favour of part-time and 1-year programmes?
Nunzio Quacquarelli: In fact, this year's QS TopMBA.com Applicant Survey shows that for the first time ever, the one-year MBA program format is now more popular than longer courses. At the same time, although full-time MBA programmes remain by far the most popular delivery method, there has been an increase of interest in programmes that allow students more flexibility in their studying - part-time, executive, distance-learning and online delivery modes.
The global financial situation too is a factor in the rising attractiveness of shorter or part time MBAs - as jobs become harder to come by - or are at least reported as being so in global media -, people become less keen to give up their current jobs in order to study.
However, potential MBA students should always research which programme format is right for them. Shorter MBA programmes are usually more intense, and so a greater amount of work experience is usually required. With executive MBA programmes, the level of work experience required is even greater. Meanwhile, online and distance-learning programmes still retain a stigma amongst many that they are inferior to on-campus alternatives - it's likely that this stigma will reduce in the coming years, but it's impossible to be certain that it won't hinder a graduate's future employment prospects.
Will we see a shift to online education at business schools in 2013?
Nunzio Quacquarelli: It's likely that as technological innovation further improves, online and distance-learning MBA programmes will become more and more respected. We can already see this with the increasing number of top-tier business schools that are beginning to enter the realm of online-education. As respect for this delivery mode improves, so too will employment prospects for graduates, and therefore the attractiveness of the format. It's unlikely that this will happen overnight though.
Talking about online education: Which chances as well as threats does the U.S. based online university courses present for business schools in your opinion?
Nunzio Quacquarelli: It's unlikely that the free format will convert well to business education. People can clearly educate themselves by using the internet, and this certainly applies to business education. In fact, many business schools and lecturers already provide notes for their lectures for free online. However, what's special about the courses on offer at business schools, and in particular MBA degrees, is the ability to learn from others, interact with those providing the learning, and being able put into practice what you're learning. Many online and distance learning programmes have become very good at offering these benefits remotely, but to do so requires a great deal of time, effort and expense from the business schools.
In which regions do you anticipate the biggest growth market for MBAs in 2013?
Nunzio Quacquarelli: In terms of where applicants plan to study, the traditional business education hubs of North America and Western Europe still dominate, and will continue to do so for the foreseeable future in my opinion. In fact, in the QS TopMBA.com Applicant Survey, of the top 10 MBA study destinations, eight were located in either North America or Western Europe. The remaining two being Australia and Singapore.
However, business education destinations such as China and India are becoming more and more popular, particularly with regionally-local applicants. China for instance has experienced a considerable investment of time and money in its business schools, which has resulted in a significant rise in popularity amongst applicants.
Then there's destinations such as South Africa, New Zealand, and the UAE which have become more popular in the past few years. Anecdotal evidence suggests this is a result of a perceived greater value for money, and the opportunity to experience differing cultures yet remain within easy access to home - many Asian students choose either Australia or New Zealand to apply to, while South Africa and the UAE can be very appealing to African applicants.