Trends and developments in the worldwide MBA market
by Brigitte Fournier
A substantial number of institutions are on the search for an ideal MBA formula, and within this European schools have serious chances of coming out ahead.
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n the face of stagnating application numbers, multiplying pedagogical formats, the race for accreditation, general vagueness surrounding the MBA ‘brand’, and concern by directors of MBA programmes confronted with a more enduring sluggishness than expected, a study undertaken by our agency reveals that the MBA market is teeming with initiatives, despite a contraction of application volume.
Supply and demand paradox
For several years now, without many believing that it will endure, the number of applicants for MBAs on all continents has been declining. This affects all, including the best North American universities, which have suffered from the same concerns as programmes with principally local recruitment. The underlying explanations for this are several: inflation in registration fees, stagnating post-MBA salaries, and the effect of measures such as the Patriot Act in the US etc. At the same time, supply has never been so vibrant: the number of MBA branded programmes in Europe went from 220 in 1999 to more than 400 in 2004. Alternatives to the full-time model (accelerated or part-time programmes,
Executive MBAs, specialised MBAs) are experiencing growing success. Between sluggish demand and thriving supply, the market is in paradox. This development has proved itself sufficiently durable so that some programmes have opted to reduce application requirements in order to fill their promotions. This affects the number of years of professional experience requested of applicants: three-quarters of MBA programme directors confessed to asking for less professional experience than in the past. Obviously, classic MBAs will not disappear tomorrow. On the other hand, the desire for serious changes to its form and substance seems clear in applicants. Attesting to this, nearly 90% of Deans surveyed judged that growth for the classic full-time MBA model will slow in the coming years. To believe them, it is Executive MBAs, part-time and specialised programmes that will come out ahead.
that the European models offered credible alternatives, this could become seriously threatening for US schools. Witnessing a considerable number of their applicants turning towards Europe – particularly those candidates coming from the Middle East – Americans acknowledge the threat. More innovative in terms of form and teaching methods, less expensive and shorter, the appeal of the European MBAs is also that they are more vibrant, more international and more culturally open than their North American equivalents. Once the European market reaches a certain level of maturity, the upheaval will certainly have its victims and some initiatives are destined to fail. That said, the innovation has partly changed the playing field.
The future of MBAs
It would be wrong to overstate the US ‘decline’. This remains relative and the Anglo-Saxon market is still quantitatively and qualitatively dominant. In addition, the explosion of the MBA model into several models with ill-defined parameters could have an impact. Many, on both sides of the Atlantic, suspect that by accommodating all, the MBA brand is in the process of losing some of its value. Only time will allow us to distinguish the durable initiatives from passing ones. At this turning point, several questions are unanswered: what role will states play in the market, their policies not being neutral? In addition, the consolidation of forefront economies, such as in China and India, will automatically lead to a demand for highly qualified managers by companies in these markets. While this demand may be met first by Bachelor or Master’s qualifications, the need to train the elite will follow and the MBA market should experience new increased demand. European business schools must not miss this next development. Brigitte Fournier is the founder and director of the Noir sur Blanc agency, www.noirsurblanc.com
European MBAs are more vibrant, more international and more culturally open than their North American equivalents
The card in the hand of the European model
In this context, European institutions very clearly have the cards in their hand. The Anglo-Saxon MBA market, having long dominated, is now seriously challenged by the emergence of alternatives from Europe and Asia Pacific. This was acknowledged by 78% of those surveyed. Given that seven out of ten also deemed
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