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Technology Sparks Renewed Demand For Executive Education

Innovation in corporate teaching and fast growth in emerging economies have sparked a renewed demand for executive education.

Wed Jan 14 2015

Executive education is beginning to boom. Interest in big data, social media and technology training – and growth in emerging market economies – has fuelled a surge in demand for courses at companies and government departments.

Managers are also increasingly turning to part-time study as wage growth has slowed, which is forcing others to stay in the workforce altogether for fear of losing career momentum.

An increase in the provision of executive courses means more diverse content for students. For business schools, it means ambitious expansion into new countries.

Through 2014, Asia has increasingly drawn the attentions of western schools, particularly in China and more recently Malaysia and Indonesia, while Africa has also proved to be a promising potential market.

As emerging economies in these regions grow and their businesses expand, companies invest in training their talent.

“As they are facing new opportunities and new challenges, they need people to manage those challenges and opportunities,” said Inge Kerkloh-Devif, executive director of global business development at HEC Executive Education, last year.

Executive education lost favour during the financial crisis as corporations cut costs – but there has been a revival, with global growth in the training of executives.

“We have realized an increase in our Indonesia executive education client base,” said Dr Ian Williamson, associate dean for international relations at Melbourne Business School. He added that efforts to expand into southeast Asia’s largest economy, a strategic priority, have generated “very successful results”.

“One of Indonesia’s largest national corporations has partnered with us to develop their senior managers,” he said. “This is one of a number of long-term relationships that we have cultivated.”

“Because Indonesia is a popular country for contract manufacturing, due to its relatively low labour costs, it is a favourite destination for foreign multinationals,” said Angeline Chivapathy, MBA program director for Edinburgh Business School in Malaysia.

China is also a growth area. China’s burgeoning market for English language degrees has seen western business schools strike deals to teach large corporations.

California’s Haas School of Business in May landed a contract to teach Chinese leaders at an executive leadership centre in Shanghai, according to a memorandum of understanding signed by both organizations.

The courses will focus on current issues in business, innovation and public policy. “The partnership is a win-win situation,” said Professor Teck Ho, faculty director of Haas’ Asia Business Center.

According to a recent survey by Chicago’s Booth School of Business in the US, growth in executive programmes at 11 top US schools rose by nearly 5% over two years.

Andrew White, associate dean of executive education at Oxford’s Saïd Business School, in 2014 said that revenues from custom business had risen from $9 million to $15 million in a year.

The Middle East in particular has proven lucrative for many European business schools in recent years.

London Business School in 2013 won a $38 million contract to deliver a leadership program to managers at the Kuwait Petroleum Company, a subsidiary of the Kuwait Investment Authority, the country’s sovereign wealth fund.  

“We already have major clients in the region, some of [them] very long standing,” said Sir Andrew Likierman, dean of LBS.

HEC Paris, the French business school, has contracts in Qatar – a complete portfolio of programs – and recently launched its first executive master’s degree in Azerbaijan.

ESCP Europe, the business school with campuses across the Continent, recently struck a deal to teach employees of Indian Railways, the trains enterprise owned by India’s government.

Africa too has taken to executive education, with sub-Saharan companies employing European and US business schools to educate their management teams.

Duke Corporate Education, owned by America’s Duke University, trains various African clients including banks, natural resources companies and telecoms businesses.

HEC Paris recently signed deals with some of Ivory Coast’s state departments – and a federation of private companies – to lead programs for hundreds of public and private sector executives.

Inge of HEC Executive Education said that programs of a similar scope typically yield €1 million in revenue.

“There is a huge potential market for business schools [in Africa],” said Dr Barbara Drexler, associate dean of international affairs at Frankfurt School of Finance and Management.

The German business school founded the Central African Business School in the Democratic Republic of the Congo in 2013, and delivers a range of executive programs that enable “international companies to educate and train their executives”, said Barbara.

“As many international companies open offices, branches or plants in Africa, the demand for business education increases,” she added, including “banks and other financial institutions [and] advisory firms”.

Advances in technology have led to innovation in the teaching of corporate managers. Larger audiences are now being reached with relative ease, opening up the market to new clients.

According to Bersin by Deloitte, a subsidiary of the leading consultancy firm of the same name, the corporate training market is worth $70 billion in the US alone.

Henley Business School last year won a contract to train the Financial Conduct Authority, the UK’s financial regulator, with a course that will be taught through distance learning.

The FCA said in an emailed statement that the cost of this program is “comparable to that of a specialist MSc course”. Henley's other MSc programs cost up to £18,000.

EdX, a learning technology group, in 2014 ran a pilot course on big data that enrolled 3,500 people from more than 2,000 organizations including Microsoft, which grossed about $1.7 million.

Another online learning provider, Udemy, launched Udemy for Business in 2013. It has grown to have more than 350 partners including Oracle Corporation, the computer tech giant, and licenses content for $29 a user per month.

Coursera, which also provides online programs, landed a contract with internet giant Yahoo which covers the cost of its employees’ certificates - usually $49 for each unit.

C3 Energy, the software company, is similarly paying for employees to take a Coursera-hosted machine learning course, said Daphne Koller, president of Coursera.

However, critics of online learning have said lower cost structures will eventually shift executive education from a business-to-business market to a business-to-consumer market.