Sitting down with Sangeet Chowfla, Graduate Management Admission Council (GMAC) CEO, and Bill Boulding, the dean of Duke University’s Fuqua School of Business and, as of July 1st, new chairperson of the GMAC board, the pressure on business schools to adapt to a new era becomes clear.
In the quaint interior of the Zetter Townhouse in Clerkenwell, London, we meet for a fireside chat about the latest developments in business education. It’s a muggy June morning in London. The fire is off, thankfully, but its presence stokes relaxation; an opportunity to talk honestly about the challenges ahead.
Sangeet arrives first, dressed in a black suit jacket, open collared: business. Bill is delayed, but what’s a commute in London without the odd transport interference?
He arrives bespectacled and softly spoken, exuding the charm of an old-school professor modernized for the 21st century.
The two bounce off one another seamlessly, confident that their mission statement is joined at the hip. We speak about the latest business education trends—a geographic shift in demand, for example; why unlocking global human potential is intrinsic to economic vitality; and why they believe business is a force for good.
Sangeet starts with a stat. He tells me that at any given point there are six million people considering business education around the world—an astounding figure.
Thus, the business schools that serve those six million potential candidates have a responsibility to provide the knowledge, infrastructure, and harmony for candidates to meet their goals come graduation.
The global pool of potential candidates now has a wealth of options to choose from, but that wasn’t always the case. We’re now entering the third phase of business education, and supply and demand reach far beyond the roots of graduate management education (GME).
“Over the years, the world of management education has transformed hugely,” Sangeet says.
The “first phase” was primarily a product of western business schools for western audiences; in the post-war era, Sangeet says, the US had 70% of the world’s invested capital and two-thirds of the world’s GDP.
Phase two came when demand became more global—the US remained the prime location and so there was an influx of candidates travelling from the East to the West to assimilate the high-quality supply of business schools there.
Phase three has proven that graduate management education is a “global phenomenon,” Sangeet says. The shift since the turn of the century has displaced the US as the sole guarantor of business education.
In the Financial Times’ Global MBA Ranking 2000, 45-out-of-74 schools were based in the US, with only one from Asia—Hong Kong University of Science and Technology (HKUST).
In the most recent ranking—in 2018—50-out-of-101 schools were based in the US, but there were 10 Asian based schools—seven in China and three in Singapore.
“Now, the US has less than one-quarter of the world’s GDP and less than one-fifth of global invested capital,” explains Sangeet. “Everybody else has caught up, and students now have a choice.”
The MBA is the focal point around which business education orbits. The rise of the one-year MBA has added to woes in America as the two-year programs there are being shunned for shorter degrees overseas.
Sangeet admits to being asked whether the MBA in the US is dead. His response? “The demise of the MBA is exaggerated. It’s not dead, it’s just relocated to Asia.”
In the completed admissions year of 2017, only 38% of Full-Time MBA programs in the US indicated a growth in applications—that’s in contrast to more than seven-in-10 programs in Canada, the UK, and Europe, and eight-in-10 programs in Asia reporting growth. On an aggregate basis, there has been a global increase of 6% in the number of applications to MBA programs.
US Against Them
Politics is pertinent to the business school admissions space—a drop in external applications to the US has coincided with anti-immigration rhetoric and the ‘America First’ policies of the Trump administration since he took office in January 2017.
The latest GMAC Corporate Recruiters Survey (above) also revealed that over half of the respondent companies in the US do not plan to hire international graduates in 2018—only one-quarter said they are committed to international hires.
The current climate is a big issue, says Bill. “When the deans of US business schools gather we feel the number one threat to our vitality is the current issue around students coming from outside the US.