The business education world is looking to Asia for its next big source of growth. The region's economies have motored ahead of the west. As globalization brings business to these emerging markets, education becomes a tool for growth.
More Chinese, Indian and Singaporean citizens are taking the GMAT. The 2015 MBA rankings posted strong gains for Shanghai, Ahmedabad and Hong Kong.
In business education, it is increasingly east meets west. An amalgamation of cultures has become a stamp of quality. MBA programs are a modern silk road.
“In today’s economy, acceleration to the C-suite requires grounding in eastern and western business practices,” says Leila Guerra, executive director of early career programs at London Business School, based in the UK.
China has been the engine of this shift. The past two decades have seen cadres of top western universities launch joint programs with Chinese educators.
European and US business schools are eager to tap into Asia, most muscling into the cities of Beijing, Shanghai and the former British colony of Hong Kong.
“We want our students to have immersive experiences in China,” says Julie Dagonet, associate director of China strategy at LBS. London’s leading business school has joined forces with Fudan University in Shanghai to teach a Global Masters in Management, in both China and the UK.
This will give students exposure to two cultures, more market knowledge and an edge in the jobs market, Julie says.
LBS joins the Fuqua School of Business and MIT's Sloan School of Management from the US, and ESADE Business School in Spain, as some of the leaders of this Asian expansion.
Mainland China is touted as the next big business education market but in wider Asia this is already a reality, says Gloria Batllori, associate dean of the full-time MBA at ESADE. “Schools started their journey towards the region a decade ago,” she says.
The Spanish business school has plans to teach a joint MBA program with Guanghua School of Management that will see students flow between Barcelona and Beijing.
Europe, which has suffered application falls, has meshed with Asian universities as the Continent has become engorged with Chinese capital since the onset of the financial crisis. ESADE is on a long list of tie-ups including those of Audencia Nantes in France and BI Norwegian Business School.
Corporate diversity is a value shared by most businesses and it is no different for the world’s leading management institutes. Asian and western partnerships increase student employability in some of the fastest-growing economies, says Gloria at ESADE.
At INSEAD, a global business school with roots in France, a unique trio of campuses in Europe, Singapore and Abu Dubai provides an ideal path to an international career, says professor Ilian Mihov, INSEAD’s dean.
Singapore has been one of the school's strategic priorities. Singapore‘s government is trying to create an environment which entices companies to place their Asia-Pacific headquarters there, says Ilian. “It is a perfect location."
A campus in Singapore allows INEAD to thrive on diversity not found elsewhere in Asia. Of all of the business school’s MBA students who landed jobs in Asia-Pacific, 43% found fortune in Singapore, compared with just 12% in China. “If we were in Hong Kong or China, it would be very challenging,” says Ilian.
The rise of the Singapore’s MBA market has been rapid. Along with INSEAD, the city-state is home to high-ranking National University of Singapore Business School and Nanyang Business School.
Both have close links to the west. NUS, for instance, offers a suite of dual programs with partners including French school HEC Paris and Yale School of Management in the US.
This western influence stimulates the learning environment, increases competition and provides students with exposure, says Susanna Leong, vice dean of graduate studies at NUS Business School. “Many see Singapore as a gateway to Asia,” she says.
The strength of the country’s business schools is a blessing for some but a curse for others. Some believe Singapore poses a threat to education markets nearby. “Singapore’s a big problem for all of us,” says Ajit Rangnekar, dean of the Indian School of Business.
Its strength might explain why Singaporean managers tend to study domestically. According to data compiled by the Graduate Management Admissions Council, in recent years as many as 40% of GMAT takers have opted to study locally.
This compares favourably with markets like China, where a mass exodus has seen students flood into the US.
For Asian business schools to sustain growth they must recruit more international faculty, but India in particular faces challenges in attracting talent. “We end up losing a lot of faculty to Singapore... We cannot compete on salary alone,” says Ajit.
High-ranking business schools like ISB and the prestigious Indian Institutes of Management have enjoyed rising global profiles, but those further down the chain have begun to struggle.
There has been a mushrooming of lower-quality business schools in India, many of which have been forced to close as workers have spurned MBA-equivalent degrees as the country’s economy has slowed down.
India’s massive population ensures there is no shortage of talent, but foreign managers have not embraced its business schools in great numbers. “India is not seen as a favoured destination,” says Ajit.
If these are the challenges that Asia’s business schools face, they are not being felt in Hong Kong. The Chinese territory has a triple threat – its relationship with mainland China, a large and accountable financial sector, and a start-up scene that is fast on the rise.
Top western business schools are looking to Hong Kong as a route to mainland China, but with more market freedom. This includes the US' Kellogg School of Management, whose joint EMBA program with HKUST Business School is ranked second globally.
Hong Kong’s business schools are able to profit from a thriving financial services sector.
About 70 of the world’s top 100 banks have established a presence in the territory, employing 230,000 people, says Jitendra V Singh, dean of HKUST Business School, citing government figures. “We are ideally placed to meet the recruitment, training and development needs,” he says.
The territory’s universities also benefit from close proximity to mainland China and their western partners.
Managers from the mainland flock to Hong Kong to look at their economy from the outside, and to learn the business methodologies of the west, says professor Eric Chang, dean of the faculty of business and economics at the University of Hong Kong.
“The increasingly close interrelations among different economies make it essential for business students to have international perspectives, and [a] global sense of judgment,” he says.
But there is also a feeling that China’s openness to these international institutions is a bid to modernise its higher education system, which is criticized as suffering from political interference. “Education institutions must retain full control over what they do, which is not the case in China,” says Julie at LBS.
EMBA students at top Chinese business schools have been forced to withdraw from their programs, part of a government clampdown on alleged corruption. There are also quota systems which limit the number of students that can begin MBAs degrees.
While there are about 236 Chinese business schools which collectively produce about 30,000 MBA graduates each year, this is a tiny portion of China’s giant management population.
When China was a low-cost manufacturing hub, modern management techniques were not perceived as a necessary component of companies’ growth, says Roy Chason, assistant director at China Europe International Business School in Shanghai.
“But as the market becomes more competitive [and] wages increase, and Chinese companies have to innovate and globalize, they are beginning to understand the importance of well-trained talent,” he says.
China is still a large contributor to the pool of globally-mobile business students, but countries across the Asian region are on the cusp of internationalization.
“The opening of the campus in Singapore was the recognition of the rising importance of Asia in business,” says Virginie Fougea, an associate director of admissions at INSEAD. “Since then, interest in studying in the region has increased immensely.”