With the US economy slowing down and prices for higher education rising, students are increasingly questioning the value of a traditional business school degree. Meanwhile, online learning is booming as costs come down and the technology improves. But will advances in online learning disrupt the MBA?
By some metrics, the MBA is already falling out of fashion. The Graduate Management Admissions Council says applications to MBA programs fell in 53% of US business schools this year.
Conversely, the number of distance learning students is up by 3.9% year-over-year, says the Online Learning Consortium.
Nearly six million students are going viral. Rather than making a significant investment of time and money in advanced degrees, students are increasingly using stackable courses like Moocs and certificates to create their own customized educational packages. These aren’t degrees but instead are hybrid credentials that focus on specific niches such as project management or data science.
One of the most innovative offerings is the MicroMasters credential rolled out this year by edX, the non-profit online learning venture founded by Harvard and MIT Universities. Priced at 800 to $1,400, MicroMasters translate to one-quarter to one-half of a master’s and create a pathway to credit for traditional campus degree.
Another option are the “Specializations” offered by Coursera in business, computer science, data science, and more. Specializations are developed by top-flight schools such as Stanford University and Wharton, but are without the commitment or price-tag of a full-time degree program.
These online credentials signal to employers that you have a particular skill that is in-demand, says Vish Makhijani, COO of Udacity, which offers a series of “Nanodegrees” designed by companies including Google, Facebook and Salesforce.
A Career Advisory Board survey of 500 US hiring managers found 87% were likely to consider non-traditional micro-credentials as valuable. There’s particular demand for such qualifications in tech fields.
Yet while showcasing expertise in specific areas, online credentials do not yet carry the same weight as an MBA at a top flight school. Schools say online programs cannot match the rigour or networking opportunities of their campus courses. Many employers have also been sceptical of online learning and some may even see it as second-rate.
But the stigma once attached to online learning is beginning to fade, as big-brand universities explore nano-degrees and as more online degree recipients enter the workforce. “Momentum is growing,” says Patrick Mullane, executive director of HBX, Harvard Business School’s digital learning initiative.
The chief culprit of the pivot to customized online education is the rise of the so-called “gig economy”, in which professionals are changing careers often, juggling multiple jobs and perhaps even being their own boss.
In future workers will have what Tony Sheehan, associate dean for digital learning at London Business School, calls “portfolio careers”.
Already, people are moving through industries, functions and geographies more frequently — MBAs call this the “Triple Jump”. A study by LinkedIn found that millennials switch jobs four times on average before they turn 32 — nearly double the baby boomer generation that came before them.
This means they are having to re-skill. Professionals need different types of learning at different phases in their careers. “It is no longer sufficient to have a business degree on your CV. Employees need to be constantly updating their skills,” says Mike Feerick, CEO of Alison.com, which has eight million online learners.
That means the way universities deliver education is going to have to change. Schools will have to continuously adapt both the content they deliver and the way they deliver it. Learning will need to be distributed both online and on-demand. In future, content should be supplied throughout a graduate’s career. “The monolithic two-year-long master’s program — that concept will change in the near future. Things will be more nimble and flexible,” says Anant Agarwal, edX CEO.
He says education will be “unbundled”.
As the balance of power shifts from universities to consumers, new hybrid models of education are already beginning to emerge.
One of the best examples of the sea change underway in education are the “blended” MBA programs now offered by a slew of the world’s top-ranked business schools. At Babson College, the Blended Learning MBA program combines online classes, face-to-face campus sessions, and virtual collaboration. “We provide flexibility but still have an intimate, high-touch environment,” says William Lamb, the school’s dean.
Meanwhile, University of Michigan’s Ross School of Business made headlines when it announced it would offer executive education courses to all its graduates online for free, for the rest of their lives.
The danger for universities that do not innovate is that they may be left behind as edtech gradually alters the education system. James Henderson, head of innovation at Swiss business school IMD, says: “Business schools that don’t continue to develop their digital offering can be supplanted by new players.”
Today’s learners are looking for specific career outcomes and metrics to communicate the value and back up the price of their education. In times of economic strife, the $200,000 price-tag for a traditional MBA program looks increasingly dear.
“Most people simply cannot afford to take two years out of the workplace,” says Graham Hastie, assistant dean for degree programs at INSEAD business school.
Ultimately, it is a blended approach to business education that will prevail. Many institutions are using online learning to raise the bar on campus. Technology is changing how faculty interact with students and disperse course content. Some universities already require students to master material before class; lectures are reserved for discussion and the comparison of perspectives.
Geoff Garrett, the dean of Wharton School, says: “With technology we can innovate in terms of best pedagogical practices on the fly, in real time and at a scale that has never been possible before.”
While edtech is clearly disrupting the MBA, it won’t replace it. Online learning should not be seen as a substitute for face-to-face interaction, but rather a complimentary aid, notes Julia Stiglitz, vice president of Coursera for Business.
She says: “Traditional degrees will remain as relevant and important as ever for the foreseeable future, but online learning will continue to emerge as a new category.”