The balance of economic world power is changing. Where once the West presided over the global economy, it is now the emerging markets of the East that are closing in on economic dominance. The impact of this shift has been amplified due to the precarious position of certain economies in the eurozone and the slump in various sectors, but what effect is it having on business education?
Traditionally, the search for the best MBA programme would lead students towards the West; for a select few this means the likes of the London Business School and its privileged ties with the financial markets, or the Harvard Business School and its enviable alumni network. According to a survey conducted by the Liga Studentilor Romani din Strainatate, between 22,000 and 50,000 Romanian students choose to study abroad each year in any given subject, and most students apply to schools in the USA, or the United Kingdom, rather than applying to schools closer to home. And students from Asia are doing the same. The Graduate Management Admissions Council (GMAC) reports that currently 57% of applications to MBA programmes in the US are from Asian candidates.
While this tied in with the notion of Western economic strength, it may be the case that continued growth in the East will see more students opting to study in a region where lessons on entrepreneurial success and business development may hold more credibility than outdated Western case studies.
The tide may already be turning. According to the Financial Times top 100 business school rankings, 13 Asian business schools feature in the top 100 - a clear rise from five years ago when only three Asian schools made the list.
Score reports for the Graduate Management Admissions Test (GMAT) - used by business schools as part of their admissions process - also provides evidence of increased demand for these schools. Since 2006, the National University of Singapore has seen their number of MBA applicants from Europe and North America increase more than threefold.
Competition for places is tough, with up to ten applicants for each MBA place. Because of this, some top schools in Asia can afford to be as selective in their admissions process as their Western peers. Though not quite as picky as Stanford, whose current average GMAT score is 726, the Asian schools are not far behind. The Indian School of Business average score is currently 710, and Hong Kong University of Science and Technology averages 670.
The other aspect which is making Asia more attractive is financial, given lower tuition fees at schools in the region. With growing concerns that the fees involved in studying a 2-year MBA at a high ranking US schools are simply too high for many Romanian students, a number of schools in Asia make an affordable high quality alternative. Tuition and living expenses at these schools can often be less than half of what a student can expect to pay at a US institute, and with excellent job prospects the overall Return On Investment looks positive.
So how can Western schools compete? Rather than burying their heads in the sand, a number of schools have forged partnerships with Asian schools to improve their existing MBA courses, and create a more diverse learning experience. MIT Sloan School of Management in the US has a partnership with Tsinghua SEM in Beijing, to offer an international MBA, and Nyenrode Business Universiteit in the Netherlands offers their students two overseas placements, including an Asian module which gives students the chance to study at either the Indian Institute of Management in Bangalore, or China’s Renmin University in Beijing.
Taking things one step further, some schools have set up their own campuses abroad, using the economic shift as an opportunity to gain not only in global recognition, but financially also. Duke's Fuqua School of Business has campuses in China and India, while HEC Paris has operations in Russia and Qatar, as well as Shanghai and Beijing.
However some schools have gone in a different direction by setting up entirely new courses through partnerships with existing Asian schools. The Beijing International MBA (BiMBA) is a partnership between Vlerick Leuven Gent Management School in Belgium and Peking University in China. The course looks to develop business leaders who understand both China's business and political culture, and can apply that learning across the globe. Prospects from graduates are high as last year’s 50 graduates were offered positions by over 250 companies including JP Morgan, Apple, and LVMH.
Professor Bruce Stening of Vlerick is the International Dean of BiMBA and says that this international collaboration is valuable for both schools. “Vlerick benefits from internationalizing its school, gaining not only in profile but also in learning from their Chinese partners vis-à-vis business in the world’s most populous and fastest growing country. Peking University benefits by also gaining transfer of knowledge from a Western business school.”
Stening also argues that the benefits to students are multiple. "Most directly, they get exposed to ideas from a wider range of professors. More subtly, they develop global perspectives based on personal visits.” To underline the global perspectives on business, students visit Romania as part of the International Study Tour for Alumni Global Management. Included in the trip is a tour of the Fengjia Industrial Park – the biggest enterprise invested in by Chinese entrepreneurs in Romania.
There is still a long way to go before Asian business schools can stand shoulder to shoulder with the best of the West. Currently many Asian schools lack faculty members, and as yet do not have the status to attract the best teachers. Some rely on visiting academics to make up their numbers, and have had difficulty in making these roles permanent. But as the regional economy continues to grow, and students continue to head east, lecturers may decide that a change is in their best interests too.
Status is also something which top US schools have in abundance, and it will take time for Asian schools to catch up. But, as the business school rankings show, Asian schools are steadily raisin their game and may not be too far off gaining the global recognition needed to take on the giants.