Business school applications have long been considered counter cyclical to the economy. As economies begin to weaken, business schools attract more candidates. But as the global recession drags on, GMAC’s 2010 Application Trends Survey presents a more complex picture.
“Last year, the financial crisis brought more people to seek further education. This year, as the economy picked up, the applications are more realistic─people who really intend to and are serious about pursuing postgraduate education, such as MBA,” according to one survey participant quoted in the report.
Overall, out of the 665 graduate management programs at 327 business schools in 39 countries surveyed, half show an increase and about 40 percent show a decrease in applications for the incoming 2010-2011 class as compared with last year.
But breaking down the big picture, economic impact on application volume varies substantially by program type:
- As more senior managers seek new knowledge and skills, the biggest volume increases among all MBA programs came from executive MBA programs, with 59 percent receiving more applications this year than last, reversing a three-year decline. In 2009, just 37 percent of EMBA programs reported increases from 2008.
- Applications to full-time MBA programs continued to show signs of softening from a 2008 peak, with 47 percent of programs reporting fewer applicants this year than last. Just 44 percent of full-time MBA programs reported an increase in applications, down from 66 percent last year and 70 percent in 2008.
- Roughly equal percentages of part-time programs reported application increases (43 percent) as declines (44 percent), similar to 2009. Yet the figures vary greatly by region, with just 39 percent of US part-time programs reporting application gains vs. 62 percent for other world regions. Within the US, 67 percent of part-time MBA programs in the Northeast recorded gains, compared with 26 percent in the South.
- More than 60 percent of master-level programs in finance, accounting, and management, which traditionally draw younger students than MBA programs, reported application increases, with the average volume increasing last year by 20 percent or more.
- Within full-time programs, there is even more variation linked to program length.
- More two-year full-time programs (49 percent) showed a decrease than an increase (41 percent) in application volume, continuing declines seen in 2009. In both the US and Asia-Pacific region, where most full-time programs are two-year, roughly four out of 10 full-time programs saw increases. Fifty-three percent of US full-time programs reported application declines.
- On the other hand, about half (49 percent) of full-time one-year programs reported application growth and 43 percent reported declines, similar to last year. In Canada and Europe, where one-year full-time programs predominate, 62 percent and 53 percent of full-time programs, respectively, saw application gains.
Application volume fluctuates as the economy and personal factors change the opportunity cost equation, notes Dave Wilson, GMAC president and chief executive officer. “People can always derive great value from going to business school; our surveys attest to this fact. But many changing factors affect the kinds of programs that best meet their needs. Applicants need to find the very best fit for their own game plan.”