The shifting landscape of management education

I’ve worked in management education for over 15 years and continue to do so because I believe that developing management talent is important, the need is universal and growing, and that how we develop talent will continue to evolve. While educating managers is expensive, not educating them is even more costly – to the individuals they manage, the companies they run and the societies in which they live.

All of this said, the management education landscape is evolving rapidly, offering both opportunities and threats for universities and their business schools. New players are entering the market and students have an expanding array of offerings – and providers – from which to choose.

The need for internationally savvy managers is also increasing, society is questioning the value of what business schools produce in terms of research and student skills, and technology is changing the way we think about and deliver education – and has the potential to create new winners and losers in the marketplace.

This article is the first in a series exploring the global management education market and will focus on the size and shape of the market, as well as some of the shifts we’ve witnessed in the recent past. Future posts will delve into a wide array of ideas and issues impacting business schools. Let’s begin.

In case you haven’t noticed, management education is big business.

There are nearly 16,000 business schools across the globe, offering undergraduate degrees, an alphabet soup of masters degrees (eg, MBA, EMBA, MIM and MFin), certificates, and non-degreed executive education.

And these degrees are quite popular. For example, in the United States, business is the most popular undergraduate major, representing just under 21% of all bachelor degrees. At the masters level, business degrees account for more than 25% of all degrees conferred.

More players and more global

The business school landscape is large, growing and increasingly global. According to the Association to Advance Collegiate Schools of Business, in 2005 there were an estimated 7,622 educational institutions offering business degrees, with 20% of these schools operating in the United States, 18% in Mainland China, and 14% in India. By 2014, the number of institutions offering business degrees more than doubled – to 15,731.

Which country has the most business schools? It’s India, with 3,902 business schools, representing 25% of all business degree-granting organisations in the world. Compare this to the estimated 1,624 business schools in the United States, 1,259 in the Philippines, 1,082 in Mainland China, and 1,000 in Mexico, and together these countries host 56% of all business schools across the globe.

Beyond business schools, continuing education units are increasingly getting into the game – as are consultants and training firms.

Training Industry Magazine estimates that the 2013 global market for training expenditures was nearly US$307 billion, with North America accounting for 46% of the expenditures, Europe another 29%, Asia another 10%, India approximately 7%, and the rest of the world accounts for the remaining 8%.

Approximately one third of company training expenses are estimated to be for management education and skills training.

Corporations are doing quite a bit of management education, often cherry-picking top faculty members to teach in their corporate universities and supplementing with other educational staff and online vendors.

GE spends US$1 billion on employee development each year, much of it on leadership training – which is often seen as the purview of business schools.

Infosys, another corporate giant, employs more than 600 full-time employees as educators, and provided more than 2.33 million days of training to its employees in 2014. Much of Infosys’ training is IT-related; however the company also created the Infosys Leadership Institute in Mysore, India, to enhance employee business and management skills.

US influence waning

While the United States has traditionally been the most popular destination for international students, this is changing as business schools in other countries take root and grow their reputations. According to the Graduate Management Admission Council, US business schools received 74% of GMAT score reports in 2013, down from 78% in 2009.

The international rankings of top business schools also show a shift, with the US losing some of its patina as the country with the best business schools. In the 2002 Financial Times ranking of business schools, 73% of the top 30 schools were in the US, 23% in UK-Europe, and 4% in Canada. In 2015, it’s a very different picture – 50% of the top 30 schools are in the US, 33% in UK-Europe, 14% in China and 3% in India.

Another measure of influence, best-selling business books, is also shifting – this time away from business schools. Looking at the New York Times list of Top 10 Business Books reveals that only one of the books is written by a (former) business school professor – and 90% are not. So much for all of the business school research making its way into the corporate world to improve the practice of management.

Business schools have some difficult challenges ahead. In future posts I’ll explore some of the ongoing and nascent challenges facing business schools, including technology and other potential disruptors, new players and new offerings, evolving student and employer needs, new programme formats, and lifelong learning – among others. Thank you for being part of the discussion.

Margaret Andrews is an academic administrator, instructor and consultant. Academic leadership positions include vice-provost at Hult International Business School, where she manages a global academic team across five campuses in four countries; associate dean of management programs at Harvard University’s Division of Continuing Education, or DCE; and executive director of the MBA Program at the MIT Sloan School of Management, USA. She teaches a variety of leadership and strategy courses at Harvard DCE and is also the managing director of Mind and Hand Associates, a boutique consulting firm serving a global higher education clientele. You can reach her at margaret@mind-and-hand.com.