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Trends & Analyses:

Increase in MBA Demand

...there has been a marked increase in demand for a MBA education since 2006. This increase in demand is seen in all categories of MBA education.

With globalization, there is an international move toward university and post-graduate education. This development is profound in the global MBA market. With this move, there are some generally shared trends that are and will be impacting the MBA student and market. This article is the first in a series about these MBA trends both on a global and a local market level.

Student Demand is Increasing
According to a report done by the Graduate Management Admission Council--a global nonprofit education organization--there has been a marked increase in demand for a MBA education since 2006. This increase in demand is seen in all categories of MBA education. Whereas there was an annual average decrease of at least 10% year over year from 2003 to 2005, there has been a composite average increase of 42% in 2006 and 41% in 2007 when accounting for full-time, part-time, and executive MBA programs combined. With the increasing interest and demand for a MBA education, there has been a marked decrease in the number of applications to the PhD program for the 2007 academic year. According to GMAC, there was a 12% decline in applications in the U.S. market and more than 4 times that decrease in other markets (1).

Following a basic tenet of any MBA program, the supply and demand must equalize. This factor was found to be a key issue regarding trends in MBA education. One prescient report in 2003 notes that, "the current higher education infrastructure cannot accomodate the growing college-aged population and enrollments (2)." As a result, the strong growth in demand has been marked by significant growth in MBA education options internationally. For example there were more than 8 times as many new MBA or MBA-type programs introduced in the first 6 months of 2007 than there were in the entire 12-month period of 1997 (3). This explosive growth can be seen around the world.

For example, in Russia there are estimates ranging from 6,000 to 7,000 MBA students studying in-country every year with the large majority of those being in Moscow (4). Like other markets, Russia has local programs, western universities, and combinations of the two popping up throughout the world. These students are studying in more than 60 MBA programs in addition to Western and other institutions offering programs in the country where they are based. New offerings in Moscow are being made available through providers that have been in the market for some time such as Mirbis. New universities are being established with corporate backing like the Skolkovo School of Business. New non-internet-based distance-learning options such as MBA Start have launched. Also, highly innovative e-learning MBA offerings from Indiana Wesleyan University have recently entered the market through a partnership with VLC and GHP.

Employer Demand is Increasing
In a revision to his best-selling book The World is Flat, Thomas Friedman encourages readers to improve their knowledge in whatever way necessary including returning for post-graduate education. While many are applying this in the U.S., an even faster growing number of professionals are following the same course of action internationally. As a result, employers are beginning to have opportunities to use the MBA as a screening tool in some instances. For highly ranked consulting firms like McKinsey & Company and innovative companies such as the search-engine giant Google, MBA graduating classes are optimal places to find new professional staff. This trend is starting to be felt far outside the consulting realm as companies in a range of industries such as telecommunications, finance, manufacturing, etc., are looking at MBA graduates and experience as a necessary requirement or a highly helpful determinant when examining candidates to join the management team.

(1) "Application Trends Survey" of the Graduate Management Admission Council, 2007.
(2) "Thirty-two Trends Affecting Distance Education: An Informed Foundation for Strategic Planning" in the Online Journal of Distance Learning Administration, Volume VI, Number III, Fall 2003, State University of West Georgia, Distance Education Center.
(3) "Application Trends Survey" of the Graduate Management Admission Council, 2007.
(4) "Сколько получает в России выпускник MBA?" on www.mbatoday.

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