27/03/2009 | MBA Careers, Career Opportunities

The MBA and the recession – frequently asked questions

Ross Geraghty, managing editor of the TopMBA Career Guide, answers the pertinent questions put to him in February 2009.

Is there more MBA interest and applications during periods of economic crisis?

MBA education is counter-cyclical, meaning that during an economic downturn such as we’re facing today, there are several ambitious professionals considering their positions and how best to progress their careers for when the inevitable upswing occurs. QS, as the world’s leading experts in the MBA and career space, as well as most of the schools attending the QS World MBA Tour, have reported a significant spike in interest in and applications for MBA programs. This shows us that the MBA is just as relevant now as ever before.

Why would one do an MBA during a period of economic crisis?

As people leave jobs, particularly in finance but also in other industries, as a result of the economic crisis, an MBA is a fantastic option to put ambitious leaders in a stronger position to secure a better management position in a year or two. Some see this as ‘riding out the storm’ in business school, but for most people it’s a lot more strategic than that. If you have lost your job as a result of the downturn, or perhaps simply see that in a year or two the economy is going to need more business leaders than ever before, which is probable, getting into business school is more than a viable option. The QS World MBA Tour is the place to start your search.

Where do applicants come from?

MBAs come from all walks of life and for all sorts of reasons. Naturally there is a high proportion of people from within finance and consulting and other fields in business. At the same time MBAs come from medical, legal, media and broadcasting, self-employed, insurance, and all sorts of fields. Doctors want to learn how to run their surgeries more efficiently, lawyers their chambers. TV production managers want to run TV studios. Entrepreneurs want to improve several aspects of their businesses. There are people who want to continue in their professions at a higher level, those who want to learn about business practices within their industry and those who want a complete career change.

Do the contents of an MBA adapt to the economic crisis context?

It is clear that during a recession, the content of courses is bound to change. This is partly due to the fact that professors involved in MBA courses will create case studies or discussions on real-life situations that failed, such as Enron or the sub-prime lending in the US. Also, MBA programs are centred around the students attending the courses as peer-to-peer teaching is valued highly at business school. As most students on this year's programs will have experienced the downturn to a greater or lesser extent, this is going to rapidly alter the tone and content of the debates that form such a large part of the MBA experience.

Regarding financing an MBA, what is the context today? Anything new?

How to finance an MBA is the question QS experts are asked most often. Our research suggests that schools are, generally, cutting down the amount of money they are providing in scholarships this year, and perhaps into 2010. This makes business sense of course, and is undoubtedly a short term situation. However scholarships do still exist. The QS World MBA and World Grad School Tour is offering US$1.6million to attendees at our events, to some of the best schools in the world, including Wharton, Chicago, Cass and IE. As for banking loans, the indication is that, while it is harder to secure loans in some places, MBA graduates are largely considered safe bets so banks are not seeing them as a risk and loans should still be possible to find.