17/10/2008 | MBA Applications, MBA Programs

Europe Regional Focus

Europe now hosts an array of top MBA programs and is challenging the hegemony of US schools with a different teaching style and, generally, one-year programs. But has the credit crunch affected business school intake and offerings? And what are schools doing to help MBA students and graduates weather the storm?

The MBA is now over 100 years old, but for more than half of that it was largely confined to the USA, and to schools such as Harvard and Wharton that have gone on to become the giants of global business education. Europe’s oldest business school, INSEAD, opened its doors to the first intake of students in 1957 and the continent now hosts MBA programs in practically all of its countries. Almost half of the programs in the current Financial Times top 30 are from Europe. But in a fiercely competitive marketplace, beset by a potential downturn in demand for graduates thanks to the credit crunch, how is European business education gearing up for the challenges and opportunities of the next few years?

Applications on the rise

For the moment it seems that schools on the continent are benefiting from the counter-cyclical phenomenon which pushes up applications from potential students when economies are in trouble. This first became apparent in the post-dotcom slump of 2001 and now seems to be happening again - many business schools are reporting higher application numbers for the third consecutive year. However this level of demand can only last so long, as schools found out to their cost last time round. Eventually, unless aspiring MBAs can be confident in their ability to find a well-paying job at the end of the process, their numbers will begin to tail off dramatically.

At present many of the major European schools seem to be confident about the career prospects of their graduates. Camila de Wit, who heads career services at Spain’s ESADE, says that banks are still hiring albeit in smaller numbers than last year, but that commerce and industry are recruiting at the same high levels as in 2007. She forecasts that European schools will be much less affected by economic turmoil than their US counterparts and that because of the greater diversity of their intake they are better placed to make the most of opportunities in emerging markets.

Her view is largely mirrored by Patrice Houdayer, dean at EM Lyon in France, who reports that, “We have not seen any real negative impact from the volatility of the financial markets. In fact recent meetings with JP Morgan, Lehman Brothers and Dresdner Bank in London confirm that our graduates are enjoying more and more success in Europe.”

The key, according to the continent’s professional recruitment companies, seems to be the production of graduates who have solid pre-school experience and who can hit the ground running with their new employer. “As markets in Europe get tougher organisations are looking for immediate results,” says Graeme Read, Group Managing Director at international recruiter, Antal. “That means candidates who have a track record of achievement in their field. An MBA is highly valued, but not if it’s all an individual has to offer.”

Learning lessons

What have career services learned from the downturn of 2002, and how are they preparing their MBA graduates for the current job market? De Wit at ESADE believes that lessons have been learned.

"Companies have learned from their experience 5 years ago, hence current recruiting caution. Banks and consultancies were burned in the past, and this time they are ahead of the curve. Hiring is based on real needs with little or no speculation. They are looking to identify the most focused and motivated candidates. It is important for MBA graduates to know exactly what they want, and share a compelling story with the future employer.”

Even if employment and application levels are sustained, this does not mean that all players in the business education field will benefit equally. According to Peter Rafferty, Director of International Business at Vlerick Leuven Gent, “The MBA market in Europe is becoming an overcrowded one. Apart from in Germany, where schools are still developing their full-time offer, we’re seeing a lot of consolidation. Some second tier programs are merging or even closing down and providers are increasingly shifting their focus to the executive MBA. We will all need to be more adaptable than ever to the needs of both individual and corporate clients.”