When London Business School's MBA programme was ranked the top MBA in the world by the Financial Times back in 2009, it was the beginning of a new era of business education. The student body at LBS was 91% international, while 84% of its academics were from outside of the UK. The recent first place ranking of Insead, another proudly global institution, confirmed the trend.
The corporate world was going global, with Africa and Asia leading economic growth. The ranks of middle class professionals fine-tuning their corporate skills were becoming more diverse and business schools were adapting their programmes in response – just as they were doing with the rise of the technology industry, which brought with it a more agile approach to doing business.
A year and a half ago it was difficult to imagine how these trends could be impeded. Yet a populist insurgency in the US and UK, markets that provide eight of the FT’s top 10 MBA schools, rocked their liberal political establishments. The campaigns voiced by Vote Leave in the UK and by Donald Trump’s US presidential campaign found little backing in academia or established corporations, and both are concerned about the potential impact of Brexit and the Trump presidency.
For business schools in the UK and the US, there is already evidence that fewer international students are applying there following the EU referendum and the election of President Trump.
This is a real problem. Although many corporate leaders and educators look at diversity as an issue that requires lip service, the more progressive recognise it as a competitive advantage. International diversity is valuable to every company and every classroom. The new global economy requires companies to scale quickly and enter new markets, so knowledge of different languages and cultures is a priority.
So too is talent, which is evenly located but not universally enabled. That’s why we founded Prodigy Finance a decade ago, to remove the financial barriers that prevented students from studying at the world’s top universities, regardless of location. After all, education like technology is about unleashing potential.
The effect of changing business and political norms will not be evenly felt. Premium institutions like Insead, Cambridge Judge and London Business School will be unaffected, as their brands are international and transcend local recruiting practices. These top institutions may even embrace the change as an intellectual challenge and opportunity for fresh and relevant research, even as the distance between them and the rest of the field grows.
But mid-tier, respectable schools are suffering as education becomes a commodity. The appeal of local institutions in the US and UK will wane if they are unable to place their international graduates in local jobs as a result of protectionist government policies.
What can business schools do?
For business schools, playing it safe is becoming more difficult in a world where a wealth of free online content has made it harder to justify mid-market MBA qualifications. Schools have to respond more quickly to corporate demands as soft skills and traits such as leadership become more valued.
Corporate leadership and entrepreneurship requires close working relationships with engineering, product development and law, often turning work around to tight deadlines. Business schools now need to build this into their programmes by collaborating with law, engineering and public policy schools on assignments related to product development and regulatory due diligence.
Today’s business world is unrecognisable from the stale, unchanging, west-dominated global economy that was in place in the early 20th century, when US institutions first began awarding MBAs. We have seen stock market boom and busts, management philosophies from Taylorism to Holacracy, and a complete shift in the world’s economic centre of gravity.
Teaching at business schools has had to evolve to keep pace, from Harvard to Oxford and New York to Paris. Technology has caused this evolution to speed up dramatically in the past decade, and provided a range of new case studies and principles for classroom discussion and debate. At the same time, a growing number of students from China, Mexico and Brazil now enrol, bringing insights into the cultures of their home markets and the opportunities that lie there.
Technology and education both work best when they look beyond state borders or arbitrary barriers. Many companies, markets and even corporate leaders are identifying as global over national, but this represents real challenges for business schools. They will be forced to differentiate or become irrelevant.
Cameron Stevens is founder and chief executive of Prodigy Finance.
This article is an edited extract from Rethinking Business Education (ed. Della Bradshaw).