U.K. B-Schools May Become Less Attractive to Applicants

Over the past decade, Britain has become a magnet for business school students from around the world seeking a top quality MBA degree. While London Business School leads the pack in offering an elite MBA in Britain, greater recognition of Cranfield and Manchester along with the entrance of Cambridge and Oxford into the business school field has significantly enhanced the country’s status as a place of serious business study.

But now proposed government restrictions that would make it nearly impossible for graduates from outside Europe to gain post-MBA work visas threatens to cut off the pipeline of highly talented applicants from the U.S., China, India, and other countries. If so, it would deal a major blow to the competitiveness of British B-schools. Their student populations would become less global and less diverse, a prospect that would make British MBA programs far less appealing to both students and major recruiters of MBAs.

The likely beneficiaries of the restrictions, according to a prominent British accreditation organization for business schools, will be MBA programs in the U.S., Canada, and Australia. Other major European schools, such as INSEAD, IESE and IE Business School, could also greatly benefit by getting a disproportionate share of top quality applicants particularly from China and India.

Under the proposal, intended to reduce immigration “from hundreds of thousands to tens of thousands,” post-study work visas will be abolished starting in April of 2011. Currently, overseas graduates of degree-level programs in the U.K. are automatically eligible for a two-year work visa. Some 38,000 of these visas were issued last year. So-called tier 2 visas for skilled workers with job offers—sometimes received by foreign MBAs who graduate from British B-schools–would be limited to only 20,700 people a year starting in April.

The schools are lobbying against the proposed restrictions, but it is unclear whether they will be successful. Foreign students at U.K. business schools contribute $3.2 billion to the economy directly, according to one study by Nottingham Business School and the Association of Business Schools. The same study claims the indirect costs would reach nearly $11.2 billion. At London Business School, which boasts the most prestigious of all the U.K. MBA programs, 57% of the Class of 2010 reported taking jobs in Britain, although only 25% were from either Britain or the rest of Europe. Some 67% of London’s Class of 2011 did their summer internships in the U.K.

In a statement published on its website, the Association of MBAs, an accreditation group in the U.K., warned that the restrictions could have grave consequences for British MBA programs. “There is consensus among business schools that restrictions on the opportunity to work will impact enrollment figures, as prospective MBA students will be drawn to programs in competitor countries with more favorable employment regimes,” the association said. “Far from being an immigration risk, international MBAs return to their countries in most cases as powerful ambassadors for the UK,” the association said. “If we lose this goodwill, the longer-term impact on the UK’s overall competitiveness will be considerable.”

The association, which accredits 47 MBA programs in the U.K., said that in 2008 the schools enrolled 4,406 students from outside the U.K. and Europe. “This is a small, select cohort representing the most elite applicants from around the world,” the association said. “MBA students are a financially secure student population, and there is little to indicate in these figures that international MBA students pose a threat to public services or funds.” The group cited a recent survey of 2,000 alumni in which it said 50% of respondents self-funded their MBAs, 32% had company sponsorship, 10% used a bank loan, 1% used redundancy packages and 7% reported „other‟ or used a combination of the above.“


The Association of MBAs said it surveyed the 47 accredited business schools in the UK in early January 2011. Of the 34 who responded, 97% said that they believe continued restrictions on student visas are likely to impact their enrolment numbers in the future. Of these, 56% said that the impact was highly likely. “This supports deep concerns voiced in focus groups among business schools that prospective students will look elsewhere to competitor countries including Canada, the United States and Australia,” the association said. “Additionally, English-language MBA provision is increasing in emerging markets worldwide, as is general MBA provision, particularly in India and China which are two of the UK’s biggest markets for international students. The UK must do all it can to remain competitive in the highly skilled business education sector; turning students away by restricting their access to post-study employment puts their reputations at stake and threatens future viability.

“Some 82% of the accredited business schools in the UK who responded to our survey reported that international students form a significant part of their revenue. Schools estimated that in the last 12 months, their loss of revenue due to current visa restrictions ranged between $32,756 (one student) to $1.1 million. Given that there were 4,406 international MBA students in the UK in 2008, that represents an average of 94 international students per business school. The risk of dwindling numbers will have a devastating impact on UK universities and the industries they support.”