While the demand for MBAs in the U.S. is again on the rise, it’s exploding at unprecedented levels in many emerging markets around the world, according to a new, authoritative report out today. The hottest markets? India, where employer demand for MBAs was up 43% last year; Brazil, where demand jumped by 25%; the United Arab Emirates, up 22%; Russia, up 22%, and China, where employer demand for the MBA degree shot up 19%. In contrast, the report showed, demand in the U.S. rose a healthy 9%, while in Western Europe, it rose by only 3%.
Precious few Harvard or Stanford grads are likely to pack their bags to go to the country with the highest growth rate in MBA demand. According to the report, that country is Kazakhstan. Booming industries in energy and finance led to an astonishing 65% increase in MBA demand in Kazakhstan. “Central governments are also encouraging state-backed companies to recruit more MBAs, both locally and internationally,” the report noted.
The results–based on some 5,007 responding corporate recruiters in 36 countries–was published today (March 10) by QS Intelligence Unit, a part of Quacquarelli Symonds Ltd. founded by a Wharton MBA. The organization has conducted an annual survey of MBA employers since 1990. QS said that 2,157 of the respondents are actively recruiting MBAs this year. The new report’s results are heavily skewed toward employers outside the U.S. More than 50% of the responding companies are based in Asia, for example, with just 11% in the U.S. Major U.S.-based corporate recruiters, including McKinsey & Co., Boston Consulting Group, Goldman Sachs and Morgan Stanley, did not participate. Nonetheless, the study contains a wealth of data and information useful to anyone interested in the value of the degree.
Demand for MBAs in emerging markets has never been stronger, and not just in Asia, according to the report. Companies in many emerging economies are embracing MBAs as a route to global competitiveness – throughout Central Europe and Latin America, as well as this trend beginning to emerge in the Middle East. In the last 12 months, Sandra Schwarzer, Director of Career Services at INSEAD reported an increase of up to 70% in MBA jobs in some emerging markets.
“The really hot MBA market in 2010 is India which is experiencing and explosion in employer demand for MBAs – especially in consulting/professional services, manufacturing, IT/computer services and is leading the way in MBA jobs in micro-finance,” the report’s authors stated. “The surge in employer demand in emerging markets has inevitably brought about a change in behavior of international MBA students. A few years ago, an international MBA was a route to a new life in the USA, Canada or Western Europe. In 2010, an international MBA is as much about learning international business practices and creating a network which can be a powerful career advantage for MBAs seeking to exploit the rapid growth of China, South East Asia, Latin America and other emerging economies.” Mauro Guillen, dean of the Lauder Institute at Wharton, told the QS researchers, “a higher percentage, perhaps as many as two out of every three international students, are returning to work in their home countries, or in emerging markets, rather than staying in the USA.”
In many cases, the explosion in MBA demand around the world is reminiscent of the growing acceptance of the degree in the U.S. in the 1980s and 1990s. Increasingly, the MBA is becoming a default credential for anyone seeking a business career. The report quoted Elizaveta Komolova, an HR Consultant with Morgan Hunt in Moscow, who said that in Russia Russian “an MBA is becoming a default attribute of a successful manager. MBAs in Russia are expected to be more practice-orientated, have more structured knowledge and a broad business network. MBAs are known for their ability to think long term and use their business contacts for the best.” Russia is one of the hottest countries in the world for MBAs. With growing international ambitions, many Russian companies are seeking MBAs to open up new markets in energy, raw materials, manufacturing and financial services.
The really hot MBA market in 2010 is India, where demand was up 43% in 2010. The report found, however, that some Employers are actively looking to recruit from local business schools like the IIMs, Indian School of Business as well as many others. Other local Indian companies that are looking for MBAs without work experience, almost as an alternative to a fresh undergraduate, are offering salaries below $30,000 and these employers have been excluded from the results of the survey. Multinational employers still have a strong preference to recruit MBA graduates from international business schools.
Demand for MBAs in China is also strong, up 19% in 2010, for the sample of responding employers. Demand is so strong that the Municipality of Shanghai, the report said, has funded the launch of its own local business school – Shanghai Advanced Centre for Finance – to compete with other local schools like CEIBS and Cheung Kong Business School. Employers in China could not find enough Chinese MBAs returning from US and European business schools, spurring the local government into action.
It’s not just China and India where demand is hot. Edward Hyun, a vice president for American Express Global Network Services Asia, continues to report strong demand for international MBA hiring to meet pipeline leadership needs throughout the Asia region. He told the researchers: “MBAs bring the maturity, business and cultural awareness as well as the leadership skills to take our company forward. Even during difficult economic conditions we remain committed to our MBA hiring program, not just in Asia but around the world.”
In Asia, the MBA is becoming more in vogue. Asian candidates are amongst the highest GMAT scorers in the world, and are focused on developing excellent technical skills often at the expense of integrating fully in the social aspects of the MBA. But Asian recruiters are looking for ambitious, well-rounded MBAs. Amy Low of Visa International in Singapore told QS: “MBAs bring intellect, a fresh approach and strong determination to excel in their delivery.”
What about the largest single MBA market in the world? The report said that in the U.S. 2010 MBA graduates have fared better than their 2009 counterparts, but MBA recruitment has rebounded slowly. “Some economic recovery, the stabilization of the financial services, the recovery of some manufacturing industries and the appearance of new mid-sized MBA employers on campus, all contributed to the slight improvement,” the report said. “Look for increased, yet still uncertain, upward trending in MBA recruiting in the 2010-2011 academic year.”
“Many of the top MBA programs were forced to be more creative in uncovering career opportunities for their students this past year,” says Dan Beaudry, manager of QS Global-Workplace. “Some of the traditional big MBA employers still haven’t recovered much from the drought in 2009. But unlike past economic downturns, most are maintaining at least a small presence on campus.”
Several companies entered the MBA recruiting scene for the first time this year – all benefiting from the reduced competition for talent on campus. Internship programs – still the favorite screening mechanism of MBA recruiters – have been a popular first step for companies testing the MBA recruitment market, and this year saw the birth of several. Look for additional new companies on campus this coming year, and a steady increase in the number of internship opportunities as firms continue the trend towards the “try before you buy” approach.
MBA recruiters who were able to continue to recruit through the downturn report an increase in candidate volume and quality, according to the report. They are quick to note however that many applicants are would-be bankers and consultants looking for a place to hover until better times return to those industries. Look for firms in some of the more stable industries, like insurance and health care, to maintain and expand their foothold on campus and to continue to attract increasing numbers of candidates.
The report also found that U.S. job search continues to be a challenge for international students seeking a coveted H-1B visa. “However, for the first time in several years, there is no shortage of visas available (only about 30% of the available H-1B visas have been claimed in 2010 as of this writing – quite an unusual occurrence). An international student’s best chances of getting a U.S. job remain through a self-directed career search – one focused on networking,” the report stated.