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Wanted By Harvard: Japanese Applicants

Harvard Business School Dean NItin Nohria (Photo courtesy of Harvard Business School)

Harvard Business School Dean NItin Nohria (Photo courtesy of Harvard Business School)

Harvard Business School Dean Nitin Nohria suggested he would like to see more MBA applicants from Japan. In an interview in Asia with The Wall Street Journal, Nohria said he believes a major falloff in candidates from Japan is occurring because the country has become more insular in recent years.

“One of the anxieties we have is we used to see 30 to 40 Japanese students out of 900 M.B.A. students every year,” he told the Journal. “Now it is down to four to five. Japan is only part of Asia that’s in retreat. They were so engaged in the global economy in the 1980s, now they have become more insular. Japan is the third largest economy in the world, it’s important for us to find a way to reach out.”

Nohria made his comments in answer to a question about the changing mix of MBA students at the Harvard Business School. “They used to be from Europe, but Europe has developed its business school scene, so we see fewer students from Europe,” he said. “We see students from Latin America, they tend to not to just go to HBS but also other business schools. So we see a more competitive market. With Asia students, we see them from everywhere. The growth is explosive.”

DECLINE IN JAPANESE MBA STUDENTS AT HARVARD NOT DUE TO FEWER GMAT TEST TAKERS

In the latest entering class at Harvard, more MBA students are from Asia than any other country with the exception of the U.S. Some 14% of the Class of 2016 hail from Asia, but mainly those students are from China and India. Japan, however, is an exception to that trend. “As for Greater China, our mix has shifted to mainland. Now a quarter of the students are from Hong Kong, and three quarters from China. It used to be the vast majority of Chinese students were from Hong Kong.”

GMAT test takers in Japan in the past five years has remained relatively stable, however. In the 2014 testing year ended June 30th, 2,612 Japanese citizens sat for the exam, just slightly down from the 2,680 who took the GMAT in 2010. The Graduate Management Admissions Council, which administers the GMAT, has said that more Japanese applicants are applying to schools in Singapore, Hong Kong, the United Kingdom, France and Spain. In 2012, the percentage of score reports sent from Japan to U.S. schools fell below the 70% mark for the first time to 67%. In 2008, 77% of the score reports in Japan were sent to U.S. schools.

Nohria also told the Journal that he has been surprised by what he called “a sudden jump in applications from the energy industry. We still see 10 applications for every student we are going to admit.”

INCREASES IN SCHOLARSHIPS AT HARVARD OUTPACING TUITION INCREASES

Dean Nohria also commented on the increasing amount of scholarship aid HBS has been showering on its students. “Tuition has been going up by 4%, we are matching that with increasing financial aid, at a rate of almost 5%-7%,” said Nohria. “Almost 28% of our tuition is now given away as scholarship. Last year 50% of students receive some forms of financial aid. Twenty years ago it was almost impossible to imagine.”

Asked what his biggest challenge is today, Nohria said it was the thought that young people don’t need an MBA to get ahead. He estimated that U.S. demand for two-year MBA programs has declined 20% since 2000. “The biggest challenge is a lot of people are asking the question whether they need to go to business school at all,” he said. “The golden era of business education … is 1950 to 2000, where it was almost considered, if you want to accelerate your career, you’d better have an MBA. That sense of necessity of an MBA has shifted. Even McKinsey has people from Ph.D.s and other backgrounds, they train them themselves. You go to an investment bank, they will tell people that you can just stay and become a managing director, you don’t have to get an MBA.”

Nohria said the explosion of business schools in India and the subsequent contraction of the market shows that prospective students are more focused on quality. “India might be a bellwether,” said the dean. “Demand for business education grew so rapidly so 1,000 business schools were open. Suddenly people realize just getting a degree from any school isn’t enough. Consolidation is happening. Same thing is happening in the U.S. People are more conscious that quality of education matters.”