STEM is all the rage at business schools in the United States. The schools will say they are embracing science, technology, engineering, and math designations to their MBA programs because they want to equip their MBAs with the best tools for success. That’s undoubtedly true. But they have another motive as well: shoring up their pools of international talent, which continue to dwindle as costs rise and domestic political debate about immigration policy boils over, because federal law allows STEM MBAs to stay in the country three times as long.
Apart from the politics, if STEM designation makes sense for any leading MBA program, it makes sense for MIT. Among Class of 2021 students currently enrolled at the Sloan School of Management, fully a third — 33% — carry undergraduate engineering degrees, and another 11% have math and science bachelor’s degrees. Nearly 20% have work backgrounds in tech, with another 10% coming from either the energy or industrial sectors. Likewise, look at where MIT Sloan MBAs go to work after leaving Cambridge: In 2019, for the first time, tech caught up with consulting as the top destination of the newly graduated, with more than 30% of MBAs finding employment in the sector. All of which helps to explain why MIT has switched its full-time MBA and two executive programs to STEM, effective immediately.
The Sloan School is keeping good company. Just since the new year two peer schools, Dartmouth College’s Tuck School of Business and the University of Michigan Ross School of Business, announced STEM-related changes to their MBA programs, each by adding a STEM track within their MBAs; and late last year UC-Berkeley’s Haas School of Business and Northwestern University’s Kellogg School of Management both embraced STEM, too, the latter by adding a new major and the former by transforming all three of its MBA programs. Like MIT, Carnegie Mellon’s Tepper School of Business embraced a recalibration toward “management science” when, in early November, it designated its entire MBA as STEM.
‘WE ARE IN A PRIVILEGED POSITION’
Why is this all happening? Applications to full-time MBA programs in the U.S. have dropped dramatically over the last three cycles, hitting elite and lower-tier programs alike. MIT Sloan may not be the most impacted — among top programs, that distinction goes to Dartmouth Tuck — but Sloan has not escaped the trend. It received 5,200 apps in 2018-2019, down 6.5% from the previous year’s 5,560 and down 10.3% from 2016-2017, when the school received 5,798. MIT’s acceptance rate last fall was unchanged from the previous year, about 11.5%, but it most likely went up with the enrollment of a larger class out of a smaller pool of applicants.
But Jake Cohen, MIT Sloan’s senior associate dean for undergraduate and master’s programs, says the app decline that has hit almost every top-25 U.S. B-school was not a factor in the decision to move Sloan’s MBA programs — full-time as well as the executive Sloan Fellows MBA and Sloan Executive MBA — to STEM. He has a point: The school’s Class of 2018, which started before the current presidential administration, was comprised of 39% international students hailing from 50 countries; three intakes later, the Class of 2021 that started last fall had 42% foreign students hailing from 54 countries. Nor has MIT seen any slump in the rankings: In P&Q‘s annual composite ranking, the Sloan School landed sixth, same as the previous year. Likewise in the recently released Financial Times global MBA ranking, where MIT placed sixth as well, up seven spots in three years.
Cohen says the decline in applications to its full-time MBA is not a major concern for the school. Instead, he says, the move to STEM — unannounced except internally and reported to P&Q by a student — reflects a recognition of the reality that these skills are in high demand, and that like their peers MIT Sloan grads deserve acknowledgement from employers that they have acquired them and thus are eligible for a longer period of post-grad employment.
“We are in a privileged position of receiving more than 5,000 applications for 400 seats and, thus, are not concerned with the decrease,” Cohen tells P&Q. “In a world focused on technology, our goal remains to properly communicate the value proposition of earning an MBA degree at MIT’s Sloan School of Management.”
NO CHANGE TO CURRICULUM OR NAME OF SLOAN MBA
Because STEM fields are considered essential to U.S. economic competitiveness and growth, the government grants non-citizen graduates of programs with STEM designation a dispensation to work in the United States longer without needing a visa. International graduates of U.S. business schools currently may hold U.S. jobs for only 12 months before needing an H1-B visa — a visa that has become harder to get amid the heated political debate on immigration in the U.S. To address a shortage of qualified workers in STEM fields that by some estimates will grow to more than a million jobs by 2024 — and by other estimates to 3.5 million by 2025 — the federal government in 2016 created the STEM Designated Degree Program, which makes it possible for international graduates to remain stateside for an additional 24 months after graduation and receive training through work experience. To be eligible, they must have a STEM degree from an accredited U.S. school and must secure employment with an employer that includes a minimum of 20 hours of work per week and formal training within the STEM field.
To earn the STEM designation, at least 50% of coursework in a program must be in the fields of science, technology, engineering, or math. That won’t be a problem at MIT, Cohen says. In fact, despite the STEM designation to its MBA programs and a shift in its curriculum classification from “Business/Commerce” to “Management Science,” few actual changes will occur immediately to the school’s core or elective offerings. It’s not necessary to change much, Cohen says, because MIT Sloan has already dwelled in the STEM space for so along.
“We believe Management Science is a more accurate representation of the education and training delivered by the faculty across the core and elective curriculum than the prior designation of Business/Commerce,” he says. “This update better aligns with the demands of the marketplace. There will be no change to the name of the degree granted or the curriculum required to complete the degree.”
ACROSS THE COUNTRY, B-SCHOOLS EMBRACE STEM
Business schools are acutely aware of trends as they manifest at other schools. Dean Brian Kench of the University of New Haven College of Business says he is optimistic STEM tracks or entire STEM programs will play an important role in preparing New Haven students and those at other schools for the jobs of the future. He’s so convinced, in fact, that he pushed to transform New Haven’s MBA program to be one of the first in the country to feature STEM-designated concentrations.
“Students are spurred by the labor market shortage and the salaries that go along with business analytics,” Kench says. “It’s very attractive to the price-sensitive student who’s really concerned with return on investment, which is just about every first-year student that’s coming into college these days.”
Peter Johnson, assistant dean of the full-time MBA program and admissions at UC-Berkeley’s Haas School, agrees. He told P&Q last fall that he and others at Haas were mindful about what the school’s move to STEM would mean for its peer schools.
“Since we let our students know about this early in the fall, I’ve had a number of phone conversations with peers from other institutions who are asking how and why we sought this change and what impact it might have on our students,” Johnson said. “So yes, I think it’s likely that there will be other programs that will want to do this. And I think some programs are simply going to stick with, ‘Hey, we have a specific part of the program in a concentration or a major that is already designated this way, and we don’t want to pursue that for the entire MBA program.’”
At MIT, Cohen says the move to STEM was natural and smooth — and because it takes effect immediately, all current MBA students who are not U.S. citizens will graduate with the chance to work in the U.S. for three years before needing a visa.
“We looked at our core curriculum and our most popular electives and found that those classes contain an aspect or aspects of the STEM definition of a general program that focuses on the application of statistical modeling, data warehousing, data mining, programming, forecasting, and operations research techniques to the analysis of problems of business organization and performance,” Cohen says. “MIT’s MBA curriculum continues to evolve in these areas, as employers look for new problem-solving skills in areas such as data analytics, statistics, optimization, machine learning, and artificial intelligence. Our curriculum focuses on management science, and the Classification of Instructional Programs code now reflects this.
“We are seeing a very strong demand for MIT graduates in STEM-related positions.”