Pandemic Delays Opening Of IE’s New Skyscraper Campus

IE Business School intends to press ahead and open its new campus in Madrid, Spain, in early 2021, a delay from the original opening date due to the global COVID-19 pandemic. The school announced in 2016 that it would build a 50,000 square meter, 35-story skyscraper in the city’s financial district, with a completion date of this year, to house its 6,000 undergraduate students. However, the plans have been scuppered by the coronavirus pandemic which has hit the Spanish capital particularly hard.  

IE is optimistic that a spring opening date next year will be possible, however, and hopes that it will be able to open its doors for a major EFMD conference planned for February, while accepting that social distancing and other measures could still make that impossible.  

While undergraduates — who can study business administration, architecture, technology, international relations, law, communication, and psychology — will move over to the new building, the plan is for postgraduate students to remain in the current Calle María de Molina campus, which is seen to be more appealing to them as it is closer to the center of the city. 

ALMOST CERTAIN THAT ENTERING MBAS WILL BE TAUGHT ENTIRELY ONLINE AT THE START

As with all business schools, IE is so far unclear about the shape of its MBA next year, or how many students will cancel, or choose to defer. So far, only a couple of MBA participants have asked to postpone, although Dean Martin Boehm says that he suspects that many are waiting until late May or June, when the situation with lockdowns, quarantine, and international travel ought to be clearer. 

At the moment, it is almost certain that the MBA students starting in September will be taught entirely online at the start with some face-to-face sessions being phased in over several months. Boehm stresses that IE has taught blended courses – part online, part face-to-face – for many years, and has been able to utilize its expertise to give MBAs a good experience. 

Notwithstanding that, Boehm expects that the MBA experience will be the hardest hit program of all IE’s offerings. “An MBA is a one-year experience, a lifetime experience, and a lot of the value is experiential,” he says. The program becomes less appealing if the first few months are taught online and classmates might not be able to come to campus. That also would make study-trips impossible because of restrictions on travel.

IE EXPECTS UNDERGRADUATE NUMBERS TO HOLD UP WELL

Boehm points out that if a prospective student is 28 years of age, he or she could easily wait until they are 30 or 32, when the world will almost certainly have returned to normal. Because MBAs tend to be living far from their home country – more than 90% of IE’s MBA students are international – they might decide that this is not the time to move far away from families. 

The school says that it expects undergraduate numbers to hold up well, on the grounds that younger students straight out of high school will not have many other options but to start their degrees. If, as expected, courses are taught mostly online for a few months, that should not put off people taking four-year degrees. “The other options those people might take, such as doing an internship or travelling the world, are non-starters at the moment,” says Boehm.

The school’s pre-experience specialty master’s programs  – which include a popular and well-regarded including Masters in Management – also are not expected to be dramatically impacted because students for them often come straight from their undergraduate studies. They have few other options but to continue with the master’s that they hope will land them a good job, believes Boehm. But others are already in work, and might decide to wait out the pandemic before returning to education. 

IE EXPECTS AN INCOME HIT OF 20% TO 30% ON MASTER’S PROGRAMS DUE TO COVID-19

How will the global health crisis impact IE next year? The conventional wisdom is that the MBA market is countercyclical – when the economy is struggling, people (including those who have been laid off) are more likely to take the time to invest in themselves and find new jobs just as the upturn begins. That was the case in 2008 and 2009. “But this is not just a financial crisis,” says Boehm, “it is also a health crisis and people might decide to wait until the world goes back to usual, and they feel it’s safe to be in a different healthcare system. These effects might cancel each other out.”

Unlike some schools, executive education which has seen a sharp decline since the start of the year as firms cut costs and travel has become impossible. However, IE says that it expects to take a hit of 20% to 30% of its income from master’s level courses and another 10% at the undergraduate level. 

Boehm says that IE is “thinking about putting measures in place to bring our cost structure down,” but he hopes that the school will not have to let staff go. Thus far, there have been no layoffs. One plan, adds Boehm, is to let go of buildings that the school owns or rents earlier than planned. Given that everyone is working at home and will be for the foreseeable future, these can be left now, rather than waiting for the new campus to open.

DON’T MISS: MEET IE BUSINESS SCHOOL’S MBA CLASS OF 2019 or MADRID’S IE TO LAUNCH EUROPE’S FIRST TECH MBA