Why Business School Applications To The UK Are So Strong *

The hard stats on global applications to business schools is a good proxy for the attractiveness of schools and their location as a study destination. And when you look at that data, you would immediately be  struck by the recent relative strength of those in the United Kingdom.

This comes, as I have written earlier, as the global competition for talent has been heating up. Traditional destinations such as the U.S. have been losing market (application) share to challengers from Asia and the European continent. Why then, is the U.K., certainly one of the “traditional” study destinations bucking the trend and gaining share?

To understand this further, one needs to first look at underlying global trends in international student mobility, a subject that I wrote about in a previous column (you can read it here). In it, I demonstrated that there is a fundamental shift in students’ preferred study destinations away from the U.S. to schools within their region, in Asia and in Europe. The U.K. could certainly be benefiting from the shift to Europe, but recently, the U.K. business schools seem to be outstripping their continental brethren. Why could that be?

THE U.K. HAS ALWAYS BEEN A BUSINESS SCHOOL POWERHOUSE

The U.K. has always been a graduate management education (GME) powerhouse. It is the third largest taught-in-English provider of graduate management education after India and the U.S. It is home to many institutions of renown, including two of the most prestigious universities in the world in Cambridge and Oxford. Ten of the Top 100 global MBA programs on the Financial Times‘ 2023 list are domiciled in the U.K. As are 10 of the top 100 Master’s in Management  programs. When you consider that for all its prominence in global discussions, the U.K. is relatively small comprising just 5.1% of OECD GDP (and only 3.8% when you add in China and India). It is a country with only 4.8% of the OECD population. You can appreciate that it punches above its weight in graduate management education.

The country  has benefited from its overweight in ranked business schools and greatly by historical ties to the countries of the Commonwealth. Many prospective students in Asia have had parents and grandparents who earned their degrees  in the U.K. The brands are top of mind and large diasporas lead to family ties and financial and social support. International credibility is important to all business schools, but even more so to those in the U.K. as large proportions – often  more than 90% – of their students are international.

Yet, for most of the last decade schools in the U.K., while benefiting from the global shifts described above, lagged the rest of Europe. The chart below  illustrates this point. In the four-year period from 2016-2019, the number of GME programs in the U.K. that reported application growth exceeded the global average by 1%, 21%, 30% and 17%. A powerful showing indeed. But they lagged the European average of schools reporting growth by minus – 15%, 0%, +9% and -5%. It seemed that European schools were doing even better and were collectively gaining share while the U.K. schools were losing relative share to the continent. Why may that be? I will come to that in a bit.

APPLICATION GROWTH TO GRADUATE MANAGEMENT PROGRAMS IN THE U.K. OUTSTRIPPED THE GLOBAL AVERAGES IN THE PAST THREE YEARS

The picture changed dramatically in 2020. British programs reporting application growth continued to exceed the global averages but more tellingly they also started exceeding the European averages by +10%, +3% and +13% in the 2020-2022 period (early data seems to indicate that there may have been a slowdown in 2023). Did the U.K. schools suddenly do something different? Did the U.K. suddenly become more attractive as a study destination? Or were there other factors?

I don’t believe that the schools did anything fundamentally different. They did marginally benefit from the fact that, during Covid, many Asian families preferred to send their children to destinations that were “closer” (one flight away) with multiple ways to get back home during lockdowns. The diaspora in the U.K. helped provide comfort.

The more fundamental shift I believe was one of policy. In 2012, the then conservative government abolished the two-year Post Study Work visa (PSW) that allowed graduates to work after graduation. This had a chilling effect on applications to the U.K., contributing to their underperformance compared to the Continent (which, remember was expanding post-study work opportunities at that time). They reintroduced the policy in 2019 and applications to the U.K., boosted by the presence of ranked schools, Commonwealth links, diaspora ties and closeness to Asia did the rest. Applications to U.K. schools outstripped growth on the Continent and the globe.

THE BENEFITS TO THE U.K. OF HIGHER EDUCATION ARE INDISPUTABLE

A recent study by educational consultancy, IDP, stated that 41% of international students in the U.K. would change their preferred study destination if the PSW visa period was reduced. That is the level of sensitivity to this issue. Add to that that another study which calculated that foreign students pursuing a higher education degree spend £44.1 billion in the U.K. while the cost to maintain them is a mere £6.7 billion for a net benefit of £37.4 billion to the economy. A compelling public policy case seems to present itself.

Yet, in a response to growing political pressure over immigration, in December 2023, the then U.K. Home Secretary announced a review of the visa program with a view towars reducing or eliminating the ability of international graduates to enter the U.K. workforce.

Stay tuned.

Author & former GMAC CEO Sangeet Chowfla

Sangeet Chowfla led the Graduate Management Admissions Council as president and CEO for nearly ten years from 2014 to 2022. A globally recognized and respected executive with deep experience in the technology, telecommunications, and venture capital sectors, he began his career in New Delhi with IBM/IDM. Chowfla went on to spend 18 years with Hewlett-Packard Co. in Europe, the Middle East, Asia Pacific, and the United States. He culminated his tenure with the company as vice president and general manager of the Inkjet Media Division from 1995-2001. He then moved to Timeline Ventures as a partner in the venture capital partnership. In 2007, Chowfla became the chief strategy officer and executive vice president of the Mobile Services and Global Market Units of Comviva Technologies, a leading Indian telecommunications software company. Chowfla joined GMAC during a period of disruption in the organization and industry. During the last three years of his tenure, he helped to stabilize the candidate pipeline, renewed GMAT exam growth, diversified GMAC’s footprint and ensured a strong financial foundation to enable future investment.