Economic Downturn: Right Time to Apply for an MBA?

With the global economy in downturn and facing an uncertain future, TopMBA.com asks if this is the right time to apply for an MBA. 

With many financial experts now fearing the global economy’s second period of recession in almost as many years, now could well be the time to venture forth and attain the business skills and financial prowess fostered on an MBA.

The past month has witnessed economic events around the world that are likely to shape global attitudes to business, finance and industry for the next century.

The US economy’s downgrade from a triple-A rating to AA+ by Standard and Poor’s rating agency; multiple eurozone nations at risk of defaulting on their debts, possibly spelling the end of the Euro currency; China’s heavy criticism of a western economic reliance on debt; and global stock markets entering a period of turmoil. These events combined, it’s hard to see global economic recovery from the financial crisis anytime soon.

But what does a further period of economic hardship mean for ambitious professionals seeking to advance their careers, take the next step up the ladder, or even change industry specializations through enrolling on an MBA program?

“Applications [to MBA programs] traditionally increase during economic downturns,” explains Nick Barniville, director of MBA programs at ESMT in Germany.

“Whether the time is right to apply will of course be linked to the opportunity cost of not working, and as this opportunity cost goes down during an economic depression, then obviously applications will go up. But the primary driver should be whether the applicant is at the right stage of their career to benefit from an MBA.”

These thoughts are echoed by UK-based Cass Business School’s MBA program director, Erica Hensens:

“Applying for an MBA needs to be at the right time in an individual’s career and personal life, where they can fully commit the time, bring enough relevant experience and get the most out of the experience, teaching, networking, and everything else that a good MBA program offers,” she says.

For those that have considered their options and have decided that enrolling on an MBA program could be the right course of action for them to take, applying now, prior to any future global economic hardship could be a smart move. After all, with applications to business school generally increasing during recessionary periods, ensuring your MBA application is submitted before a possible future recession will help to avoid any increase in competition for places that occurs.

“Entry on to good quality MBA programs is always highly competitive, regardless of economic conditions,” says Praveen Mahadani, membership services director at the Association of MBAs (AMBA).

“The timing of studying for an MBA is usually dictated more by expectations of future returns, therefore, applications for full time programs have historically gone up during a recession, potentially lead by the view that better education will create a differentiator in a troubled job market.”