Economic Downturn: Right Time to Apply for an MBA?

Economic Downturn: Right Time to Apply for an MBA? main image

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.”

MBAs encouraging economic recovery

Further to the personal career benefits that an MBA program can offer its graduates and alumni, the value of fresh perspectives and alternative methods that business school graduates offer can be vital to economies seeking to recover from times of hardship.

In this scenario, the entrepreneurial and innovative skills taught on MBA programs can be influential in encouraging future economic growth within a country or region. However, to do so MBAs and the business schools that nurture them need to be mindful of the future.

“It is crucial that schools help to develop business leaders who not only have the innovative and entrepreneurial skills to kick-start growth, but who are also able to ensure that this growth is sustainable so that we can build businesses fit for the future,” says Elaine Kay, MBA programs manager at Nottingham University Business School.

Future sustainable growth in business is not only the responsibility of business schools. While the innovative and entrepreneurial skills that fresh MBAs can bring to business are important, so too is the experience of industry specialists.

“Any business situation needs a balance of experience and fresh thinking. Also, as it transpired from a recent conference for deans and directors from AMBA-accredited business schools, that corporations should be more stakeholder focused and less shareholder orientated.

“A shake up of old values, by bringing in ‘fresh blood’ for example, could facilitate the change of these traditional practices and result in more sustainability and corporate social responsibility,” says Robert Owen, director of business school services and accreditation at AMBA.

ESMT’s Barniville summarizes that for fresh graduates to aid an economic recovery, businesses need to focus on a mix of both fresh thinking, and experience amongst their employees.

“Logically, those companies who can allow both experienced industry experts and self-aware, ambitious, hard-working MBA graduates to join forces and work together should be more likely to succeed. This is no different in times of recovery than in times of recession, where there is always opportunity to be found.”

For those interested in taking the next step in their career by enrolling on an MBA program, QS runs a series of global MBA events designed for future business school applicants to find out more about the many different programs on offer. The various events visit cities throughout Latin America, North America, Europe and Asia. To find out more, visit the MBA events homepage on TopMBA.com.

Written by QS Blogger
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