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The vice-dean of London Business School has said that the traditional elite MBA course has “passed its peak” as escalating fees and new UK restrictions on student visas hit demand for longer programmes.
LBS on Monday unveiled a new one-year version of its flagship 15-21 month master of business administration degree in response to increasing requests for shorter courses.
“We recognised that the MBA as a degree is mature. It has many many years to run but we are past peak MBA,” Julian Birkinshaw, LBS vice-dean responsible for masters degree programmes, told the Financial Times.
He added that tighter courses were now more popular globally, as well as in the UK, than the traditional two-year programme first offered by Harvard University’s graduate management school in 1908.
But demand for British two-year MBA programmes in particular had been hit by the government’s recent tightening of visa requirements, according to Nalisha Patel, European regional director at the Graduate Management Admission Council, the business school entrance exam administrator.
New restrictions on international students from bringing over family members to the UK have pushed many potential applicants to seek shorter courses, which are more common in other parts of Europe, GMAC research found.
“If you cannot bring dependants, a one-year MBA becomes more attractive,” Patel said.
Rising MBA tuition fees and the cost of an extended workplace absence also factored in to declining demand worldwide, according to education experts.
Tuition fees for the 2024 MBA intake at LBS are £115,000, up from £78,500 in 2018.
The UK’s departure from the EU had made the country less popular as a destination to study for an MBA, but only marginally in the case of LBS, said Birkinshaw.
“Brexit has not helped us, but it has not significantly affected applications [from the EU],” he said.
“We recruit the best individuals from a global talent pool, wherever they are from. Regional representation can fluctuate year-on-year. Our last graduating class had 83 Europeans, the same as in 2019 just before Brexit happened. The number can vary though. Just after Brexit it was 70.”
Applications for MBA courses worldwide declined for the second year in a row for the 2023-24 academic year, falling by about 5 per cent year-on-year after a brief resurgence during the Covid pandemic, when people turned to formal education to improve their skills amid employment concerns, the GMAC found.
It said more selective and traditional in-person programmes were more likely to report declines.
The GMAC survey of prospective students last year recorded for the first time greater demand for one-year MBA programmes, which are mostly offered in EU countries, than two-year courses.
In the US, the one-year full-time MBA is more likely to report growth than two-year courses, with 65 per cent of schools offering the former reporting increased demand last year compared with 48 per cent among those offering the latter.
The new shorter MBA at LBS will initially be limited to students who have completed a specialist masters degree either at LBS or another business school.
“The MBA still has its allure, but it’s a particular allure to people from emerging economies that are trying to get into European and American employment opportunities,” Birkinshaw said.