I was on a fantastic panel earlier this week to help celebrate Columbia Business School’s 100th anniversary, along with its dean Glenn Hubbard, as well as deans Nitin Nohria of Harvard Business School and Garth Saloner from Stanford’s Graduate School of Business. The subject was the future of business education.
Our focus was on the “what,” i.e. how what we teach will change in the years ahead. Everyone agreed on the broad contours:
- More focus on interaction and application in class while putting more lecture-like material online
- More experiential learning outside the classroom, locally and globally
- More emphasis on entrepreneurship and innovation, balancing learning-by-studying with learning-by-doing
- Supplementing the soft skills of leadership with a data analytics toolkit allowing leaders to talk to and learn from the “geeks”
It’s no surprise our conversation centered on the full-time MBA degree. Columbia, Harvard, and Wharton have the three largest full-time MBA programs in the world. Even so, we could easily fill our classes several times over with highly qualified and talented applicants every year.
But this also shows just how small and finite the full-time MBA world is. The four MBA programs on the Columbia stage admit less than 3,000 students a year to their full-time MBA programs. According to the American Association of Collegiate Schools of Business, only about 2% of students enrolled in business degrees around the world are pursuing full-time MBAs. Contrast this with the roughly 20 million enrollments in business courses on the online Coursera platform since 2013. The demand-supply mismatch is striking.
This is business education’s “how” challenge: how to expand access to high quality business education. I think the answer has to do with four C’s — cost, convenience, credentials, and computers.
- Cost: Affordability is a major concern for everyone in higher education. Along with our peer schools, Wharton does not pass on to our students the full cost of their education. Penn’s financial aid policies make it possible for many of our undergraduate students to complete their studies without having to take out loans. Financial fellowships are an integral part of our MBA value proposition. Our bottom line is simple: we want the most talented students at Wharton not just those that can afford it; we use philanthropy and non-degree revenues to make that possible.
- Convenience: Many schools supplement the full-time residential MBA with other delivery modes catering to working professionals — using weekends, evenings, and convenient locations near where people work to reduce the opportunity cost of full-time study. These programs have also diffused widely throughout the world, because MBAs compatible with full-time employment makes sense in global cities everywhere. But we don’t cut any corners in the Wharton MBA for Executives program in both Philadelphia and San Francisco. It is the full Wharton MBA, just delivered differently, for executives with the experience to balance big jobs and families with intense study. Our new Penn Wharton China Center in Beijing likewise underscores our goal to go where the need is high.
- Credentials: The MBA is the gold standard of business credentials. But undergraduate business degrees are big business not only in the U.S. but in Asia too, reflecting the heightened career orientation of high school graduates. Our Wharton undergraduate degree is so rigorous that the majority of our graduates don’t go back to school to get an MBA. Masters degrees in subjects like accounting, finance, and management that are shorter and younger than the MBA are very popular outside the US. And don’t forget non-degree credentials are an often underappreciated part of the business school portfolio. At Wharton, nearly twice as many people come to campus each year to receive certificates for short duration professional development programs in Executive Education as are enrolled in all of our degree programs.
- Computers: Online business education, delivered on desktops, laptops, and increasingly smartphones, brings together the other 3 C’s. Online programs tend to be both cheaper and more convenient than face to face. Online credentials spanning degree and non-degree programs are proliferating — from Wharton’s Coursera Specializations and HBX CORe to Illinois’s iMBA and IMD’s Global Leadership in the Cloud. Online will never rival the value of face to face business education. But that is the point. They cater to and add value for students who would never come to our campuses. At Wharton, about three quarters of our online learners live outside the U.S., whereas about the same percentage of our face-to-face students are American.
The “what” of business education is changing. But so is the “how.” After the financial crisis, “Is business school still worth it?” was a common question. Today, I think the answer is pretty clear. Business schools are thriving because they are changing, both what they teach and how they teach. That makes it an exciting time to be part of a great school like Wharton.
Editor’s note: The original version of this article appeared on LinkedIn on May 6, 2016.