BusinessWeek had an interesting article this week on the decrease of new applicants to MBA programs across America.
The article cited 1) costs, and 2) internal promotions as the two major reasons for this trend. The improving economy and the increase in retiring execs are largely a reaction to No. 2, if I had to take a stab.
I have my own educated guess, however, at a third prominent reason: An increase in the number of young professionals leaving corporate America to go out on their own.
As recently as 10 years ago, in order to start a business, one typically needed significant funding, while taking on serious risk. Not anymore.
Today, you need a mobile phone, a computer, and a good idea.
The cost of entry into the world of entrepreneurial endeavors is dwindling significantly, and I believe corporate America’s best and brightest are betting on themselves rather than The Man and chasing their own financial and emotional prosperity on a level not seen in a long time.
If I’m right, then corporate America has an incredible challenge ahead of them to fill management openings with capable, top talent. And I believe emptying MBA programs may be an early sign of this future.
Popularity: 2% [?]
April 15th, 2005 at 2:56 pm
Well, this certainly describes me. I’m smack-dab in the target age range/career stage for an MBA and I chose to go the entrepreneurship route instead. Starting a business isn’t cheap but a top MBA program is now a $500,000 ticket if you figure lost salary in. In an entrepreneurial culture, starting your own business buys you a lot of respect even if it fails, and it gets you experience no MBA program can. Unlike law or medicine, where the sheepskin is a critical path, corporate America will hire anyone who can hold their attention. I’ve had a lot of friends who’ve gone to Cornell, HBS, Stanford, etc., all very smart people, and all (save one) going into I-banking.
My gut instinct is that the top tier programs will do fine enrollment-wise because they can still essentially guarantee their graduates a 6-figure job on the fast track, but their social influence will wane as a Harvard MBA becomes a degree for Wall St. instead of Main St. Programs outside the top 10 will be in trouble because the average applicant quality will decline, thereby reducing the value of a “University of XYZ MBA” on the market.
Keep in mind precisely how much you paid for this forecast.
-snob