Trends, insights and research to inform growth and innovation strategies in international higher education.

May 19, 2012

B-schools Trends: New Segments, More Competition, Less Differentiation

I was quoted in a recent article in the New York Times "Business Schools: Looking Local for a Global Reach"
"Prospective business school students are starting to look beyond traditional destinations in the West. And those who are originally from the BRIC developing nations — Brazil, Russia, India and China — are increasingly exploring the possibilities at home.
This group already has a name. In a column for University World News last month, one higher education specialist, Rahul Choudaha, called them 'glocal students,' or 'people who have global aspirations, but need to stay local.'" 
The article continues that
"The United States remains the top M.B.A. destination for students from BRIC countries. Still, the demand for Western degrees is leveling off, while demand for local programs is showing signs of rising. The number of score reports sent by BRIC citizens to home country programs grew 50 percent between 2007 and 2011." 
While there is a "glocal" segment which is considering to stay within region and move beyond traditional choices in the West, expanding class of High New Worth Individuals in Asia is also driving the growth of wealthy who are willing to pay for an MBA and living experience the West.

In my earlier post, I noted that the number of Americans taking GMAT decreased by 775 in five years however, the number increased by 27,361 among Asians, especially driven by China.

It seems that in the world of international higher education, B-schools are the first to experience real "global" competition where students have increasingly more choices of destinations and newer segments of students with different needs are emerging. Not to mention the competitive threat of models of delivery like online and new formats like one-year MBA. In fact, recently McGraw-Hill Higher Education partnered with Cleveland State University to launch the Mobile Accelerated MBA (MAMBA) program--100% online, one-year MBA, accredited by AACSB.

Students are also questioning the return on investment of MBA program due to perceptions of a bleaker economy and higher cost of education. This is already prompting them to consider alternative destinations or cheaper formats or shorter duration of programs.

The shape of things to come for many B-schools will be more competition and less differentiation--a challenge not easy to overcome.

Dr. Rahul Choudaha
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May 16, 2012

Is Master's the New Bachelor's Degree?

I am now blogging for Huffington Post on higher education related stories and trends. Here is my first post Who Goes for Which Master's Degree?

May is the month of commencements. This year, more than 1.6 million students will graduate with a bachelor's degree. While it is a matter of celebration for the students to achieve a major milestone in their life, it is also a harsh reality that now they have to face either a tight job market or an expensive graduate school.

Research by David J. English shows that "individuals most likely to aspire to, apply for, and enroll in graduate school were dependent students who obtained high undergraduate grade point averages, majored in the humanities, social or behavioral sciences, mathematics, or life and physical sciences, and attended a master's or doctoral institution."

Top three broad fields for first time enrollment in master's degree are Education, Business and Health Science, according to CGS/GRE Survey. Nearly 45% of all master's students enroll in one of these three degrees. 

Deciding to go for a master's degree is costly, complex and confusing process. Having a deeper understanding of the fit and future career opportunities may help you make an informed choice. With more than 650,000 students graduating with a master's degree this year, perhaps "the master's is the new bachelor's"

Here is the full article.

Dr. Rahul Choudaha
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May 06, 2012

The future of for-profit education in the US

What is the future of for-profit post-secondary education in the US? Here are some trends:

Inspiring growth
"Brazilian Effect: when public higher education cannot keep pace with growing public demand for access and programs, governments often allow FP’s to rush in and help fill the gap, becoming a much larger and sometimes dominant provider. This is the pattern in many developing economies such as Brazil where some 50 percent of student enrollment is in profit-like private institution." (John A. Douglass).

From 2000 to 2010, the sector grew by some 235 percent in enrollment, increasing its market share from 3 to 9.1 percent of all tertiary enrolled students.

Precipitous decline
New student enrollment declined by more than 30% for Apollo and Kaplan, according to a Chronicle infograph.

Emphasis on marketing/recruiting
15 large, publicly traded for-profit education companies got 86 percent of their revenue from taxpayers and have spent a combined $3.7 billion annually on marketing and recruiting, according to a Senate report 

At the largest for-profit institutions marketing expenses average around 22 percent of revenue, according to BMO 

Lower graduation rates
Almost 2 million students withdrew from large for-profit colleges over a three year period. Among those who enrolled at 10 large chains in 2008-2009, 54 percent had withdrawn by the summer of 2010, according to Harkin's Senate committee.

New non-profit competition
More recently, for-profit has a new competitor--not-for-profit. Initiatives like edX, MITx and coursera are redefining the expectations of online education. It is still too early to say how behavior of credential-seeking student will change, however, it will certainly be impacted. (Here is the recent New York Times debate)

Increasing regulation
Above all increasing regulation is the bane of for-profit education industry, which is already impacting it's financials.

What are your thoughts/comments about the growth prospects and future directions of the for-profit higher education?

Dr. Rahul Choudaha
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May 01, 2012

The Arrival of Glocal Students

My article on "Are you prepared for the arrival of 'glocal' students?" is published in University World News.

‘Glocals’ are globally ambitious students who for various reasons need to stay local. It is a market that is growing fast in Asia and universities need to think strategically about how to access these students. Share your thoughts/experiences, forecasts and possible strategies of engagement. Here is the article:

By 2015 nearly 100 million people will enter the ‘consumer class’, denoting those with an annual income of more than $5,000, in six South East Asian countries – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – according to a report by the Boston Consulting Group.

Another report, by the McKinsey Global Institute, asserts that between 2005 and 2025, China and India alone will see their aggregate urban consumption increase seven-fold and six-fold, respectively.

This expanding consumer class in Asia will give rise to a new segment of students who are willing to pay for a global educational experience while staying in their home country or region. I call this segment ‘glocals’ – people who have global aspirations, but need to stay local. 

‘Glocals’ are characterised by aspirations that usually outstrip both their ability to afford a full fee-paying overseas education and their academic merit to gain admission to an overseas institution with financial aid.

Traditionally, international students go abroad for a combination of reasons, including career advancement, the search for quality education, immigration purposes or to experience living abroad.

‘Glocals’ are different from this traditional group as they are looking for career advancement and quality education without having to go very far from home.

In addition to the limitations they face financially and academically, there is another reason why ‘glocals’ may decide to stay within their country or region. The current increase in regional mobility initiatives and the emergence of new study destinations may retain more talent mobility within the region.

By 2015, the ASEAN Economic Community aims to transform the Southeast Asian region into a common market promoting the free flow of goods, services, investment and workers.

Despite several challenges, the region is expected to see greater mobility of qualified service professionals through mutual recognition arrangements in seven professions, including medicine and engineering.

In addition, countries like Malaysia and Singapore are expected to attract more foreign students through their higher education internationalisation strategies.

For example, Malaysia recently announced that it received applications from 25 foreign universities to set up branch campuses. It plans to reach a target of enrolling 150,000 international students by 2015.

Malaysia is already the second most popular destination for Indonesian students, attesting to its emergence as a regional hub. Likewise, high-quality collaborations such as the partnership between Yale and the National University of Singapore, are likely to draw international talent.

Undoubtedly, the number of students who seek an overseas education will continue to grow, and will do so at a faster pace. It is the ‘glocal’ segment, however, that is likely to present the next big opportunity for institutions that want to increase their global profile.

The needs of ‘glocal’ students, combined with a changing institutional, demographic, economic and political landscape in an emerging Asia, demand an innovative and strategic approach to engaging with internationalisation in Asia.

Changed internationalisation strategies needed

Internationalisation strategies need to move beyond student recruitment and target collaborative relationships of varying complexity and intensity, ranging from research collaborations to short-term exchanges to in-country branch campuses.

Undoubtedly, strategies will vary according to the priorities and resources of institutions, but all higher education institutions need to be prepared to adapt to a major shift in student profiles, and corresponding engagement strategies with Asia.

To sum up, a new group of students is emerging and they have global aspirations but will find more opportunities for education and employment mobility within their regions.

This presents a vital opportunity for foreign institutions, who need to understand ‘glocals’ and strategically engage with them through innovative institutional collaborations.

As the US psychologist Arnold Glasgow rightly said: “The trouble with the future is that is usually arrives before we're ready for it.”

Source: University World News
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