International student enrollment is a critical part of the global engagement strategy of many business schools aiming to prepare managerial talent for the world. However, many business schools are facing headwinds from a range of competitive and financial pressures to grow international enrollment. International students seek more value for their money in times of increasing costs of education and decreasing opportunities for immigration and work opportunities, especially in leading destination countries like the U.S. and the U.K. How can business schools overcome challenges and prepare for a sustainable future of international enrollment growth? What are the strategic imperatives for enhancing their value propositions and maximizing engagement with international students?
Opportunity Exists at All Levels
To better understand the competitive landscape for business schools, let us investigate the enrollment patterns of international students by key destination countries and level of education (see Table 1 below).
At the bachelor’s level, international students make up just 6 percent of all business school enrollment in the U.S., compared to over a quarter of all enrollment in Australia and the U.K. This discrepancy indicates an untapped potential to recruit and enroll international undergraduate students in American business schools, especially when demographic challenges are slowing growth in domestic enrollment.
Likewise, at the master’s level, the U.S., Canada, France, and Germany have a comparable proportion of international students in their programs and significantly lag behind the enrollment proportions of Australia and the U.K. But the share of international students at the doctoral level is considerably higher in the U.S. compared to other destinations—a reflection of reputation and quality of research.
In general, English-speaking destinations are more attractive to international students. However, the launch of English-taught master’s programs in continental Europe in the last two decades expanded new opportunities for France and Germany to attract international students. International students are also gravitating toward specialized master’s programs requiring little or no work experience for admission, a shift from traditional MBA programs requiring significant work experience. This shift is directly in line with the demand for the value proposition in terms of lower cost and higher prospects of finding jobs.
The above shows international students as a share of all students enrolled in “Business, Administration and Law” disciplines, by level of education. Source: Author’s analysis based on OECD data.
The differences, by the level of education, in international enrollment patterns for key destinations indicates that international students are influenced by a complex interplay of several variables, including cost, post-study work opportunities, duration, language, and rankings. Among these variables, the overarching motivation of career advancement is critical for many international students. While b-schools cannot influence immigration policies, they can and must invest in outreach and career success of students and alumni. One of the factors contributing to the international enrollment success of British and Australian b-schools is their proactive outreach and engagement with international students.
In sum, opportunities exist for growing international student enrollment at all levels of education; however, maximizing the opportunities would require b-schools to enhance the value-for-money proposition they offer students.
Innovation Expands the Reach
In a recent report published by Studyportals, “Megatrends shaping the future of global higher education and international student mobility,” the authors assert that higher education institutions are on the cusp of a significant transformation. Due to the interplay of many external megatrends, they will be called upon to offer more relevant, affordable, and flexible academic programs.
This transformation is prodding b-schools to respond to competition emerging from new providers of alternative forms of certificates and micro-credentials, including MOOCs and courses on LinkedIn. For example, Studyportals data indicates that as of January 30, 2019, a quarter of “Business & Management” master’s programs in the U.S. are available in online or blended formats (see Table 2 below).
More than a quarter of U.S. master’s programs listed on Studyportals also have an annual tuition fee greater than €20,000 (about US$22,500), indicating the high cost of education. By comparison, only 7 percent of the master’s programs in Germany have annual tuition of €20,000 or more. As U.S. immigration policies pose new barriers for international students to gain work experience, high-cost programs are vulnerable to significant decline, as alternative destinations with either lower-cost programs or more welcoming immigration policies become more attractive.
According to this data, the proportion of Australian programs with annual tuition fees greater than €20,000 is even higher than American b-schools. This relatively higher cost of education in many American and Australian b-schools is prompting them to be more proactive in launching flexible models of learning through online and blended learning programs.
The above shows percentage of master’s programs by tuition and format.
Source: “Business & Management” Programs listed on Mastersportal.com as of January 30, 2019. This data is indicative of the programs listed on Studyportals platform.
While cross-border student mobility and enrollment in on-campus programs remain the dominant form of engagement with international students, the continuing maturation of online and blended learning models opens new avenues of programs. For a segment of international students, blended learning offers a unique value proposition of helping them manage cost while they earn global credentials and gain valuable experience. This trend means that as students search for more value through lower investments and higher flexibility, online and blended programs will gain more traction, and b-schools must prepare to adapt their programs for this emerging shift in the demand.
“Digital-First” Outreach Accelerates Growth
As educational providers launch new programs and adopt new online and blended delivery models, the choices available for international students will continue to increase. This means that institutions must put more proactive efforts into raising brand awareness for their programs.
The institutions that reported growth in their international enrollments in fall 2018, in their responses to the Open Doors survey, cited the following factors as their top reasons for growth—active recruitment efforts (58 percent), growing reputation and visibility of their institutions (48 percent), and proactive outreach to admitted students (47 percent). As more providers and programs enter the market, b-schools will have to compete harder to gain attention and communicate their programs’ differentiation if they are to enroll more international students.
In the last decade, the maturing of internet and communication technologies, coupled with the international students’ growing preference for online programs, mobile communication, and social media platforms, has changed the way institutions define and achieve their recruitment strategies.
In 2018, 36 million users informed their study abroad choices through Studyportals websites, and of these, nearly 7.2 million (nearly 20 percent) of users searched for Business & Management programs. This massive base of users indicates that we are at an inflection point where online recruitment is moving from just one among many recruitment strategies to the most critical strategy a business school can adopt to attract and enroll international students.
In sum, the landscape for attracting international students is becoming more complex and competitive for business schools. In order to maximize the opportunities and ensure the suitability of their international enrollment, business schools must accelerate their engagement with, and outreach to, international students.
Rahul Choudaha is executive vice president of global engagement and research at Studyportals. He specializes in campus internationalization strategies with a focus on international student trends, insights, and experiences.