The situation of Weber State College in Utah is hardly the same as that of UCLA, and the UC Davis Graduate School of Management would seem to have little in common with BYU, which is funded by the Mormon Church. Yet, diverse as our missions, resources and settings, we are all committed to producing the next generation of men and women who will run businesses, governments and non-governmental organizations in the next generation.
While our conference agenda included management school issues surrounding globalization of our curriculum and changes in accreditation standards, the red elephant in the room was the economy and everyone, no matter what their apparent circumstance, is affected in ways that the group of us were only beginning to imagine.
A financial meltdown and shrinking economy translates into clear losses of opportunity and financial strains and these are some of the worries I heard from deans.
- The inability of students to pay even in-state tuition. Parents and some working professional MBA students have been using home equity lines of credit to pay for degrees; the slump in housing prices and access to credit will limit access to education for some student, or delay it
- Public universities, often but not always tied to state budgets, are concerned about “poaching” from well-endowed private universities. The loss of the best faculty, and dilution of faculty-teacher ratios, is a real concern of all but the most elite universities.
- Some state universities in the US, including the Universities of Virginia, Michigan and Colorado, have already become de-facto private universities because their states’ legislatures provide little or no financial support for higher education. Now others are looking at that option. Should we cut ties with our states in order to have more programmatic and financial freedom? Schools with minimal funding, but tied by state mandates, are considering supporting this especially when they can generate income from executive education and research grants.
- I find it ironic that private institutions typically have the largest endowments. As one public school dean cynically noted “the way to get an endowment is to charge high tuition and your alumni will give you money.”
- Schools in major corporate centers have depended on generous support for business education for current students and executives. Now there is concern that employer tuition assistance will wither with falling corporate revenues, and impact executive education.
- Major research universities are concerned that state and federal research grants will impact the support of doctoral students and faculty researchers - threatening research missions. The shortage of new faculty in some business disciplines – already tight – could make it difficult for some schools to maintain accreditation standards, which require substantial proportions of Ph.D.-level faculty.
The Other Side
There are always upsides, or at least new possibilities, during any crisis, as any repo-man can tell you. While much of the conversation was glum most business school deans were looking for a bright spot, or at least alternate ways to think about what they could do during a downward economic cycle.
- Finance faculty will be easier to find as Wall Street releases a slew of highly educated finance experts; deans seemed universally happy to see a probable loosening in the supply of our most expensive faculty experts. Indeed, the Wall Street Journal had an article on the last day of our conference discussing the conditions of work for business school faculty, a happy indicator for deans.
- In recent years some b-schools have started one-year masters programs in financial engineering to develop high-level math skills used in financial markets. The future demand for these programs is under question and the resources could be redirected.
- There will be a major acceleration in the movement overseas of MBA programs to where the economies and demand for sophisticated managers are growing. As one dean put it, “Shanghai, Mumbai, Dubai - or Good Bye”. Even if we have a global recession, the growth rates of China, India, and places such as the United Arab Emirates will grow much faster than North American and European economies. There are literally hundreds of business programs emerging in these settings where management talent is in great demand, and where established business schools are flocking to create programs, sometimes in partnership with local colleges and universities.
I was astounded to hear that Montana State University at Bozeman is considering a Middle East program, and that Malibu-based Pepperdine University now owns six non-US campuses!
- We have all been globalizing our curricula and many schools now require a study abroad component for their MBA students. (Because we have so international a student body now, I’m not sure that makes sense for UC Davis MBA students although many choose to do global study). Europe is no longer a favored destination for study abroad for many students as the global economy reaches beyond Rome and London. Instead schools want students to go to places where they are “culturally uncomfortable”. This is not only a better personal learning experience it is often in underdeveloped areas that the business opportunities are greatest.
- Schools are working hard to incorporate their alumni abroad into their campus networks, seeing them as critical social and intellectual capital as universities put stakes in foreign soil.
- Interest in energy as an industrial sector will boom. If there are new sectors that deans look toward further supporting it will be health care – already a large economic sector – and energy. Schools on the slopes of the Rocky Mountains including the Universities of Alberta, Montana, Colorado, and New Mexico sit atop or near oil and coal deposits and their economies should literally heat up. Indeed, there are no taxes in the Province of Alberta. The rest of us on the Pacific Coast and in the Southwest are in regions developing alternative energy sources such as wind, solar and biomass. We all expect energy, energy efficiency, and sustainability to play larger roles in our curricula because business and students are demanding them.
Many of the possible changes I have mentioned are already taking hold at UC Davis Graduate School of Management. The students want to go to Vietnam, Shanghai and South America on field trips, and do. Germany and France are for vacations, not business study. Our students are active in learning and promoting sustainable business practices, developing “green” financial portfolios, and jumping on opportunities to work on commercializing alternative energy technologies coming out of the campus.
What do I plan to do to help us through the trough? I’ll work on strengthening our alumni network, which always proves helpful in finding jobs for students and fellow alums in tight job markets. I’ll also be trying to remind our alumni, friends and students that private support isn’t just for private universities and that a public university is a great private investment too.