Weak German MBA market is growing up, claims dean

From the window of his office, ESMT Berlin’s president, Jörg Rocholl, can see two landmarks illustrating the city’s turbulent past.

In one direction is the Fernsehturm, the TV tower built by the former East German government that dominates the Berlin skyline years after the cold war. The other way is a view of the Berlin City Palace, built when the city was the capital of Prussia, which lay in ruins for decades after being heavily damaged by Allied bombs during the second world war.

Despite historic surroundings Prof Rocholl’s focus is on the future. He likens the relatively youthful ESMT, founded 14 years ago as a privately owned business school, to the tech start-ups that have given Berlin an image as one of continental Europe’s largest centres of entrepreneurial talent.

“We are still in the growing-up phase and this is what is exciting because it really means that things can be shaped,” he says.

Prof Rocholl is only the third person to run ESMT, having taken the post of president five years ago at the age of 38. At the time, he was the youngest person in the world to lead a top business school. Today, he can claim to be ESMT’s longest serving president and is confident about the next chapter for the institution.

“I have a feeling that it’s now Berlin’s time, maybe even Germany’s in lots of ways,” he says, picking up on the dynamism tech start-ups have given the city. “The start-up community in Berlin is buzzing. Maybe they see an opportunity with the uncertainty in places like London over Brexit and I wonder whether there’s a sense of that with the business schools.”

ESMT is the first German institute of higher education to take bitcoin payments

Germany has long been a backwater for business education. Business schools were few and far between, largely because the country’s education system did not lend itself to the postgraduate MBA programme. People tend to remain in full-time education to masters level, rather than return later.

ESMT was formed in part to fill that void. It now offers a full-time MBA, an executive MBA and a masters in management as well as open enrolment and customised executive education programmes. The school is trying to position itself at the cutting edge of technology and has been developing partnerships to attract MBA students to study in Germany. It is the first German institute of higher education to accept the digital currency bitcoin in payment.

Last year, ESMT joined with Frankfurt School of Finance and Management, HHL Leipzig Graduate School of Management, Mannheim Business School and the Otto Beisheim School of Management to form the MBA Alliance Germany. The partnership will jointly market the highest ranked schools in Germany and late last year took out a double-page advertisement in the international media (including the Financial Times).

“This MBA alliance is one way to just reinforce the impression that all of a sudden there is an MBA market that is very active,” Prof Rocholl says. “It is not as big yet as in the UK or in the US but has grown a lot within recent years.”

CV

Born in Soest, North Rhine-Westphalia, Germany, in 1973.

Obtained a PhD in finance and economics in 2004 and a masters of philosophy degree in 2001 from Columbia Business School in New York.

From 2003 to 2007 he was assistant professor of finance at the Kenan-Flagler Business School of the University of North Carolina at Chapel Hill. In 2007, he joined ESMT Berlin as an associate professor and was promoted to full professor three years later. From September 2010 to October 2012 he was dean of ESMT’s international business school. He has been president of the school since July 2011.

The five member schools are all internationally accredited. ESMT, Frankfurt and Mannheim have secured the “triple crown” of recognition from the AACSB, Equis and AMBA bodies. AACSB said the Berlin school offered Germany “a chance for its first world-standard business school”. The schools jointly produced 258 graduates in 2016, a fraction of the number for a single school in more developed markets such as the US, the UK or France.

With a high quality of life, thriving economy and affordable fees, Germany offers a strong return on investment for MBAs, plus good job opportunities and a simple work permit system for graduates.

ESMT is ranked second for value for money in the 2017 MBA ranking. The €38,000 students pay for its one-year MBA course is considerably less than the €64,000 charged by France’s Insead and €65,000 charged by IE Business School in Madrid. In the US, students can expect to pay six-figure sums. Columbia University, for example, charges $141,000 per year for its two-year course.

ESMT cannot afford to rest on its laurels, however. It slipped from 64th to 70th in the 2017 MBA ranking.

Prof Rocholl admits that he only started to think about business school when he moved to the US to study at Columbia in New York.

“When I went to the US I got lots of requests from my advisers, from colleagues later on who said, how is it possible that a country like Germany with such a strong economy doesn’t have a business school?”

Prof Rocholl did not have an answer to this question, but says it made him feel he needed to return to Germany to change the situation.

“There are lots of elements that make this place very attractive for students and for professors,” he says. “I would say the profile we have with respect to technology, with respect to competitiveness, innovation is there. What I think we just need is growth.”

That is starting to happen. Applications to the full-time MBA programme at ESMT were up 75 per cent last year and the school is succeeding in attracting a cosmopolitan staff, with 19 nations represented among the 37 core faculty.

It could be factors outside Prof Rocholl’s control that will have the biggest effect on the school’s future success. The UK’s vote to leave the EU and the uncertainty raised by Donald Trump’s presidential victory in the US may make continental European business schools attractive to many international students and staff.