Pandemic accelerates growth in online MBAs

Before the Covid-19 pandemic, some management professors and MBA heads feared that online education would cannibalise the traditional business school experience of campus lectures and study groups. What the past year has shown is not only that everyone can teach digitally, but that the two forms of higher education — digital and campus-taught — can coexist.

Online MBA programmes have also found a new and potentially much larger audience of people for whom digital is the only way they want to develop their management and business skills.

Much has been made by school admissions teams of the rebound in demand for campus-based MBA programmes. Applications for the one-year version of such courses rose 11.6 per cent last year, according to the 2020 annual survey by the Graduate Management Admission Council. In the previous four years, most business schools surveyed by GMAC reported falling applications. Yet last year’s upswing was far surpassed by the growth in online MBA courses, applications for which increased by 43.5 per cent, following several years of smaller increases.

Online MBA courses are evidently no longer a niche activity, but have become as large and selective in their intake as their campus-taught counterparts. However, the two types of course are catering to different demographics.

“There is a bifurcation happening,” says Rahul Choudaha, GMAC’s director of industry insights and research communications. “There is a segment that is seeking an immersive experience, who want to study on campus, but there is a separate segment embracing the online MBA. There is a difference in demographics, with those choosing online MBAs generally older.”

Half of those who say they prefer an online MBA are now aged 34 or over, Choudaha notes. “Online is particularly attractive to those who want to hold on to their job but also embrace career progression,” he says. “As online courses become more mainstream and more brand-name schools get involved, we are seeing more of these people coming off the fence about getting a management degree and applying to an online course.”

London calling

Thomas Hellwig, 35, who became a father at the end of 2020, is one of those. He and his wife and daughter live in Frankfurt, about an hour’s drive from the campus of WHU — Otto Beisheim School of Management, which is ranked 54 in the latest Financial Times Global MBA ranking list. But instead of getting in his car to attend business school, he boots up his laptop to study on the Global Online MBA run by London’s Imperial College Business School.

Hellwig, who grew up in Munich but has spent five years working in the UK in senior roles in the insurance industry, likes the cross-border connection with London. It gives him a chance to return during the campus-based study sessions that were designed into the course — in part to help students bond with one another in person.

“I wanted to keep my connections to Britain alive,” Hellwig says. “Also, Imperial is a lot more international in terms of its student intake and outlook than most German universities.”

The pandemic has helped to crystallise some of the benefits of studying online, according to Andrew Crisp, owner of CarringtonCrisp, a research consultancy that specialises in the education sector.

“We did a study for a London institution last year and the question about employer acceptance was raised by them,” he says. “There was no question that they would accept an online MBA and I sense it is driven by three factors. First, the same employers have successfully used online learning themselves over the past year. Second, some of those doing recruitment have used online learning as part of their own degree — which wouldn’t have been true a decade ago. And, third, some leading business school brands have embraced online learning.”

Straight to digital

Some world-renowned education institutions, which were later than others in creating business schools on their campuses, have forgone creating classroom courses, instead developing MBAs delivered entirely online.

See the full 2021 Financial Times Online MBA directory as well as the whole report on Monday March 22 at ft.com/online-learning

In 2016, UCL School of Management cancelled plans to run an MBA course that would have run from its London campus. But in June 2019 it launched an online MBA programme in partnership with the online education platform 2U. The course currently has two cohorts of 40 students. “We didn’t enter the full-time MBA market because we felt it was saturated,” says Paolo Taticchi, the school’s deputy director of MBA and global engagement. “We entered the online market because we saw an opportunity.”

The online MBA has come of age during the pandemic, but that does not mean that meeting to study, network and develop new skills will not continue to be provided offline. Many online MBAs, such as Imperial’s Global Online MBA, already offer the option to study for some course units on campus.

Nevertheless, the number of schools offering online-only MBAs is reaching a tipping point, according to data compiled by the Association to Advance Collegiate Schools of Business, which accredits MBA providers. In the 2014-15 academic year, 22 per cent of schools surveyed by the AACSB offered at least one online MBA programme, but by the 2019-20 academic year that had risen to 39 per cent of schools.

That trend looks set to continue. This month, for example, Berlin’s ESMT announced its first purely online MBA, with classes starting in September.

Tim Mescon, AACSB executive vice-president, thinks the pandemic has changed perceptions among prospective students. “[It] has opened the eyes of global applicants to considering online study options they previously never would have imagined,” he says.