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Sonali Dash, centre, an MBA student from India, chats with fellow MBA students Purnendu Nayak, left, and Sri Harsha, also from India while on break at York University's Schulich School of Business in Toronto. (Deborah Baic/Deborah Baic/The Globe and Mail)
Sonali Dash, centre, an MBA student from India, chats with fellow MBA students Purnendu Nayak, left, and Sri Harsha, also from India while on break at York University's Schulich School of Business in Toronto. (Deborah Baic/Deborah Baic/The Globe and Mail)

Careers

Canada bucks trend of falling MBA applications Add to ...

Sonali Dash looked at schools around the world to achieve her goal of getting an MBA in a country that offered an opportunity to launch a solid career in finance. And Canada was far and away the best choice.

"It was appealing to come to Canada because of the performance of the economy. And the banks remained quite good during the recession, while other countries were having problems. I want to make my future in finances and that was a strong indicator to me that opportunities will be good," said Ms. Dash, who moved to Toronto from Hyderabad, India, last month and has just started in the two-year MBA program at York University's Schulich School of Business.

It's a choice that an increasing number of foreign students seem to be making.

A stronger economy, international marketing campaigns by business schools and a government program making it easier for foreign students who do their MBAs in Canada to work here for up to three years have combined to buoy applications to full-time masters programs.

Sixty-two per cent of Canadian business schools got more applications for full-time MBA programs this year than in 2009, a study by the Graduate Management Admissions Council, an association of leading graduate business schools, shows. Some of those gains came at the expense of the U.S., where more than half of business schools that participated in the study reported a drop in applications for full-time study.

The American experience reflects the counter-cyclical relationship of higher education to the economy. Historically, recession spurs people to go back to school, sometimes to get a second degree, sometimes to switch careers entirely. This certainly happened in 2009, when applications in the U.S. peaked, the council notes.

As the recession deepens, though, household income drops, the "opportunity cost" of studying rather than working rises and applications for full-time study fall off. When the economy picks up, students go back to work and applications weaken further.

"It appears that full-time MBA programs have reached a turning point," the study's authors conclude, though Canada, it seems, has yet to peak. While another bout of economic weakness - or a rebound - could dampen applications next year, more is at play than just economics, some business school officials believe.

The admissions council points to one key difference: 12-month full-time programs at two of Canada's biggest business schools, Queen's School of Business in Kingston and Richard Ivey School of Business at the University of Western Ontario in London, Ont. Full-time programs in the United States are typically two years.

"People don't want to be out of the work force more than a year," said Amber Wallace, associate director, external relations, at the Queen's School of Business.

Applications are up about 10 per cent across the school's MBA and executive MBA programs, Ms. Wallace said.

The Richard Ivey business school has also had an increase in applications over the past year, said Niki da Silva, director of MBA admissions and recruiting. Ivey launched its one-year program in 2006.

The program "significantly reduces the opportunity cost" for students, Ms. da Silva said. "It's better for their career and it's better for their pocketbook."

At McGill University, which offers a two-year MBA program, applications are up slightly over the past three or four years, said Don Melville, director of the MBA and masters programs at the university's Desautels Faculty of Management. While that may sound lacklustre, the school moved to a self-funded tuition model from a government-funded one earlier this year, similar to that of Harvard University and the Massachusetts Institute of Technology, Mr. Melville said. That raised the cost of its MBA program from $3,500 for Quebec residents to $59,000 for all students, regardless of where they come from.

"Even with that change, applications are up slightly. It's very exciting," Mr. Melville said.

McGill "has a fair percentage of students who are career switchers," he adds. The two-year program offers better networking opportunities, plus an internship during the summer months, easing the process of changing careers.

The school recruits internationally - about half the class are foreign students. Mr. Melville also credits the federal government's move to make it easier for post-MBA students to work for up to three years after graduating with its Post-Graduation Work Permit program introduced in 2008.

"This creates an opportunity they may not have in the U.S."

Applications at York University are up again this year after a big jump last year, said Charmaine Courtis, executive director of student services and international relations at the Schulich school. Ms. Courtis credits the federal government's work permit program for Canada's relatively strong performance.

Ms. Dash, who graduated from a university in India and had worked for four years there as a consultant before deciding to take her MBA, said she plans to stay in Canada, which seems to offer more opportunity than India, when she graduates in 2012. "The new government program is very appealing to me. If the government would not allow us to work here there would be much less reason to come here."

Canada's growing multiculturalism is also a strong plus in international recruiting. Students from China, India and South Korea "often choose to go where they have family," Ms. Courtis said.

Schulich's program is also gaining an international reputation. Lasts week, it broke into the top 10 of global rankings of business schools in a survey conducted by The Economist.

But the enrolment surge is hitting nationwide. Of the 32 full-time MBA programs offered through 18 business schools in Canada, 77 per cent reported an upward trend in foreign applicants this year.

By region of origin, 65 per cent of foreign MBA students in Canada came from the Asia-Pacific, mainly India (71 per cent in the United States); 17 per cent came from Africa or the Middle East (10 per cent in the U.S.); 8 per cent came from the U.S. (4 per cent from Canada in U.S.); 5 per cent from Latin America (7 per cent in the U.S.) and 6 per cent from Europe (8 per cent in the U.S.).

Applications for the 15-month program at the University of British Columbia's Sauder School of Business in Vancouver have held steady after last year's strong gain, said Wendy Ma, director of MBA programs.

While the economic recession may have been the driving force, the difference between the numbers seen in Canada and the United States can also be traced to other factors, Ms. Ma said.

"Since [the terrorist attacks on Sept. 11, 2001] it has been harder for international students to get visas to study at U.S. schools," she said. At the same time, the Canadian government "eased up" with its three-year work permits.

"This makes Canada a more attractive destination to pursue a university degree."

Opening up Canada's publicly funded universities to foreign students paying much higher fees has also contributed to the shift, Ms. Ma said.

"Opening up our gates to include international students - actually recruiting them - is something fairly new. The Americans and British have been recruiting internationally for a long time," she said, adding that fees for Canadian MBA programs are lower than in the United States.

Still, it is possible that the Canadian cycle is just lagging the United States, and that this will be the peak year for MBA applications, a possibility that doesn't escape business school recruiters.

"We're in the middle of the cycle. If history is right, as the economy continues to recover, applications should start falling," said Ms. da Silva at the Ivey school. "It will be interesting to see what happens now. It's a trend we're all looking at."

Special to The Globe and Mail. With files from Wallace Immen

______

GLOBAL RANKINGS

The Economist magazine's Global MBA school ranking, 2010 (2009 ranking in brackets)

1 (4)

University of Chicago, Booth School of Business. United States

2 (6)

Dartmouth College, Tuck School of Business. United States

3 (3)

University of California at Berkeley, Haas School of Business. United States

4 (5)

Harvard Business School. United States

5 (1)

University of Navarra, IESE Business School. Spain

6 (2)

IMD, International Institute for Management Development. Switzerland

7 (7)

Stanford Graduate School of Business. United States

8 (9)

University of Pennsylvania, Wharton School. United States

9 (14)

HEC School of Management, France.

10 (12)

York University, Schulich School of Business. Canada

 

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