I am currently in London, spending the month as a visiting scholar at the London Business School. Since I have been hanging around town, Adam Jones, author of the FT Management Blog, and Business Education Editor at the Financial Times, invited me in to do an interview about the economic downturn, and how it has been impacting applications to Business Schools, and the job prospects of Business School graduates. The interview is scheduled to be aired on January 26th, concurrent with the release of the 2009 FT Business School Rankings (I will post a link to the rankings and the video when they become available).

Adam and I had a nice discussion. We went over some of the points I raised in my post Crisis for MBA Grads Seeking Jobs, …and more.

Adam began by asking about Business School applications. We discussed the following:

• applications to full-time MBA programs are at an all-time high
• applications to Ph.D. programs are at an all-time high

Both of those effects are to be expected, as business school applications generally run counter-cyclically with the economy. However, I noted that for Business Schools that rely on corporate-sponsored programs (executive MBA, non-degree granting executive programs, and custom executive programs) for a good chunk of their revenue, this downturn will be especially difficult. The outlook for executive programs is particularly grim, as corporations rein in discretionary spending, and demand for such programs experience a sharp decline.

Adam then asked about the job prospects for Business School graduates. I answered:

• the job market has been challenging (to say the least) for graduates of the class of 2009
• as bad as it has been for the class of 2009, unfortunately things are shaping up to be worse (dare I say awful) for graduates from the class of 2010. While economic recovery seems likely sometime in late 2009/early 2010, layoffs continue for some time after recessions officially end. This is because those industries that start coming out of recession do not hire quickly enough to offset losses in the industries that continue to feel the effects of the recession. In addition, even when growth begins again, firms are reluctant to hire at first so as not to expand if there is a reversion to recession (i.e., a double-dip recession). Instead, they prefer to do more with less (asking existing workers to put in more hours, work overtime, etc.).
• the job prospects for 2011 graduates are uncertain, as I expect the post-recession recovery to be a slow one. To me, the immediate growth engine for the U.S. economy moving forward is unclear. I see some potential in alternative energy, nano-technology, and biotech (specifically, genome mapping and its associated applications). However, whether those industries will truly grow fast enough to bring robust growth back to the economy is uncertain. Moreover, although it is likely that the global economy will return to growth in 2011, there is a decent probability (at least in the U.S.) that the recovery will be a jobless one.

We also discussed several other topics. For example,

• Adam asked how finance students were faring given that there had been so many layoffs in the financial sector. To that I responded that my experiences have been that finance students, in particular, were becoming more flexible with respect to the kinds of positions they have been willing to consider. Many are now open to consulting, general management, accounting, and other fields. In addition, I shared some anecdotes about students of mine who had been looking for jobs in non-traditional markets – exploring opportunities in places like Dubai, Abu Dhabi, continental Europe, and Asia. At this point, many are willing to go just about anywhere for gainful employment.
• Adam also asked about the types of electives that students were considering in this environment. I mentioned that I had been noticing an increasing interest general management courses, and in general management as a major.

More to come…

This entry was posted on Wednesday, January 14th, 2009 at 7:52 pm and is filed under Business Schools, Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.