Even in the light of the crisis that left a deeper mark on Europe than on the United States, Europe remains a great place to follow the MBA route. Due both to the excellent schools it boasts and for the good career opportunities it offers. But not only that…
The EU is an amazing place to work and live - 28 nation states with impressive cultural wealth and historical heritage. Altogether, it has the highest GDP in the world. Combined with good levels of respect for the rule of law, the long-standing trade and industrial traditions in some countries and its stable institutions, this makes Europe a vibrant place to do business. And if you get your degree in any of the member states, it is automatically recognised in all the rest. So the choice for pursuing an MBA in Europe comes naturally.
According to a GMAC survey, one-year full-time European MBA graduates were the most highly paid in the world in 2013, with a median starting salary of 101,093 USD. The remuneration of MBA graduates in Europe has traditionally been higher than in its biggest competitor, North America. For the classes of 2000-2012, jobs in Europe paid a median 108,355 USD, compared to “just” 100,000 USD in the United States.
Why study in Europe?
There are several factors to consider when debating where you should apply for your MBA. A couple of the most crucial are the quality of education and the career prospects one is looking for. Both of these are top-notch in Europe. If we take the Financial Times 2013 rankings for European business schools, we see that all programmes in the top 10 have remained there for the past three years. This is very important as it is a trustworthy indication and testimony to the programmes’ quality and proven track record. But do not trust rankings uncritically!
You shouldn’t let the rankings be the main factor when deciding where to apply. Your background, application package and overall profile may not be right for the leaders in the rankings, such as INSEAD, HEC Paris, IE Business School, IESE or LBS. Instead, you may be a better match for Maastricht University School of Business and Economics, for instance, which is ranked at number 67. The key for candidates is to approach each school’s profile and compare it with their own profile and career goals and to look for a match. Overall, the schools in the top 100 all deserve to be considered – they are in the top one percent of the best business school in the world!
Conventional wisdom claims that business education is global and that what one learns in a good school in Asia should also be applicable in Europe and the USA. Even though this is a valid argument, the careful selection of a postgraduate school is crucial for your prospective career development. One of the undeniable reasons for this is the importance of the networking opportunities a student is offered while completing an MBA degree. Furthermore, your programme's location goes hand in hand with potential placement opportunities and other potential professional positions in the country where the business school is located... So, if you want to work in Europe after completing your MBA degree, the most reasonable move would be to do your postgraduates studies in Europe.
Expatriates have other advantages if they decide to apply for an MBA in Europe. Europe is famous for the good level of internationalisation of business schools – in 2012, 83% of the student pool was foreign, compared with 38% in America. This cultural diversity is a h4 point for the European MBA. Joana Jo Fratini, a Brazilian who has management experience in the US, wants to go back to her home country and was enrolled in the MBA programme at ESADE in Barcelona. “I really feel like I made the right decision to come to Europe because thewhole educational system — the interaction with the professors, the interaction with the students — is so much more like the way that business is done in South America than what Iwas exposed to in the US”, she explained for the Boston Globe.
Jobs for foreign students
Foreigners have better chances of finding a job in Europe while still studying, according to the 2013 GMAC statistics - 56% of them received a job offer before graduation, while in the United States that figure was 42%. According to this research, the percentage of foreigners with an employment offer in Europe is even higher than that of domestic students! This may be due to the fact that non-European students are more proactive when it comes to job hunting.
The crisis has made some foreign candidates unjustly overlook the opportunities offered by European business schools. In 2013, only 38% of one-year full-time MBA programmes reported increased application levels. Not a very impressive result perhaps, but still 1% higher than in the previous year. But candidates from outside the continent still comprised the largest proportion of applications for one-year full-time MBAs – 55% – with Central and South Asian citizens being the largest group. 54% of the European schools experienced a drop in foreign application volume and only 31% - a growth. Those numbers indicate that the economic hardship around the world has affected business education just like any other sphere. On the other hand, 61% of part-time MBAs – a more flexible educational form – in Europe reported increased or stable application volumes. The job market in Europe is still challenging, but high quality education from a respected institution represents a competitive advantage that can make a candidate stand out in the crowd when applying for jobs. The prospects for business degree holders still remain h4, and MBAs are the most desired qualification in the eyes of potential employers. Statistics show that 72% of employers, when asked by GMAC, expect to hire people with an MBA degree in 2014 – a rise of 1% compared with 2013. And the following is how companies see the 2014 prospects for business school graduates. The biggest number - 45% of the companies - forecast that they would increase the MBA graduates’ salaries with the rate of inflation; 42% say they will keep the salary level the same as the previous year; 11% envision that the remuneration will rise above the inflation rate and only 2% expect lower salaries. But as the market is becoming more globalised and competitive, companies will place higher expectations on their prospective employees, hence preferring MBA grads with specific skills. There is a trending preference towards graduates not only with outstanding academic performance but also with solid professional experience. As one employer in Europe explained, “there is a considerable market for business school students, but for sure for those students who have also provenwork experience in a technical field. The combination of clear technical abilities with an MBA study makes candidates more desirable”. The interviewee also added that other key factors are local language skills. So, if you master rare European languages, you have a better shot at landing a job in these respective countries.
Is it only the state of the economy?
Historically, the American market has more opportunities for MBAs with a local diploma than do European MBAs for European business school graduates. Research of the classes 2000-2012 reports 7% unemployment in Europe and just 4% in America. From the class of 2013 in September, 95% in the United States were employed, whereas 82% of the professionals with European MBA had jobs.
Apart from the differing job market situation on both sides of the Atlantic, this result probably reflects that the MBA in Europe is still developing – from an educational perspective and in terms of the wider recognition of the degree. This is not to diminish the quality of European schools, however, as many of them are on equal footing with or even better than their American counterparts.
If we are to look for a deeper reason, other than the state of the economy, we would probably look to history. The MBA is still perceived as an American offshoot. The first MBA was created in Harvard in 1908, and the first European business school – INSEAD – launched the first MBA in Europe in 1957. The US has the advantage of half a century over Europe in this respect and the value of several decades should not be underestimated.
The battle of the titans – Europe vs USA
But the trend in recent years is for European schools to catch up with American schools, despite the ongoing ups and downs. Some hold that the New World started losing its indisputable dominance in business education after 11th September. The American authorities imposed stricter visa controls and regulations in the aftermath of the terrorist attacks which opened the doors for European schools to join the competition. The result is that nowadays even schools in countries with relatively scarce traditions in MBA are making it into the game. The New York Times wrote: “Historically seen as a quintessentially American degree, the Master’s in Business Administration is coming of age in Germany,which is beginning to compete with other European M.B.A destinations such as Britain,France, the Netherlands and Spain”. Jörg Rocholl, president of the European School of Management and Technology put it this way: “We are profiting from the fact that Germanymade it through the crisis so well”.
Value for money
The value for money advantage of Europe is mainly due to the generally shorter length of the MBA programme, in comparison to the USA, when taking into account the salaries earned by graduates, the fees they paid for the degree, the opportunity cost while studying and other expenses. In the Financial Times rankings, 7 of the first 10 schools in terms of value for money are European. They are the Warwick Business School, Lancaster University Management School, Vlerick Business School, The Lisbon MBA, University of Cambridge: Judge, Mannheim Business School, and Tilburg University, TiasNimbas. The first American school comes at 35th place – Hult. All this indicates that even if a school is not listed in the top 10 of the general MBA rankings, it may still be a great investment in terms of quality and financial return. In America, the two-year MBA is still the norm, although there are an increasing number of exceptions to this. In Europe, the more popular length is roughly around one year. That makes it cheaper in most cases and thus the opportunity cost of the American MBA becomes higher. Two-year programmes do have certain advantages – one has more time to acquire the knowledge and skills necessary to make it big in the business world and to go through the process of learning and researching. But in this contest, however arbitrary it may seem, it is clear who has the upper hand.