Sparks of brilliance

I am old enough to have experienced several economic crises in my working career, and that helps put today's malaise in perspective. Tax revenues fall and social spending for unemployment support and related programmes rises. And more often than not, when governments have responded by attempting to cut public spending, they have axed higher education (HE) budgets more than other categories of spending. A graph of HE outlays as a per cent of GDP in the US and UK over time would show a cyclical pattern within a fairly tight range. This pattern has several implications for business schools internationally.

Business schools in fiscally challenged countries once again are likely to see their parent university become more wary of their independence. The ability of B-schools to operate as devolved parts of universities is a recurrent theme. B-schools claim that market forces require them to pay faculty on a different pay scale, provide more services to students because of the higher fees they pay, and invest in closer-to-market activities such as executive education. When a centre is faced with hard choices due to government funding cuts (and less donor support), it tends to seek more cross-subsidy and control.

Of course, this won't apply to all business schools. Some are essentially divorced from a parent university. And some are in regions or countries — especially in Asia and the Middle East — that have weathered the recession fairly well.

Arguably, it is easier for governments in these places to sustain their investments in HE. As a result, we have already seen an impressive rise in the fortunes of business schools such as Hong Kong UST, Indian Business School, Nanyang Business School and the Chinese University of Hong Kong. They have been repatriating native brainpower, recruiting non-native talent, and investing in world-class equipment and facilities.

It will be an enormously hard sell, however, to lobby governments to maintain their HE spending. Facing hard choices, are governments likely to favour HE rather than health care, defence or even primary and secondary education? History suggests otherwise.

Increasing revenues

It would be better for universities to take bold action on their own, moving away from the vagaries of public largesse.

First, seek ways to reduce reliance on government funding. Second, increase the share of revenue coming from sources other than fees, including non-degree teaching (executive education) and consultancy. Third, replace waning government research funding with corporate research partnerships. Fourth, explore other alternative, creative sources of revenues, including validation activity, selling testing services, and commercialising activities such as libraries, museums, catering, car parking and events. Fifth, act more like a business in managing costs; make sure to organise efficiently. >

International mobility continues to be a key trend. In keeping with the trend, Manchester Business School's strategic partnerships have also continued to evolve. Last November saw the launch of a new collaborative DBA programme with one of China's leading universities and business schools, Shanghai Jiao Tong University's Antai College of Economics and Management.

MBA applications are holding up well globally. We keep a tight cap on the number of full-time MBAs because of our particular model: an intensive 18-month programme with several high-level company projects that require a lot of faculty supervision. This year's class is particularly strong with a diverse range of sectors, reflecting the new breed of post-credit crunch candidates.

Ethical leadership

The impact of the recent economic and financial crisis on management education has been very apparent. The result has been the increasing importance and emphasis on leadership, especially ethical leadership; good corporate governance; and corporate social responsibility. On the other hand, there is less emphasis on (and more suspicion about) financial models and financial innovation.

More widely, entrepreneurship and innovation will play an increasingly important role in business education. The aim is to inspire entrepreneurs and emerging business leaders to combine their talent with rigorous business understanding so that they are able to turn their visions into commercially successful ventures. MBS' Enterprise Centre brings together entrepreneurship and innovation expertise from across the University of Manchester.

Our experience suggests that despite the challenging economic landscape, an MBA is still a worthwhile investment and our students have continued to find good jobs, not just in the UK and continental Europe but in Asia and the Americas, and not just in banking and finance but in other sectors as well.

— The writer is Dean of Manchester Business School.