Welcome Workshop 1: The emerging Master Market (Room: Auditorium 2) HRK German Rectors' Conference Projekt nexus Concepts and good practice in Higher Education

25 October 2011

New perspectives for Master Study Programs in Europe

The opportunities of internationalization and the case of the MBA 25, October 2011 BOLOGNA SEMINAR - BERLIN 2

The presentation and paper that will follow is within the VISION practice on “the universities of the future” available at www.visionwebsite.eu

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AGENDA • The opportunities of internationalisation • Marketing Universities • MBA as the most market oriented master program • Rankings and positioning of European schools • Strategic choices for the future 4

Economic Value

The Net Present Value of Attracting a foreign student – Illustrative (Not EU student, London, in Euro, per year)

Source: Vision analysis on Vision, The Economist, University of London data

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The market size

• 205% = Growth rate between 1998 and 2008 (in the meantime world income per habitant increased of about 150%) • 15,000 € - Estimated value per student, 1 year • 40 – 50 Billion € = total market

Source: Vision processing OECD and UNESCO data

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Driver of internationalization growth (2) A forecast to 2020 Number of international students (million, per cent, 2020 – 2008) 2.10

0.67 mio

6.13 mio

23%%

mio

80% 77%

3.34 mio - 0.02 mio

2008

population in university age

Propensity to study

internationalisatio n of students

2020

drivers of growth Source: Vision analysis on UNESCO, OECD, World Bank data

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Market fragmentation Break down international students per origin (2008)

Germany 2,8 %

Turkey 2,0 %

Korea 3,5 % India

5,5%

France Others top Russian Fed. Japan 15 United States Malaysia Morocco Kazakhstan Uzbekistan Canada Italy

1,9% 1,8% 1,6% 1,6% 1,5% 1,5% 1,4% 1,4% 1,4% 1,3%

Weight of top fifteen IS origin countries on selected worldwide macro data (2008) 62,4%

China 15,3 %

52,3% 44,4%

Others (not top 15) 55,6

Source: Vision analysis on UNESCO, OECD, World Bank data

International students

Share of world GDP

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World population 8

Market share forecast Market share, Incoming international students, 2000, 2020 (forecast) 24,1%

15,6%

11,3%

2000

2020

9,5% 8,5% 7,0% 5,2%

6,7% 5,6%

5,4%

5,7% 4,8% 3,5%

3,4%3,1%

1,3%

1,8%

2,3% 1,3% 0,2%

United States

United Kingdom

Germany

France

Australia

Canada

Japan

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Italy

Spain

Korea

9

Countries ranking

27%

International students incoming as a percentage of students in the country

26%

25 5%

International students outgoing as a percentage of students in the country

23% 22%

17% 16%

15%

15%

20% 24%

14%

7%

19% 21%

22%

13%

11% 11%

14%

10% 5%

4%

2% Iceland

New Zealand

Austria

Australia

3%

1%

1% Switzerland

4%

3% Ireland

Canada

United Kingdom

Germany

France

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Competitive analysis (1) New comers

Stars

Growth rate Students Incoming 2004 - 2008

250%

Russia

-

?

Italy Spain

Out bounders

100%

Cash cows Japan France

India UK China

USA

Germany

Brazil 0%

-50%

10%

20%

Market Share on Students Incoming 2008

Source: Vision analysis on UNESCO, OECD, World Bank data

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Market share on BRIC (2008)

Competitive analysis (2)

30%

Specialized in high growth markets

Leaders USA

25% 12%

Japan

UK

Canada

10%

Germany

Regional players 5%

Australia Russia Italy

Research oriented France

Spain

0

6%

14%

Market share on Top 7 incoming Countries (2008)

20 %

Source: Vision analysis on UNESCO, OECD, World Bank data

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Opportunity for Europe Preferred destination, Would be international students, 2008

#1 Priority #2 Priority Latin America Middle Europe & East Carribean

Overall ranking

Africa

Asia Pacific Europe

Europe

37%

28%

23%

44%

33%

33%

26%

Asia Pacific

24%

7%

44%

22%

3%

10%

26%

North America Latin America & Carribean

19%

13%

23%

18%

27%

20%

12%

9%

10%

2%

6%

37%

7%

17%

Africa

7%

39%

2%

6%

0%

8%

9%

Middle East

5%

3%

6%

3%

0%

27%

10%

Geographic priority attributed to

North America

Sources: Vision on IAU, Global Survey Data (2005)

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Marketing Universities (1) Measuring economic value per segment (in euro) IMPACT ON SUPPLY CHINESE UNDERGRAD

FUTURE

STUDENTS 158

NPV 34.5 mio

COUNTRY

INDIAN PHD 1.5 MIO REVENUES OPPORTUNITIES AVERAGE VALUE 34K

UNIVERSITY COSTS RISKS

NATIONAL CITY OTHER SEGMENTS

Marketing Universities (2) Identifying competitive advantages on segments’ buying factors

• The marketing in global markets of innovation - Identify competitive advantages

Source: Adapted from a Vision & Value project

MBA as the “golden egges goose” within master programmes

• Tuition are around 85 thousand (82 for the 16 – 100 BS and 92 for the top 15) USD and salaries are around 90 thousand (81 for the 16 – 100 BS and 111 for the top 15) USD • 13,500 business schools of which 633 (503 USA) accredited by AACSB (Association to Advance Collegiate Schools of Business) • Professor’s average salary (for AACSB) 169,000 USD

• Constant increase (for AACSB) of average enrollment from 411 (2001) to 443 (2010)

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The end of the MBA’s golden age? as a Martket (1)

US Full-time MBA programmes, $’000 100 Average salary of graduates* 90 80 70 Tuition Fees 60 50 40

30 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: The Economist, * Upon Graduation

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The end of the MBA’s golden age? as a Martket (2)

Number of GMATs taken, ’000 Rest of the World

Asia

United States

300 250 200 150 100 50 0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Vision on Graduate Management Admission Council’s data

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2011 Ranking Ranking 2010 2010

Ranking 2011 2011

2 1 6 11 4 3 12 7 10 5 13 14 19 9 8 21 20 16 23 28 29 18 15 22 33 24 37 36 27 25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

0

dartmouth chicago imd (switzerland) virginia (darden) harvard berkeley columbia stanford york (canada) iese (spain) mit new york stern lbs (uk) hec (france) wharton carnegie esade (spain) northwestern insead (france) duke bath (uk) southern california cranfield (uk) ie (spain) cornell yale ucla emory hult michigan

20

40

60

80

100

120

140

107 108 130 101

MBA ranking and salary after graduation

115 107 106 119 93 119 110 100 105 129

114 94 111 107 117 102 110 94 106 103 97 98 97 93 90 99

Source: Vision on The Economist’s data

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The position of Europe Share of top 100 Universities, ARWU

Share of top 100 Business School Others; 10

Others; 16 Asia; 8 Asia; 5

usa; 49

usa; 53

EU ; 26 EU ; 33

Source: Vision on ARWU’s data

Source: Vision on The Economist’s data

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From “absolute values” to “value for money” ranking ranking 2011 1 2 3 4 5 6 7 8 9 10 11 12 13

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

institution dartmouth chicago imd (switzerland) virginia (darden) harvard berkeley columbia stanford york (canada) iese (spain) mit new york stern lbs (uk) hec (france) wharton carnegie esade (spain) northwestern insead (france) duke bath (uk) southern california cranfield (uk) ie (spain) cornell yale ucla emory hult michigan

salary post salary/ increase/ tuition tuition

salary

salary increase

pre salary

increase salary

duration

tuition

107

65

65

42

21

101

1,1

0,4

108

38

78

30

21

102

1,1

0,3

130

68

77

53

11

58

2,2

0,9

101

58

64

37

21

99

1,0

0,4

115

48

78

37

24

102

1,1

0,4

107

48

72

35

21

105

1,0

0,3

106

41

75

31

20

106

1,0

0,3

119

51

79

40

21

110

1,1

0,4

93

127

41

52

12

63

1,5

0,8

119

150

48

71

19

94

1,3

0,8

110

47

75

35

22

106

1,0

0,3

100

61

62

38

22

89

1,1

0,4

105

67

63

42

18

80

1,3

0,5

129

132

56

73

16

60

2,2

1,2

114

46

78

36

21

108

1,1

0,3

94

64

57

37

21

108

0,9

0,3

111

140

46

65

15

76

1,5

0,9

107

46

73

34

22

108

1,0

0,3

117

38

85

32

10

75

1,6

0,4

102

75

58

44

22

101

1,0

0,4

110

145

45

65

12

34

3,2

1,9

94

40

67

27

22

110

0,9

0,2

106

107

51

55

12

49

2,2

1,1

103

87

55

48

13

78

1,3

0,6

97

64

59

38

22

103

0,9

0,4

98

64

60

38

21

106

0,9

0,4

97

46

66

31

21

104

0,9

0,3

93

88

49

44

22

87

1,1

0,5

90

260

25

65

12

56

1,6

1,2

99

47

67

32

20

100

1,0

0,3

years to recover investment 5,1 8,0 2,5 5,7 6,9 6,7 7,5 6,2 2,0 2,4 6,9 5,4 4,1 1,8 6,8 5,7 2,1 7,2 4,5 4,8 1,2 8,7 1,8 2,9 5,6 5,5 7,2 4,1 1,2 6,7

Source: Vision on The Economist’s data

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The value for money ranking ranking 2011 1 2

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

18 19 20 21 22 23 24 25 26 27 28 29 30

years to recover investment

institution

salary (usd)

increase salary (usd)

duration (months)

tuition (usd)

post salary/ tuition

salary increase/ tuition

bath (uk) hult hec (france) cranfield (uk) york (canada) esade (spain) iese (spain) imd (switzerland) ie (spain) emory lbs (uk) insead (france) duke dartmouth new york stern yale cornell carnegie virginia (darden) stanford berkeley michigan wharton harvard mit northwestern ucla columbia chicago southern california

110

65

12

34

3,2

1,9

90

65

12

56

1,6

1,2

129

73

16

60

2,2

1,2

106

55

12

49

2,2

1,1

93

52

12

63

1,5

0,8

111

65

15

76

1,5

0,9

119

71

19

94

1,3

0,8

130

53

11

58

2,2

0,9

103

48

13

78

1,3

0,6

93

44

22

87

1,1

0,5

105

42

18

80

1,3

0,5

117

32

10

75

1,6

0,4

102

44

22

101

1,0

0,4

107

42

21

101

1,1

0,4

100

38

22

89

1,1

0,4

98

38

21

106

0,9

0,4

97

38

22

103

0,9

0,4

94

37

21

108

0,9

0,3

101

37

21

99

1,0

0,4

119

40

21

110

1,1

0,4

107

35

21

105

1,0

0,3

99

32

20

100

1,0

0,3

114

36

21

108

1,1

0,3

115

37

24

102

1,1

0,4

110

35

22

106

1,0

0,3

107

34

22

108

1,0

0,3

97

31

21

104

0,9

0,3

106

31

20

106

1,0

0,3

108

30

21

102

1,1

0,3

1,2 1,2 1,8 1,8 2,0 2,1 2,4 2,5 2,9 4,1 4,1 4,5 4,8 5,1 5,4 5,5 5,6 5,7 5,7 6,2 6,7 6,7 6,8 6,9 6,9 7,2 7,2 7,5 8,0

94

27

22

110

0,9

0,2

8,7

Source: Vision on the Economist’s data

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Some problems and opportunities

1. Notwithstanding globalization only 14% of case studies deal with cross border issues and for only 6% the issue was central 2. Notwithstanding the crisis that is changing paradigma only 1 of 32 cases newly added to the 2011 – 2012 curricula of HBS general management courses refers to the financial crisis (2009) 3. Notwithstanding the rise of Chinese (30,000 GMAT takers from 10,000 in 2005) and Indian (between 1,500 and 2,500 business schools) market only two of the 100 top business schools are from these two countries

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Possible strategies for MBA programmes Executive

New segments LLL

Country Specialzation Industry

Branching out Possible strategies for

Multinazionalization

MBA progrmas

Joint Ventures

Part-time

Efficiency

One year

LSE - LBS option

Online

Source: Vision

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www.visionwebsite.eu [email protected]

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