Europe Becomes New Destination for M.B.A.’s

http://www.nytimes.com/2013/05/28/world/europe/european-mba-programs-gaining-popularity.html

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Junayd Mahmood is not your typical business school student. He did not spend years plotting out a graduate school career, going to M.B.A. fairs and compiling a list of dream schools. He decided quickly to apply to only one program.

As an American doing a full-time M.B.A. in Germany, however, he is part of a growing trend: An increasing number of non-European students are going to Europe for more international and more affordable M.B.A.’s.

“I don’t really see geographical location as a huge determinant for what I’ll do once I graduate,” said Mr. Mahmood, who is from Middletown, New York. He chose the European School of Management and Technology in Berlin for its international network and hands-on curriculum.

Tuition is €29,000, or $37,000, which is relatively affordable compared with M.B.A.’s at some top U.S. schools, partly because the Berlin program is only one year and nearby rents are reasonably inexpensive.

Historically seen as a quintessentially American degree, the Masters in Business Administration is coming of age in Germany, which is beginning to compete with other European M.B.A. destinations like Britain, France, the Netherlands and Spain.

“We are profiting from the fact that Germany made it through the crisis so well,” said Jörg Rocholl, president of the European School of Management and Technology.

Located in the renovated East German State Council building, with a smaller campus in Cologne, the E.S.M.T. business school was founded in 2002 by some of Germany’s best-known companies, like Bayerische Motoren Werke, Daimler, SAP, Siemens and Deutsche Bank.

Despite the distinctively German names of its corporate backers, the school prides itself on its international nature.

The 32 faculty members who teach its M.B.A. program come from 19 nations. Only 12 percent of students in the global M.B.A. program — which, like most, are taught in English — are German, while 23 percent come from other European countries. The largest contingent, 38 percent of the student body, are from Asia, while 23 percent come from North America.

European graduate management programs received more than 90,000 Graduate Management Admission Test score reports from applicants during the 2012 testing year, marking both an all-time high and a 45 percent increase compared with 2008, according to the Graduate Management Admission Council, which administers the standardized test.

More striking, the number of GMAT scores received by German institutions grew more than 330 percent to reach nearly 6,000 during that same time period.

While the admission council’s numbers do not necessarily show how many students applied, gained admission or graduated from M.B.A. programs, they do show that more applicants took the first step to get into European schools.

Germany, which did not even rank in the top 10 choices for West Europeans seeking graduate business degrees in 2004, is now the fifth most popular destination among Europeans and the 10th most popular among global GMAT test takers.

While many business students still want to study for their M.B.A.’s in the United States — once seen as the mecca for both business and business schooling — trends are changing.

In 2004, 43 percent of West Europeans sent their GMAT test scores to U.S. programs; in 2012, that number dropped to 28 percent.

“I always knew I would go back to school, and I always hoped I would go abroad,” said Leslie Koch of California, who is enrolled in a full-time M.B.A. program at the Mannheim Business School in Germany.

“So why don’t I just kill two birds with one stone?” said Ms. Koch, who is hoping to find work in the United States once she obtains her M.B.A. from Mannheim.

Mannheim is consistently ranked as one of the top business schools in Germany, and Ms. Koch believes that the reputation would give her an advantage with German businesses based in the United States.

“I thought it would be really interesting to have this international-savvy,” she said.

The birthplace of European M.B.A.’s is Insead. With campuses in Singapore, the United Arab Emirates and France, the school’s first program was introduced in 1959 in Fontainebleau, an hour’s drive south of Paris.

“In order to grow Europe and to develop peace within Europe, it was important to grow business in Europe,” said Pejay Belland, the school’s director of marketing, admissions and financial aid.

Many of the aspects that made the institution successful in the past are still important factors in the growth of European M.B.A. programs today.

Just 15 years after the end of World War II, Insead accepted its first group of M.B.A. students, who were of 14 different nationalities. At the time, classes were offered in English, French and German, according to Ms. Belland.

Another important element of the program’s early success was the fact that it was privately funded and not beholden to the state rules. “It should be independent of any state; you can make your own choice in regards to curriculum,” Ms. Belland said.

According to German experts, private post-secondary institutions — a minority in a country where education has been traditionally state-funded — are behind the growth of the degree. With the exception with the Mannheim Business School, which is associated with a state-funded university, many players on the German M.B.A. market do not rely on public funding.

And while Germany has long been seen as Europe’s economic powerhouse, its M.B.A. programs have only recently taken a leading position in global rankings.

In their 2012 rankings for full-time M.B.A.’s, The Economist listed two German schools in its top 100 list, while there were none in 2005. Mannheim ranked No. 69 on The Financial Times’s Global M.B.A. ranking, a first for a German business school.

Germany’s programs have become more prominent as the country’s university system recently switched from an old diploma system to one with bachelor’s and master’s degrees, to fit in better with the rest of Europe.

“The marketplace that wasn’t visible because we were under the old system; it is now coming into focus,” said Jens Wüstemann, president of the Mannheim Business School.

Mr. Mahmood, the American student at the European School of Management and Technology, said he looked forward to cutting his teeth as an entrepreneur in one of the many new businesses starting in Berlin, even if he wanted to end up eventually in North America.

“There are so many start-ups here,” he said.