With a full-blown downturn in the economy threatened, what are the prospects for business schools?

Dr Mary Meldrum, head of postgraduate programmes at Manchester Metropolitan University Business School, forecasts that in times of recession people reassess their career paths and return to full-time study. She says: “Those on Executive MBAs (EMBA) consider converting to full-time masters, and those made redundant do an MBA to become more competitive.”

So, are business schools rubbing their hands at the prospect of an influx of applications? Some disagree that a recession makes much difference.

Rebecca Joffrey, associate director of career development at Tuck School of Business in America, reports no direct impact from the broader market fallout. “But we’re cautious,” she says.

Statistics from the Association of MBAs (AMBA) show a steady upward trend in enrolments from 1990, while Nunzio Quacquarelli, managing director of QS, claims that there is a time lag of 18 months before the impact of the recession becomes apparent: “If the recession is deep, candidates may postpone doing an MBA till the job market improves.”

It would be foolhardy to do an MBA on the basis that it will ensure a job at graduation, argues Professor Valter Lazzari, director of MBAs at Bocconi University. He recalls the recession of 2000: “In Italy it went on so long that those who took an MBA as an insurance policy found that the economy was still weak when they qualified.” He is impatient at the attitude that an MBA is a good way to fill in time until prospects improve: “If you look on it as a short-term investment you’re underestimating its value.” Oliver Westall, director of the MBA at Lancaster University Management School, welcomes applicants who want a clearly defined career change. He says: “There are people who take an MBA when they’re made redundant, but I don’t look forward to candidates who choose an MBA because they have nothing particular to do.”

American employers still have a presence on the business school campus, says Professor Stacey Kole, deputy dean for the MBA programme, University of Chicago Graduate School of Business: “But it’s a charade. We’ve heard that recruiting in New York next year will be ‘limited’, so schools will have to broaden their contacts.” But UK employers, according to Jeanette Purcell, chief executive of AMBA, are taking a long-term view of retaining key employees, having burnt their fingers at the last recession by laying off their best staff.

Each recession affects different sectors, which makes it difficult to predict the areas that will be worst hit. Financial services in the City are already in the firing line, although Meldrum reports that Manchester in not affected. She says: “Finance is booming and the Bank of New York has increased its investment in Manchester. Students are focusing on areas like financial accounting, while we’ve seen increasing opportunities in project and supply chain management and logistics.”

Would business schools be prudent to focus on the areas that will provide the best opportunities for their students? The idea is anathema to Kole. She says: “Our approach to education is to prepare students for all sectors. The idea that you would restructure your whole curriculum to chase trends in the market is the antithesis of what Chicago would do.”

Professor Arnoud De Meyer, director of Judge Business School, argues that building relationships with corporates in emerging economies ensures that there are still attractive career options even in a recession. But he sees a golden opportunity in an economic downturn.

He says: “In the good times MBA students postpone their entrepreneurial ambitions for a well-paid job, but this is a fertile market for new businesses. A recession is a great opportunity for entrepreneurs.”

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