European Business Schools Set Sights on U.S.

Seeking U.S. students and a bigger global footprint, schools from Spain, France, and the U.K. are rushing to set up outposts on American soil

By Alison Damast

Over the past decade or so, European business schools have been aggressive about reaching out to the American market, doing everything from forming alliances with U.S. schools to launching student- and faculty-exchange programs. Now a handful of elite European schools are taking this a step further, trying to create a more substantial presence in the U.S. by opening up traditional brick-and-mortar campuses.

In the past few months, schools from France to the U.K. have announced plans to build campuses in the coming year in the U.S., including one planned outpost announced just last week. It's a strategic move by these institutions to increase their stature and influence in the American market, says Robert Bruner, dean of the University of Virginia's Darden School of Business (Darden Full-Time MBA Profile).

"The U.S. is where the MBA was invented and, to some extent to establish a footprint in this market, is an additional means of legitimizing a school's brand and stature globally," says Bruner, who also chairs the Globalization of Management Education Task Force of the Association to Advance Collegiate Schools of Business, one of the leading business school accreditation agencies.

Eye on the Hot Spots

That's a viewpoint that these European B-schools are taking as they cautiously attempt to entrench themselves in the U.S. A number of the schools that have announced plans to build campuses are well-regarded universities in Europe, but not as well-known by students outside their home countries. By starting degree programs in such hot spots as Miami and New York, they say they will be able to enhance their global reputation in both the academic and business community in the U.S. as well as expand and enhance the degree programs they offer students. Another underlying motivation is the opportunity for them to recruit more American students to their campuses. At most European business schools, Americans make up just a handful of the students in the degree programs, making it hard for them to build up a strong alumni base in the U.S., deans at these schools say.

Many European business schools will be watching closely to see whether these business schools will be successful at branding themselves in the U.S., says Dave Wilson, president and chief executive of the Graduate Management Admission Council, which administers the Graduate Management Admission Test (GMAT). Of U.S. GMAT test takers, the vast majority, or about 98 percent, send their test scores to U.S. schools, leaving just a handful of American students who consider non-U.S schools. The European schools will have to work hard to attract these students to their U.S. outposts, Wilson says.

"These are sort of pioneers who are breaking new ground, and it will be a challenge to get U.S. students," Wilson says. "I think most European schools are going to sit back and watch, because this is really a brand new bet for them."

Manhattan Opening

Just this May, Spain's IESE Business School (IESE Full-Time MBA Profile) opened the doors of its New York campus on West 57th Street, a six-story building with two classrooms, breakout rooms, and office space. The school had been planning its U.S. campus for three years and has spent close to $20 million refurbishing the building, says Eric Weber, an associate dean of IESE and director of the school's New York office. Says Weber: "We're pretty bullish about the U.S."

The school will not be offering an MBA program at the New York office, but it has ambitious plans for the site, which include promotion of its custom programs for executives, establishing a research center on global business, and setting up activities for alumni and corporate sponsors. Professors from the school's Barcelona campus will take students to New York for several weeks, where they will study business in the context of New York City, Weber says.