Asian B-Schools Give U.S. Programs Run for Their Money

Posted by: Frederik Balfour on November 4, 2009

More and more Asians are looking closer to home when choosing B-school programs. Regional schools such as Indian School of Business and National University of Singapore are starting to give MBA programs at Harvard, Stanford and Wharton a run for their money. “A whole lot of schools are stepping up their game in terms of curriculum, students and faculty and new schools partnering with other business schools,” David Wilson, president and CEO of the Graduate Management Admission Council [GMAC] explained to me over lunch at the Four Seasons Caprice Restaurant in Hong Kong yesterday. http://prod-blogs.businessweek.com/mt/mt.cgi?__mode=view&_type=entry&id=23423&blog_id=29

But that’s not the only thing tipping the scales in favor of home-grown Asian B-schools. Most Asians who study in the U.S. do so with the intention of landing jobs there after graduation, but moves by U.S. lawmakers to restrict the hiring of foreigners on H1-B visas has narrowed their options. “We see strong protectionism that is most disappointing,” says Wilson, as I sneak a forkful of langoustine carpaccio. “There was a free flow of human capital for a long time,” he adds, noting that five of the seven U.S.-based Nobel Prize winners in sciences and medicine were actually born there.

Yet Asia is likely to account for most of the growth in prospective B-school candidates for the U.S. and Europe. That’s why GMAC, which administers the GMAT exams worldwide, is looking to open an office in the region. Indeed, in 2008, 29% of the GMAT test takers were Asian, a 70% growth since 2004. Wilson sees no reason why that number shouldn’t double in the next couple of decades. Meanwhile the number of U.S. test takers has barely budged over that time.

Over the course of lunch we discussed many of the findings from the Geographic Trend Report for GMAT Examinees published by GMAC. For example, test takers from Asia forwarded a lower percentage of their scores to U.S. schools [a strong proxy for applications] than they did in 2004. India saw a 470% increase in the number of score reports received, and Singapore 305%, while Chinese schools saw a 112% increase.

Here’s something else interesting from the report on the gender gap in test taking. [And no doubt one that fans of India vs China debate will want to weigh in on.]The number of women taking the test in from China outnumbered the men two to one. Now that either reflects their believe that China is a meritocracy, or it could mean that women feel they need to arm themselves with more degrees to compete with men in the workforce. [The world average is 39.5% of women among test takers of the GMAT in 2008 vs 60.5% by men.] The ratio was roughly the same for Vietnam and Thailand. For more on gender inequality in the region, have a look at this commentary by Bloomberg’s William Pesek.

India, however exhibits almost the complete opposite phenomenon to China. Last year only 25% of the test takers were women, while men accounted for 75%. Even Japan and Korea, countries well known for their glass ceilings had a higher percentage than India. [Only Pakistan ranked lower, with women representing just 20% of test takers. I’m at a loss to explain this gender breakdown and hope you readers will offer your theories.

Region-wide, the Indian School of Business Post Graduate Programme in Management received more score reports from test takers than MBA programs at Harvard, U. Penn and Columbia. More tellingly perhaps is the country breakdown. From Singapore, more test scores were sent to local schools than U.S. schools. However Chinese candidates clearly prefer the U.S. education option, with 77% of scores sent to schools there. A mere 2% of scores were sent to Chinese MBA programs.

When Wilson and I weren’t reminiscing about our alma maters [we both went to Queen’s University in Canada and did graduate degrees at the University of California at Berkeley] and how in our day all you needed to do was sharpen your Number 2 pencils and limit your alcohol consumption on the eve of taking the GMAT, we puzzled over some of the more arcane data in the report. For example, more Nepalese took the GMAT in 2008 than did Malaysians. Neither of us could come up with much of an theory on that. Or why did so many Vietnamese test takers send their score reports to the University of Houston? It ranked number one, while Harvard was number nine among their choice. It sure seems like the admissions folks down in Clear Lake are making a big push to recruit Vietnamese.

One answered question in the report is why so few U.S. B-school hopefuls send their scores to our side of the pond over here in Asia.

Reader Comments

Prantik

November 4, 2009 7:54 AM

Interesting report!...most interesting being the fact that more Nepalese took the GMAT test than Malaysians in 2008...counterintuitive...btw paras 5 & 6 are repeated!

Jen

November 4, 2009 9:15 AM

You repeated yourself in this article... perhaps copy/pasting error?

The_Observer

November 4, 2009 9:39 AM

The link below is for an article from an Indian website reporting on The Economist’s top 100 rankings of global full-time MBA programmes :

http://www.mbauniverse.com/aspirantinn.php?id=2472

For the ASIAN REGION, the top 10 MBA colleges are dominated by Unis. from Australia and Hong Kong.

Ven.man

November 4, 2009 9:45 AM

This is going to be a growing trend.The main factor is lose of confidence in american b'school quality & models due to the financial crisis and the other factor is the H1-b as the TARP bailed out banks& wall streets firms cant hire H1-b foreign graduates due to the restriction by congress.

Shame on universities they didn't support h1-b reform Technology companies wanted. It's not too late universities should take up this issue seriously or they may face a complete lack of foreign students in their enrolling classes. With out foreign students and their perspectives in a MBA class imagine the quality of the graduates.
Also time will only tell even if GMAT is of any relevance to foreign B'schools.

eductaion.

Frederik Balfour

November 4, 2009 10:03 AM

Thanks to many of you who pointed out the duplication of two paragraphs. [Nice to know that you read the blog through to the bitter end!]The mistake has been corrected.

johnjasonchun.com

November 4, 2009 10:10 AM

Hey! How's this for an MBA PhD in IRRs!
198 properties sold this decade!
23.67 months average hold.
1165% average Gross profit.
49.2% average Gross profit per month.
4687 months of Gross real estate profit
25,000 acres land goal by 2015

The_Observer

November 4, 2009 10:42 AM

@Ven.man
As a former H1-B visa holder I can't see your connection to USA universities. An H1-B visa is employer sponsored temporary immigration for a job. For 2009 the H1-B allocation hasn't been fully taken up yet as in previous years owing to the current recession here in the USA.

@johnjasonchun.com
Naughty John using this blog to promote yourself. You're obviously one agressive self-publicist. Seriously though 'April 01' as one of your headings? One might assume you jest.

JD

November 4, 2009 11:01 AM

I don't understand why the author seems to be so puzzled that Vietnamese students would apply to the University of Houston. Not only are the graduate programs very-well ranked nationally (and soon to rise) but its a great multicultural, cosmopolitan city. In fact, the biggest drawback is likely of little consequence to them; the heat...

Gaurav

November 4, 2009 12:35 PM

Its interesting to see that more nepalese taking the GMAT than Malaysians. It is because more Nepalese are starting to believe in human capital and meritocracy. check out my blog @ supportinternationalstudents.blogspot.com.

SensibleMan

November 4, 2009 12:47 PM

Very simple reason for why you see a shift in region of the people pursuing higher education.. Rise and fall of civilization. We can beat around the bush and discuss the heck out of this for eons. But, anyone who thinks rationally will come to this conclusion swiftly. Chinese invented and passed to India and west, Indians invented and passed to west, mre recently Arabs and muslims invented and passed it on to th west. Now the western invention is being passed around and awaiting further refinement. This is inevitable. Now, is the west going to accept this or is it going to fight and lose the battle - that is what we need to wait and see. BTW, for the Asians to take over the nmantle, it will take another 20-30 years. So, it is our next generation that we need to prepare for, to live under the hegemony of some Asian culture/nation/philosophy.

XiFu

November 4, 2009 1:47 PM

Why did the University of Houston receive more score reports from vietnamese students than Harvard? The weather of course! It's just like home... hot and muggy.

George

November 4, 2009 4:23 PM

"but moves by U.S. lawmakers to restrict the hiring of foreigners on H1-B visas has narrowed their options."

The result would be jobs from the US moving abroad, resulting in loss of tax revenues, bigger deficits and huge debt. This is one of the reasons why hiring has picked up in Asia but not in the US.

George

November 4, 2009 4:23 PM

"but moves by U.S. lawmakers to restrict the hiring of foreigners on H1-B visas has narrowed their options."

The result would be jobs from the US moving abroad, resulting in loss of tax revenues, bigger deficits and huge debt. This is one of the reasons why hiring has picked up in Asia but not in the US.

Jaimin Shah

November 4, 2009 10:46 PM

ISB by virtue of being in India will have more applications. ISB is the only reputed Indian school to offer one year program for students with substantial work expereince. NUS is also being considered as another option for Indian students. As a result both schools are getting high number of applications.

Isha Gupta

November 5, 2009 4:18 AM

In addition to ISB,India has numerous Business schools which offer many choices and good quality education to prospective MBA candidates.Such business schools do not require GMAT score and still remain number one preference for women who want to do MBA straight after completing their under graduate studies,that too at an affordable price.Where as GMAT does have some pre-requisites in terms of pre-MBA work experience required of applicants.This along with the cultural issues such as early marriage for women etc ,to an extent can explain why India has only 25% of the test takers as women.

jbloan

November 5, 2009 8:28 AM

this human capital bubble will burst. The schools get rich churning out graduate after graduate, but if all the jobs are taken.. pop

will be interesting to watch, especially india who i dont think could recover if there aren't any jobs to steal

Newbie

November 5, 2009 9:49 AM

This article states the absolute truth. It makes even more sense as it talks about b-schools. Usually the rise of a country's b-school has high correlation to the rise of that country's economy. It is a given that India and China are poised to become the world's two largest economy, hence their b-schools will have a distinct advantage. In order to be able to do business in these two countries, one has to be on ground. An MBA student cannot sit in Harvard or INSEAD or NUS and learn doing business in India or China. Does this mean that Harvard and INSEAD are business schools of the past (staring at obsolescence). They seem to be relegated as 20th Century stars who are struggling in the 21st Century.

Newbie

November 5, 2009 9:49 AM

This article states the absolute truth. It makes even more sense as it talks about b-schools. Usually the rise of a country's b-school has high correlation to the rise of that country's economy. It is a given that India and China are poised to become the world's two largest economy, hence their b-schools will have a distinct advantage. In order to be able to do business in these two countries, one has to be on ground. An MBA student cannot sit in Harvard or INSEAD or NUS and learn doing business in India or China. Does this mean that Harvard and INSEAD are business schools of the past (staring at obsolescence). They seem to be relegated as 20th Century stars who are struggling in the 21st Century.

T

November 5, 2009 10:29 AM

The University of Houston Clear Lake is well-known among Vietnamese students partly because they have a cooperation program with the Vietnam National University (http://www.cie.edu.vn/english/thac-sy-hoa-ky/thac-sy-hoa-ky.html?Itemid=135). This program has been in place for quite a while now actually. Another reason to the huge influx of Vietnamese students to this school is most likely the large Vietnamese community in Houston and in Texas as a whole.

Frederik Balfour

November 6, 2009 10:44 PM

For more on gender inequality in the region, have a look at this commentary by Bloomberg's William Pesek

http://www.bloomberg.com/apps/news?pid=20601039&sid=atv.XrNA4utA

Indian American Woman

November 9, 2009 11:00 AM

Why should Indian woman pursue advanced education? An Indian American friend had an Indian American boyfriend since high school in the U.S., after she graduated from a prestigious private university in the U.S.,, she had to break up with her long time Indian American boyfriend because they belong to different castes, and send back to India by her paretns to meet her future husband to has never set foot outside India. They got married and her new Indian husband got sponsored by this girl to immigrate to the U.S. within one year. The Indian American woman is very unhappy about this Indian man who is very bossy to her even though he owed all his good fortunes to her. But apparentely there is nothing this girl can do without severing her ties with family.

Adelphi MBA

November 29, 2009 3:27 PM

The best MBA schools share alot of information with you http://www.adelphi.edu/amMBA

maverick thinker

January 6, 2010 3:32 AM

Reason for gender bias in Indian applicant pool
-----------------------------------
Majority of Women in India still prioritize a good personal life over professional life, (majority of them)
This applies to Indian society as such.

The girls get married by 24-25, hence by the time the girls have 4-5 years average experience, they would be having factors like guy's work location as a factor to consider.Mostly it may end up being in India.another factor which discourages Huge scale investment in MBA through GMAT.

Considering you are earning in INRs, it is impossible for one to shell out money from one's hand, so dependence on financial support from parents, relatives and friends.
A girls' revenue is always considered as a bonus rather than a base in financial planning for family(this is gradually changing now though), so huge scale investment on the MBA education is not considered an option unless by very affluent segments of society.

maverick thinker

January 6, 2010 3:37 AM

another factor
----------------
From personal front, a woman who earns more, needs to find a guy who earns more to facilitate a smooth marriage.So again encouragement for the cream job is not generally encouraged in Indian society

Though the author feels this as an anamoly, any individual from India would even predict this upto percentages mentioned.

Thoughts from a Guy from India.
My insights on the bias of Indian gender applicant.

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