Europeans Opting for MBAs Closer to Home

B-school-bound Europeans are increasingly applying to MBA programs on the Continent, which are shorter and cheaper than their U.S. counterparts

The Barcelona campus of IESE, where applications from Western Europe have increased by 50 percent over the last five years.

By Alison Damast

Scottish business school student Steven Renwick used to harbor what he called a "vague aspiration" to get his MBA from an American institution such as the Stanford Graduate School of Business. Then he took a closer look at the price tag. The cost of a two-year degree at a top U.S. business school would easily set him back more than $150,000, an investment of time and money he was not comfortable making. Says Renwick: "It seemed like a massive opportunity cost."

Instead, he considered schools in Europe with one-year MBA programs, such as Switzerland's IMD (IMD Full-Time MBA Profile), France's INSEAD (INSEAD Full-Time MBA Profile) and the University of Oxford's Saïd Business School (Saïd Full-Time MBA Profile). He ultimately applied to and was accepted by Saïd, a school known for its strong entrepreneurship offerings, with a more affordable tuition of about $57,000. "I was always very aware of U.S. business schools because they were so highly ranked, but they just seemed astronomically expensive to me," says Renwick, who is now at Saïd working on launching an Internet startup. "I didn't see the advantage of getting myself into that much debt before even going into business."

Renwick is part of a new generation of European MBA students who are increasingly looking to attend business schools on their home continent, rather than going abroad to the U.S. for their business school education. In the past five years, the number of Europeans who are sending their Graduate Management Admission Test (GMAT) scores to U.S. schools has declined sharply, according to a report released this month by the Graduate Management Admission Council on European application trends. In testing year 2006, 50 percent of Europeans test takers sent their GMAT score reports to business programs in the U.S., a number that slipped to 37 percent in 2010. Neighboring Canada also has not fared well. In 2006, Canada was among the top 10 countries to which European citizens sent their GMAT scores, but in 2010, Canada slipped from that list, according to GMAC. Instead, such countries as the U.K., France, and Spain have become leading destinations for European applicants.

Europe on the Rise

The shift in the admissions pipelines has far-reaching implications for both American and European business schools and could result in permanent changes in the business school admissions landscape, says Nunzio Quacquarelli, managing director of QS Symonds, a London company that organizes the annual QS World MBA Tour.

"Europe's MBA market is on an upwards trajectory," Quacquarelli says. "The number of people looking at an MBA in Europe is growing, and at the same time I think European candidates are increasingly recognizing that there are world-class business schools in Europe."

In the past decade, European B-schools have grown in stature and reputation, becoming more popular due to their more affordable price tag and the shorter duration of their programs, typically one year vs. their two-year U.S. counterparts. At the same time, the MBA degree is becoming increasingly popular among students and more widely recognized as a valuable qualification by European employers, says Lisa Bevill, director of admissions at IE Business School (IE Full-Time MBA Profile) in Madrid.