The Asian Renaissance

The Asian Renaissance

If there was any doubt left that the economic balance of power has tipped eastwards, it was laid to rest when European governments turned to countries such as China to bail them out of the eurozone crisis. The harsh reality for the West is that the most exciting business opportunities of the next decade may emerge on the other side of the world. And for anyone trying to decide where to study for an MBA, it’s a trend that cannot be ignored.

Business education in Asia is booming. India, the regional leader at least in terms of numbers of schools and students, has more than 1,500 business schools, while China, a relative latecomer, has at least 180 state-approved MBA programmes. And schools in the region are not only slowing the traditional migration of students to institutions in the US and Europe, they are also attracting an increasing number of applicants from the West. The Indian School of Business (ISB) in Hyderabad, for example, has seen non-domestic applications rocket by more than 60% in three years. The Chinese University of Hong Kong (CUHK) saw a 30% jump in candidates from outside Asia in 2011 alone.

It seems that a growing number of potential MBAs are deciding that the only way to really understand what is going on in the Asian business arena is to study there. But can Asian business schools capture the very best international students in the face of fierce competition from the old guard in Europe and the US?

One specific challenge that Asian schools face is a shortage of business academics across the region. While some of the leading players have similar pull to their Western counterparts, others suffer from a lack of top-flight local teaching talent. China is particularly hampered by the fact that many of those working in business education have come from disciplines such as engineering or the sciences and have little real experience of the commercial world. The fact that many schools forbid academics to take on consulting work only compounds the problem.

Several high-profile institutions in the region have addressed the scarcity of teaching staff by partnering, rather than competing, with Western counterparts. Peking University, for example, works with Belgium’s Vlerick Leuven Gent to deliver the Beijing International MBA programme or BiMBA; the University of Tsinghua hosts an executive MBA programme that draws on faculty from HEC Paris; and CUHK has joined with schools in the Americas and Europe to develop the multi-country OneMBA. But those that reject the partnership path may find they need a radical change of approach if they are to win the ‘war for talent’. “Some schools in Asia are just not as flexible as their counterparts in the US or Europe,” says CUHK’s administrative director, Lawrence Chan Hang-kin. “And they may have to adjust their management and personnel structures to hire the right faculty.”

Asian schools do have a discernable advantage in their direct connection to the local business environment. “Many of our faculty members work closely with government and industry across the region,” says ISB’s Sriram Gopalakrishnan, “which allows them to bring to the classroom a clear understanding of the key challenges faced by businesses here.”

And while Western business schools talk a lot about the importance of the ‘new’ economies, few have followed this up with such a serious attempt to analyse and connect with them. In fact many still seem focused not just on their own established, if now wobbling, economies but perhaps most keenly on the home of business education. According to Pankaj Ghemawat, a professor at Spain’s IESE business school and author of World 3.0, two-thirds of the case studies published in the top 20 management journals during 2010 dealt with issues specifically related to the US.

Despite their relatively late entrance to the market and the various challenges they face, Asian schools may end up usurping the lead of their Western competitors for one simple reason. They are teaching in the corner of the world where growth and development is happening right now, not where it happened in the past.

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