Market Forces and Value Drivers Facing Business Education

Report Icon Briefing
Wednesday, November 30, 2022
By AACSB Thought Leadership
Business education leaders explore the market shifts and evolving stakeholder expectations shaping a new business education landscape.
  • Business schools continue to provide value to their learner and business stakeholders, particularly around their convening power, research and teaching, and development of quality talent.
  • Lifelong learners, businesses, and talent development leaders demand flexibility across business school educational experiences, emphasizing the importance of both quality and relevant competency development.
  • Greater innovation across the business school will be key to creating new value that meets changing stakeholder needs.

 
In September 2022, AACSB’s Innovation Committee kicked off its first meeting for the 2022–23 year. The committee explored market drivers affecting the business education landscape and opportunities for business schools to leverage innovation in meeting stakeholder demands. This discussion helped launch AACSB’s broader thought leadership work around the value proposition for business education. At the 2023 International Conference and Annual Meeting, to be held April 23–25 in Chicago, Illinois, AACSB will release a full report outlining pathways business schools can pursue as they drive value in a changing business and educational environment.

Current Value Drivers and Market Forces

The following is a high-level scan of market shifts and stakeholder expectations that are changing the business education landscape, as explored by the Innovation Committee. Some overarching themes that surfaced include a focus on efficiency, impact, wider audience reach, and breaking free from rigid structures that stifle innovation. Business schools are called to better align their offerings, activities, and strategic objectives with the needs and expectations of their various stakeholder audiences, particularly learners and businesses.

Learners

Where Do Business Schools Provide Value?
  • Network Building: A business school experience offers inroads to future colleagues, businesses, employers, and prospective clients.
  • Whole-Person Development: A higher education experience grants learners a safe environment in which to experiment and learn from failures, develops higher-order thinking, and instills a “learning to learn” mindset that positively impacts long-term personal and professional development.
  • Signaling Power: A degree from a business school continues to be a favorable signal of candidate quality and competency in the job market.
What Market Drivers Are Impacting Business Schools?

Students and lifelong learners are looking for flexibility in their education; the ability to acquire specific, in-demand skills and credentials for career advancement and growth; and high-quality, immersive learning experiences delivered in person and online.

Recent Findings:

  • Flexibility in Tandem With Quality: Accenture outlines six segments of learner types, with the greatest proportion of learners, Junior Specialists (31 percent), seeking the ability to move through coursework faster while also acquiring specific job-relevant skills. All types of learners expressed interest in flexibility and a quality digital experience, while still valuing intentional in-person experiences “for deeply relevant social experiences.”
  • Pandemic Impacts: GMAC data shows that COVID-19 has changed candidate preferences for graduate management education in several significant ways: (1) more candidates are seeking flexible programs, although the majority still prefer the full-time MBA; (2) fewer candidates are internationally mobile; and (3) candidates are showing greater interest in the technology sector, but career switchers are more open to a wider variety of career sectors altogether.
  • New Skill Set Demands: Coursera’s Global Skills Index suggests that industries with highly skilled talent, such as the technology sector, experience higher returns and less disruption. Business education has opportunities to deepen expertise in software, computer, and statistical programming skills to remain competitive in the job market. While the median half-life of business domain skills is nearly 15 years, the period is much shorter for data science and technological skills, suggesting that universities can complement core content with flexible digital content designed to quickly and continuously develop in-demand skills.

Business

Where Do Business Schools Provide Value?
  • Access to Talent: Businesses are exposed to workforce-ready candidates from the vast talent pool prepared by business schools through a variety of educational experiences, including degree, non-degree, and experiential learning programs, led by quality faculty.
  • Consulting and Solutioning: Business schools offer consultative solutions for companies through live cases, executive education, and customized learning programs.
  • Informing Business Practice: Faculty research and expertise creates new knowledge that can inform organizational R&D and help solve industry challenges.
What Market Drivers Are Impacting Business Schools?

Organizations are prioritizing talent development and demanding flexible and accessible lifelong learning experiences that align with a nonlinear world. A combination of human and societal skills, along with rapidly changing technical skills, are needed for companies to remain competitive and meet stakeholder needs.

Recent Findings:

  • Agile Talent Development: Results from a SWOT study on the supply and demand of executive education, conducted by AACSB, IEDP, and UNICON, shows that corporate leaders desire learning options that are flexible, low cost, accessible, regularly updated, and immediately applicable. Talent functions are widening focus beyond senior and high-potential employees. Talent leaders are more active in learning development and are quick to adopt new technology and internal solutions curated to their own learning agendas. Business schools are perceived as astute and trustworthy, but also burdensome and expensive.
  • Focus on Skills: AACSB’s business influencer market research suggests that companies are eager to understand business school learning objectives and tracking of skill set trends. Over the coming years, businesses anticipate increased receptiveness to skills-based hiring, including an emphasis on non-technical skills such as the following:
    • Add-on skills: bonus or “tack on” skills that differentiate candidates, especially when paired with a degree.
    • “Purple” skills: resilience, curiosity, and empathy, in addition to technical (“red”) and business (“blue”) skills.
    • Communication skills: solid communication skills in both offline and online environments in an increasingly virtual world.
  • Customization to Organizational Needs: A CarringtonCrisp report on “The Future of Lifelong and Executive Education” reveals several important trends among employers. A significant majority of companies surveyed plan to develop a formal lifelong learning strategy focused on reskilling and upskilling in response to changing business needs, anticipate that online learning will become the standard approach for employee development, and agree on the value of short bursts of flexible learning that result in microcredentials.
  • Relevant, Actionable Research and Insights: Insights into the relevance of business school research shared in an earlier Harvard Business Review article hold true today, as calls continue for business schools to produce more pertinent, practical scholarship. The authors share several obstacles to achieving this outcome, including a lack of collaboration and dialogue across researchers and practitioners, which AACSB’s Research That Matters report emphasizes as a major step that schools must include in their action plans for creating impactful research.

 

Greater Value Through Innovation

The term innovation is often used interchangeably and freely as a solution to any organizational challenge. Authors of the influential article, “The Twelve Different Ways for Companies to Innovate,” note that there are many “flavors” of innovation, but ultimately, “Innovation is about new value, not new things.” From this lens, AACSB’s Innovation Committee examined areas of business education that are ripe for innovation. Some opportunities for schools include creating value for a wider audience of learners, enhancing offerings to business partners, and improving learning experiences that align with new demands and needs. For example, former president of BYU Pathway Worldwide, Clark Gilbert, believes schools can reframe the threat that often comes in a changing market as opportunity and focus on reimagining the learning experience, specifically by master-based learning models, real-world projects, flexible teaching approaches, technology efficiencies, research extension, and a deeper understanding of learners. Additionally, at the September Innovation Committee meeting, guest presenter Dreen Yang of The Coca-Cola Company shared key takeaways for business school leaders to consider in their innovation pursuits, including defining their purpose, creating a supportive culture, and embracing diversity.

Business Schools and Their Role in Society

Beyond the value that business schools offer their key stakeholders—learners and businesses—the role schools serve across society, broadly, is increasingly important. AACSB has long advocated for the positive of business schools, more so elevated with the launch of the 2020 accreditation standards and the pervasive theme of societal impact weaved throughout.

As the Innovation Committee and AACSB continue to examine the value proposition of today’s business schools, the positive impact that business education creates across local and global communities whether through research, leadership development, learning experiences, as well as outreach will be a critical priority for schools to uphold.

Authors
AACSB Thought Leadership
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