(Bloomberg Businessweek) -- Wharton School economics professor Ann Harrison is heading to California in January to become the new dean at the University of California at Berkeley’s Haas School of Business (No. 6 on Bloomberg Businessweek’s Best B-Schools global ranking). An expert in international trade and global labor markets, Harrison oversaw development policy at the World Bank before joining the Wharton faculty in 2012. She spoke with Bloomberg Businessweek about the current angst over B-school enrollments, how schools can better serve the needs of students, and her plans for Haas.
Is the recent drop in MBA enrollment the start of a longer-term decline of U.S. B-schools?
Let’s put it in perspective. If you go back to the financial crisis of 2007-08, at that point there was a pronounced reduction in interest in MBA programs, particularly the finance-heavy programs that were feeders to Wall Street. It took a little while, but things came back and we saw close to 10 years of phenomenally strong growth. In the last year, there’s been a bit of a slowdown, but these are not big declines. In most programs, we’re seeing a decline of maybe 4 or 5 percent. A lot of that stemmed from the Trump administration and its attitude towards foreign students and immigration.
I think the concern is for the lesser-known schools, but I’d say that demand for top-tier schools is really strong. Test scores and GPAs of applicants are higher, and the top 20 or 30 schools are admitting something like 1 in 10 students. I honestly don’t see demand dropping off in any major way.
International students account for a third or more of enrollment at many U.S. B-schools. Is the recent falloff in international applicants a concern?
We’re all waiting to see what happens. What the Trump administration’s policies on trade and immigration have done more than anything else is to create a huge amount of uncertainty. The process of obtaining visas and getting approval has really been slowed down. Also, a lot of students who would want to come here would also really want the option of being able to stay and work here, so there’s a lot of uncertainty around that as well. I’m sure I’m not the only business school dean who would really hope for a more open policy regarding international students. But, of course, I can’t predict the future.
What about the recent rise in popularity of MBA programs abroad? Is that a significant threat?
Clearly there’s more competition. There are a lot of international schools that are less expensive and with shorter programs. I would give it another 20 years before I would be worried about that. I just think that programs here are very powerful and can offer an experience and an alumni network that is really unrivaled anywhere else. And the private schools, at least, have very deep pockets.
Are U.S. B-schools doing enough to adapt and better serve the needs of students?
Nobody’s complacent. Schools are constantly adjusting their curriculum and the experiences they offer and shifting towards important areas like entrepreneurship and data analytics and artificial intelligence. Before, you had a set of core courses that were pretty much done in your first year. Now schools are offering choices within the core, so even at the very beginning of the program you can tailor your curriculum to your interests. A lot of students are interested in combining business courses with areas like health care or technology or engineering. So you’re seeing a lot more joint programs in the business school world, which means that we really need to come up with a more concise, less traditional MBA.
Your official start date at Haas is Jan. 1. What are some of the top items on your to-do list?
One thing I’ll be doing right away is meeting with faculty and staff—what they want will very much enter into our plans. While Haas is doing really well, we are the smallest of the top programs in numbers of students and faculty. So I would love to grow the faculty in data analytics and other key areas. I’d also love to be able to offer students more scholarships and financial aid. But in order to do those things, I can’t rely on public funding. California state revenues account for a very small fraction of our operating expenses, and that funding is going to go down further in the next three or four years. Basically that means we need to move towards more of a private university model, where philanthropy is super important, and try to increase corporate sponsorships and diversify revenue in other ways. That’s really the story of American universities right now. A big part of any dean’s job is going to be fundraising.
To contact the author of this story: Susan Hansen in New York at susan.hansen.mail@gmail.com
To contact the editor responsible for this story: Dimitra Kessenides at dkessenides1@bloomberg.net
©2018 Bloomberg L.P.
