The Potential Impact of Brexit on U.K. Business Schools
British Prime Minister Theresa May plans to invoke Article 50 of the European Union Lisbon Treaty on March 29th—triggering the United Kingdom’s two-year process of exiting the bloc of nations it has been part of for four decades. Given this, it seems a good time to look at the impact of Brexit on U.K. schools. According to a 2017 GMAC Brexit-U.S. Survey, 45 percent of respondents claimed that Brexit would make them less likely to study in the United Kingdom. But what does that figure mean? Are U.K. schools expecting fewer applications from top international talent, or is everything well?
The Consequences of Brexit
Currently, Brexit is still clouded in uncertainty. According to Rafael Ramirez, the director of the Oxford Scenarios Programme and senior fellow in strategy at the Saïd Business School, “It is not only unclear how long the uncertainty will last, it is also not clear what its scale will be and how far the unintended consequences of Brexit could stretch—far beyond the U.K. and Europe. The IMF Chief Economist has called it a ‘spanner in the works’ that has claimed 1 percent of global growth already.”
There is one thing, however, that U.K. business schools can be certain about: Business doesn’t operate in a vacuum, and neither do business schools. “Ninety-five percent of our MBA students are here because the U.K. government has allowed them to be here,” Saïd Dean Peter Tufano told Bloomberg. “It would be a real shame if it moved in the opposite direction and made it more difficult for students to study in different countries.”
Unfortunately, that’s a valid worry, which is why administrators at Saïd compiled a “risk list” of possible fallouts in advance of the Brexit vote. “There are some implications of Brexit that would be, I think, disastrous for the U.K. and higher education more generally. Others are more benign,” said Tufano.
The concerns are wide ranging. With the outcome of the Brexit vote, the pound has grown weaker, which makes the program less financially attractive to faculty while at the same time making it more attractive to potential applicants. In addition, there’s also a concern that Brexit will result in a loss of E.U. research funds and regional development funding, which has become increasingly important in recent years as the U.K. has decreased its own funding.
MBA programs in the U.K. have their benefits: The programs tend to be more affordable and take less time to complete than those in the U.S. But that appeal could lose some of its luster if high-paying finance jobs in London take a hit. In fact, a another recent Bloomberg article explained that “Britain crashing out of the European single market could cost banks and associated businesses in the U.K. almost £40 billion ($51 billion) in lost revenue, undermining a key sector of the economy.”
That’s not to say that Brexit is all bad news for MBA programs in the U.K. We spoke with David Simpson, the MBA admissions director at the London Business School, to gain a different perspective. Here’s what he had to say.
Has LBS noticed a difference in MBA applications since Brexit?
So far this year we haven’t seen any negative reaction. In fact, we have seen increased application volumes for the MBA in every admissions round so far, and MBA applications are up by 15 percent overall.
What is LBS doing to combat any negative effects from Brexit to still attract top international talent?
We run incredibly global programs, recruiting students from over 70 countries who want to work all over the world post-graduation. So, to some extent, we are partly insulated against any local economic changes. The evolving nature of our MBA and other programs, and the continued success of LBS graduates in global job markets across all sectors (more than 94 percent of MBAs [employed] within three months of graduation), helps us to attract more and more top talent from around the world.
In spite of Brexit, what makes the U.K. and LBS still an attractive place to study?
London is an exciting, vibrant, global city, with opportunities and strengths across every sector. At London Business School we are well connected in London and have a strong presence all over the world. London’s ongoing success in tech, start-ups and across all major sectors gives our students a huge advantage.
How will/has Brexit actually helped students/workers in the U.K.?
Our programs have always been an excellent value for the money, with strong employment rates, high salaries and great learning opportunities such as internships. Recent changes in the exchange rate have added greater value for our international candidates (over 90 percent of our students are non-U.K. nationals).
How will/has Brexit negatively affected students/workers in the U.K.?
As an institution at the heart of global business, we have experienced many economic and political changes over our 50-plus-year history, whilst continuing to grow and achieve great success. There has been little effect on LBS students or graduates working in the U.K. up to this point. In fact, several large employers, for example Google and Amazon, have announced plans to expand here. The school is watching closely how the situation evolves over time and is continuing to provide top talent to recruiters across all sectors.