Last week, the Graduate Management Admission Council (GMAC) unveiled Early Warning Signals: Winners and Losers in the Global Race for Talent. This comprehensive report examines the role immigration plays in fueling the productivity and growth of global economies. It also looks at the need to support international mobility of talent across borders. Additionally, it studies the critical role business schools play as gatekeepers to skilled immigration and talent development.
The report analyzes data in the United States, Canada, the United Kingdom, India and China. It also includes the latest business school application data released by GMAC via the Application Trends Survey Report 2019.
“Business schools are uniquely positioned to explain how mobility of talent connects to economic growth and vitality through our faculty research and expertise. However, as the developers of talent, we also have almost real-time data showing new trends in where talent is choosing to locate,” says Bill Boulding, Chair of the GMAC Board and Dean of Duke University’s Fuqua School of Business.
“We feel it is critical we share this information now with policy makers around the world as talent will be the most important factor in determining who wins and loses economically in the future. The issues we are raising are important not just in providing the opportunity to cross borders for education but also to foster robust and vibrant national economic activity.”
Deans sound the alarm over immigration restrictions
An open letter recently signed by 50 deans and 13 CEOS calls for substantial change in the U.S. approach to high-skilled immigration. The letter expresses urgent concern that the U.S. does not have the high-skilled talent it needs. Nor does it have the capacity to train enough people with these skills to remain competitive in a global economy.
To prevent this trend from continuing, the signatories have proposed the following pro-growth policy reforms.
- Remove “per-country” visa caps.
- Modernize the visa processing system.
- Reform the H-1B visa program so needed talent has a reasonable chance of gaining entry to the United States.
- Create a “heartland visa” to encourage immigration into regions that could most use the vitality of these talented individuals.
“Quality business schools are emerging around the world and the competition for talent is fierce, the sign of a vibrant marketplace,” says Sangeet Chowfla, President and CEO of GMAC.
“Business schools don’t hold all the cards, however. Policy makers also have a responsibility to seed an environment conducive to student mobility. By doing so, they unlock innovation while helping to maintain diversity in the classroom, a critical aspect of graduate management education.”
Early Warning Signals: Winners and Losers in the Global Race for Talent provides a look into the current flow of talent into specific countries. It cites data from GMAC’s 2019 Application Trends Report, an annual snapshot of admissions trends for graduate business programs.
Regions in which students desire to study are likely to be the winners in economic development. Attracting talent has implications for homegrown talent as well, by creating hubs of innovation and economic growth.
View of the United States
In 2019, the United States experienced a 13.7 percent decline in international business school applications. This was a steeper decline than any other country in the world. Notably, this drop came amidst largely rising or stable applications everywhere else in the world.
Conversely, both Canadian and European programs saw application increases, which were driven primarily by rising international demand. For the US, these numbers are a worrisome indicator for the future mobility of talent. Specifically, this hits business leaders, who cite the hiring and retention of talent as their number one business concern.
Find MBA recently covered this precipitous drop, noting that plunging apps in the US is good news for Europe.
View of Canada
Canada saw an 8.6 percent uptick in international business school applications in 2019. This follows on the heels of a 16.4 percent increase in the prior year. We take this as a positive signal for the country’s future mobility trends.
Canada also gained 286,000 permanent residents in 2017. In fact, the country aims to have a total of 1 million new residents by 2021. Because the focus is on high-skilled labor, Canada should enjoy economic benefits in the years and decades to come.
View of the UK
Three in five UK firms experienced a more difficult time finding talent over the previous year. Additionally, 50 percent expected the UK’s skills shortage to worsen further in the future. However, 61 percent of UK business programs reported an increase in international applications in 2019 over the prior year. Furthermore, the share of GMAT score reports sent to UK programs has increased slightly since 2016. This data is according to a report released by GMAC in March of 2019.
View of India
A view of business school application data shows that the movement of talent from India to other parts of the world continues. At the same time, there is increasing interest in domestic schools. The percentage of Indians sending their GMAT scores to US schools fell from 57 percent in testing year 2014 to 45 percent in testing year 2018, according to the most recent GMAC data. During that same period, the percentage of Indian GMAT test takers sending their test scores to Indian schools rose from 15 to 19 percent.
View of China
According to GMAC’s Application Trends Survey Report 2019, Chinese business schools saw a 6.8 percent increase in domestic applications this year. Domestic volumes were also up year-on-year at 73 percent of programs. While 86 percent of applicants to these programs currently come from within the region, the rising profile of China’s business schools could begin to attract a more global pool of candidates.
China is now home to six of the Financial Times’ Global Top 50 MBA programs. This includes the fifth-ranked overall school, China-Europe International Business School (CEIBS). In 2009, just two of the top 100 were in China.