The current state of the U.S. MBA market can best be compared to your average glacier: large, slowly decreasing in size, and leaving a mark when it recedes. Still, MBA programs make up the greatest number of any single type of master’s degree program and enroll the largest number of master’s students, by a long shot.

Like many of our clients, your institution may be wondering if investing in a new or existing MBA program—or perhaps moving one online—may be the key to growing or maintaining enrollment. Is this still a good strategy?

Sizing Up the MBA Market

Let’s start with the size and direction of the MBA market. Based on Eduventures’ analysis of IPEDS data, there are 56% more institutions offering MBAs (over 1,000) than there are institutions offering master’s programs in the next largest academic focus area, educational administration. Slightly more than half of all four-year institutions that offer master’s degrees or higher have MBA programs. There are 134% more MBA conferrals than there are conferrals in master’s in nursing administration and registered nursing programs, which are the next largest in terms of the number of conferrals.

MBA conferrals, however, have seen a moderate decline since reaching a 2012 peak of nearly 117,000 conferrals, most recently reporting 105,400 in 2017. A review of MBA admissions data from the Graduate Management Admissions Council paints a similar picture. The majority of U.S. MBA programs of every delivery mode and program length, except for Executive MBAs, reported declines in application volumes in 2018.

So, what’s happening with the MBA market? What are these students doing instead?

General or Specialized?

As Figure 1 indicates, many of them may be enrolling in more specialized business programs. These programs take many shapes and sizes. Most have a narrower curricular focus—such as entrepreneurship or non-profit management—and can often be completed in less than a year if taken full time. Like MBA programs, they often target recent graduates or working executives.

Over the last five years, specialized business master’s programs have seen a rise in both the number of programs and the number of students. Notably, we are defining “specialized business programs” here as master’s in business programs that are not reporting to IPEDS as general business administration programs.

 

Completions for MBAs, Specialized Masters, and Accounting Programs from 2013 to 2017
Figure 1.

 

For many institutions, the strategy to break away from the MBA pack is increasingly common and successful. Specialized business masters programs like those in accounting, data analytics, and organizational leadership have all seen significant growth in recent years. All of these specialized programs, however, draw from a smaller pool of students and lack the mass appeal that the MBA still commands.

In addition to more specialized programs, it is worth noting that the admissions data also highlights the growing impact of international business programs. These programs now report increased application volumes compared to U.S. institutions.

Distance or Non-Distance?

Another major trend: the MBA is increasingly awarded through wholly or partially online programs. The number of distance programs jumped by 25% between 2013 and 2017. Figure 2 shows this growth alongside the decline in on-campus programs.

 

Completions for MBAs, Specialized Masters, andAccounting Programs- Distance vs. Non-DistanceFigure 2.

 

This reflects the general trend to move online among master’s degree programs in most academic areas. For the MBA, growth in distance programs has balanced out the greater decline in non-distance programs. Specialized programs, especially accounting, which is the largest business program next to the MBA, have grown among all modalities but gains in distance programs have outpaced those in non-distance.

Our 2019 Adult Prospect Survey™ also indicates an increase in interest in master’s of business programs that are entirely online among prospective students. This interest has outpaced the average growth in wholly online among all prospective adult learners in our survey (Figure 3).

 

2019 Adult Prospect Survey ResponsesFigure 3. 

 

Additionally, Figure 3 also shows the growing number of master’s in business students who would be open to predominantly online programs without a physical campus nearby.

 

The Bottom Line

As interest in MBA programs has waned, specialized business programs—particularly those offered in a distance format with a more specific focus such as marketing or accounting—have been the primary engine of growth for business master’s programs. Online programs, be they MBA or specialized business master’s, have grown more than non-distance programs in recent years, and prospective students indicate increasing acceptance of wholly online programs run by institutions that do not have a physical presence near the enrolled student.

While institutions should be mindful of the trends occurring across the national market, however, they should also be wary of the implications for their specific portfolios of master’s programs. While increases in wholly online programs without a residential component mark a trend, they do not denote a sea change. Our surveys still show that a majority of prospective adult learners are interested in programs that have some in-person element.

Importantly, it is the regional market, and the regional economies of the communities that an institution serves that make up the primary current on which most master’s in business programs navigate. The national market should not be viewed as a tide that raises (or sinks!) all boats, but rather, as an undertow to always be aware of.

Thursday, September 19, 2019 at 2PM ET/1PM CT

Prospective students are the leading edge of your institution’s identity; the students you recruit today represent your institution’s identity tomorrow. This means that successful recruiting not only fills your class, it also contributes to grass roots identity-building for your institution. 

Using Eduventures national research on prospective Student Mindsets™ and institutional brand segments, Eduventures Principal Analyst Kim Reid will illuminate two foundational questions of your institution’s identity positioning:

  • How can you use data to better understand what kinds of students are in your market?
  • How do they think about the institutions they are considering?

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