It's nail-biting time for a lot of people. The business climate is stormy. The news is gloomy. Uncertainty thunders over the horizon.
So why am I going to attempt to predict the future? Because I've lived through downturns before. The recession that followed the dotcom bust and 9/11 caused a precipitous decline in MBA hiring and consequently in MBA application volume. It's instructive.
If articles start to appear about b-school grads without jobs, application volume will decline. Sharply. If hiring remains reasonable and most grads find jobs, even they don't receive super-sized bonuses, application volume will level off and perhaps decline slightly, but you won't see the dizzying drop that business schools experienced in 2002 and 2003.
One "leading indicator" of MBA application volume is GMAT test-taking and registration volume. For the first two months of 2008, those numbers have headed north, but mainly because of sizzling interest overseas.
"The number of GMAT registrations in the United States during the first two months of calendar year 2008 increased 5.53% compared with registration volume during the comparable period in 2007. Outside the United States, registration volume increased 24.22% during the period."
"The number of GMAT tests taken in the United States during the first two months of calendar year 2008 increased 7.08% compared with testing volume during the same period in 2007. Outside the United States, testing volume increased 21.92% during the period."
If the US economy remains in the dumps, I expect US b-school application volume to soften, especially if MBAs can't find jobs. Barring 9/11-type events or a sudden increase in the dollar's value, international demand for top business programs around the world will remain strong, probably stronger outside the US than in.
Implications: US MBA applicants could find opportunities if they apply this fall and take the MBA plunge in Fall '09. I expect that outside the top 10-15 schools competition will ease and applicants could gain entry to schools they didn't have a chance at this year. I don't think the softening will be as marked in the top tier. Overseas, US applicants may find that top international schools are much easier to get into and much harder to pay for.
For international applicants, especially those coming from countries like India that are over-represented in the applicant pool, competition will remain intense, especially in the top tier schols.
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Time will tell whether this post is genuinely prophetic or just a symptom of April Fools' Day.