Despite the recession, the numbers taking MBA courses are increasing – but some think the peak could have been reached.

The world may be in recession, but its business schools are bulging at the seams. Last year, almost 9,500 students were enrolled in accredited MBA courses in Britain alone. This year, that figure has easily been surpassed.

"Applications have been buoyant for all top MBA programmes," says David Simpson, from London Business School. "People are looking to make changes – sometimes they're forced to – and the timing of the recession has given them the opportunity."

At top international business schools, this autumn's full-time MBA classes are the biggest on record. Harvard Business School's MBA class has increased from 900 to 940. At Insead, near Paris, the class is a record 976 and applications were up 20 per cent.

The number of applicants worldwide who took the Graduate Management Admission Test (GMAT), which most top schools demand, was up by 7 per cent on last year at 265,613. But can the boom last?

"My feeling is that the intake of 2009 will be the peak," says Kai Peters, chair of the Graduate Management Admission Council, which runs the GMAT. "I take a biblical approach. There've been seven fat years, so I think we'll have seven leaner ones now."

But at present, at least, Britain, with its reputation for international classes, remains remarkably popular with overseas students, 25,000 of whom applied for a course last year, according to a survey by the Association of MBAs (Amba).

"That's partly because the pound has weakened, so the added value of the MBA has gone up," says Professor Peter Moizer, dean of Leeds University Business School. But he does not see Britain's basic attraction diminishing. "Students here are taught using the latest thinking, in the English language."

"The exchange rate has worked in our favour," agrees Professor Michael Luger, director of Manchester Business School (MBS). "But of course, that could turn the other way. A lot of our students come from China and India, places that are developing their own higher education systems. So we're not counting on these robust numbers in the future."

Behind the current boom, then, lie some big questions. How many of these students are simply sheltering from the storm? How long can they afford to do that? Will there be enough jobs for them? And beyond that, can they be taught to avoid the kind of behaviour that caused the crisis?

Full-time MBA candidates have had to double-guess the recession in deciding what kind of course to take, and where to take it. Internationally, the standard American two-year course is in decline, and the number of top-flight one-year programmes has more than doubled in the past five years.

In this respect, Britain, where most full-time courses are one-year, is ahead of the curve. The two exceptions remain London Business School, where the course is between 15 and 21 months, and MBS, where the course is 18 months.

At Manchester, Luger defends the decision not to change. "The marginal cost of another six months is relatively low, given the benefits – the summer internship, the time to reflect on what they really want to do, or to go abroad for a term."

But Chris Jeffery, from Cass Business School, London, which offers a one-year programme, says the two-year model has been under pressure for some time. "At Cass, the intensity of learning is such that the gap between this and a longer course is minute or even non-existent."

For an American destined for Wall Street, a two-year programme in the US makes sense, concedes Conrad Chua, head of MBA recruitment at the Cambridge Judge Business School, where 160 students have just started their one-year course. "The internship fits recruitment schedules, and keeps the candidate close to Wall Street networks."

But not all North Americans want that, and the shorter Judge course continues to attract older international students, in particular, in numbers.

Experience, Chua believes, is vital during the recession. "It is the students who have worked through one business cycle – those with six to seven years of experience – who can best appreciate and derive insights from the current crisis," he says.

The recession has also affected what students are being taught. A research report to be published this autumn by Amba, in partnership with Durham Business School, indicates that schools are planning a wide range of changes to ensure their MBA remains relevant, including a greater emphasis on ethics and sustainability within the curriculum and a more multi-disciplinary approach.

Throughout the business school world, risk management and other finance courses are being reassessed. New courses are cropping up in the relationship between government and business, to reflect the privatisation of banks. The Analytics of Financial Crises is one of several new courses offered this year to MBA students at the University of Chicago Booth School of Business, which has a big branch in London.

Softer skills remain important. Asked what were the top three transferable skills their MBAs had taught them, Amba's alumni cited the ability to manage change, communication skills and an understanding of leadership. These were followed by the ability to deal with ambiguity and team-working.

Such skills will certainly be useful when next year's MBAs begin to look for jobs in a tough market. Already, recruiting companies are visiting fewer schools.

"Some major recruiters are cutting back on their MBA intake," admits Jeanette Purcell, chief executive of Amba. "Nomura and BP have cut it by half. But Anglo American, for example, has increased its intake.

"My impression is that those students who might have gone into finance are not having too much difficulty finding jobs elsewhere. Students have to change their expectations, but business schools have got much better at managing that. They've learnt from the last recession."

This year, the percentage internationally of MBAs from all programmes who graduated with job offers was 48 per cent – down from 57 per cent last year, but still higher than the MBA classes of 2002 (44 per cent), according to GMAC.

"Right now, there are few consulting, finance or investment banking jobs out there, but there is a broader range of jobs," says Simpson, from LBS. "Our students are looking at opportunities in every sector. People want to work for younger organisations where they can have more of an impact. There is a healthy interest among students in the entrepreneurial landscape."

In this environment, potential candidates need to be particularly careful about which course to apply for. Does the preferred school offer bursaries? The big American schools watched their multimillion-dollar endowments plummet in value last year, and even European schools, less dependent on such funds, are tightening their belts.

"There are too many under-scaled programmes with not enough students," says Peters. "In Germany, for example, I think they had 12 MBA programmes in 2000, and there are 125 now. There will be a flight to quality."

He advises students to pick an accredited school that's big enough to be around for the long run. "Then go and look at it if you can. It's a big investment of your time and money. Use your common sense. If you're a finance person, LBS is a good school. If you're a strategy person, Ashridge [where Peters is chief executive] is a fine place. If you don't like the French, don't go to Insead. And don't go to Cape Town unless you know you want to work in South Africa."

'Employers say softer skills are sometimes lacking'

The MBA remains robust and popular even in the face of turmoil caused by the economic downturn. That’s the result of a survey of surveys that Amba, the Association of MBAs, prepared for employers this year. The 2,000 international MBA graduates polled by Amba’s research and consultancy centre have seen salaryincreases of 46 per cent immediately on graduation, 129 per cent three to five years later, and 208 per cent six to 10 years after graduation. The average base salary in Britain was £70,250 – and the most recent figures suggest that MBA salaries are at least holding steady during the economic downturn.

More MBAs now work in consulting than in finance. Start-ups are popular with some – 27 per cent of graduates are employed in organisations that employ fewer than 50 people. Pharmaceuticals, health care and finance are the most lucrative sectors. In 2008, 59 per cent of the graduates got a bonus. This year, however, the bonuses stayed at the same level – and more than a third expect them to decrease next year. There are some puzzles. MBA graduates think the softer skills involved in

MBA study, such as negotiation and leadership, have had as much impact on their career as the more functional, traditional areas of learning such as marketing, accounting, and finance. But employers say softer skills are sometimes lacking among MBA graduates.

"I think employers are basing their judgement on the MBAs they’ve been recruiting over the past 10 years, most of whom might not have gone through the newer programmes, on which softer skills are more widely taught," says Jeanette Purcell, Amba’s chief executive. "But such skills are notoriously hard to instil."