Students who started their MBAs this week can give themselves a pat on the back. At least they are out there and proving their skills at a time when the global economy is getting worse by the day.

Thousands of others will be thinking of applying for similar courses later this year – perhaps a business Masters, or simply some executive education designed to improve their chances when skies start to look brighter.

Applications are up – but Professor Michael Osbaldeston, head of school at Cranfield, has seen recessions before. "My experience is that business schools are what's called a lagging indicator," he says, "which means that we are likely to suffer the consequences of a recession later rather than sooner. "It takes time for companies to turn off their executive education budgets, particularly when they have significantly invested in a customized partnership. The open programmes will suffer before the customised relationships."

At Cass Business School in London, Professor Stefan Szymanski accepts that fewer students will want to move into banking. "But there are also a lot of people deciding that this is a good time to dust off those plans and start their own businesses," he says.

When the dust settles Cass might change its curriculum to reflect the new realities of banking. Meanwhile, he says, every single lecturer is talking about the credit crunch. "It's a crisis of finance but also of management – how did senior managers allow themselves to be exposed to this catastrophe?"

Students applying for loans will need to be proactive. The funds on which schools – particularly the big American ones – depend for bursaries and scholarships have been severely dented. But the fall in the pound against the dollar is benefiting British schools, particularly those with one-year courses; there are reports of an upsurge in UK applications from American students.

No one knows how long the recession will last, so flexibility is vital. The Spanish business school ESADE, for example, has given next September's MBA intake the freedom not to choose the length of their programme until well into the course.

Michael Luger, dean of Manchester Business School, is less pessimistic as some of his colleagues. He foresees some improvement this year.

"Recessions end," he says. "Markets do work. Prices come down. The value of equities is at an historic low. The difference between this and the Thirties is that we have a worldwide co-ordinated response, and a rapid regulatory response. I see some positive signs."

Meanwhile, Manchester is putting extra resources into persuading recruiters onto the campus, and has opened a facility in London. "We have a very diverse portfolio," he says.

Career prospects are changing. Students who might once have set their sights on hedge fund management, private equity or consultancy are now looking at engineering and the public sector. Competition for the best internships will be intense.

"Jobs will not be as abundant as in the past, so the students will have to become much more entrepreneurial in their job search," says Professor Arnoud De Meyer, Director of Cambridge's Judge Business School. "The traditional on-campus recruitment will be reduced significantly and our graduates will have to invest much more in individual specialised job searches, in geographic places and industries, which they may not have considered in earlier days.

"We will no doubt see a few more entrepreneurial ventures, but I would expect also to see many more MBA graduates go into industry or to go to new business development jobs in less convenient places."

Some schools are expanding in the teeth of the recession. Liverpool University Management School has chosen 2009 to launch an international executive MBA programme, to be taught in Liverpool, India, China and North America. The cost: £28,000.

"We're taking a gamble that this is an opportunity," says Professor Murray Dalziel, who points to demographics. "The world is running out of leaders. There are more people leaving the professions than entering. Executives are getting younger."

Beyond the MBA, for aspiring executives in their early twenties there are thousands of business Masters courses, and for busy, seasoned professionals a huge choice of executive education ranging from one-day refresher courses to one-month intensive training. With all these, the best courses are accredited, with an international intake.

The focus of research is changing as the business world looks east. Dr Paul Temporal, of Oxford's Saïd Business School, recently announced a new branding and marketing research project focused exclusively on Islamic brands.

Attitudes to money-making are changing too. In particular, there is a new awareness of social conditions and climate change. Warwick Business School has launched a Global Business Energy MBA, with a module on sustainability and the low-carbon economy.

"Perhaps we have not spent as much time and energy as we should have done on responsible corporate behaviour," says Osbaldeston. "Ethical responsibility will move from being peripheral to being absolutely central: it covers the environment, sustainability and the whole area of business in society."

'It will make me a more rounded person'

Simon Brewster, 34, took redundancy from BA in December 2008 and is investing £29,500 in a full-time MBA at Ashridge Business School, which he started this week.

"When the voluntary severance offer came, I was running a team of commercial project managers at head office. I'd been with BA for 10 years, during which time I'd qualified as an accountant, and had worked in sales and customer service overseas, so I have built good all-round experience.

I was thinking about moving on anyway, and thought it was time to invest something in myself. I am interested in management consultancy, and feel an MBA will help me achieve my goals in this area. Ashridge had a course starting in January and I didn't want to wait around. Also, I liked the teaching style there – it's more about round-table learning than taking notes in a lecture theatre.

I had colleagues who would have liked to have done the same but couldn't. I'm quite fortunate in that respect because I'm single.

What I'd like to do, first, is tie all my experience together within the framework of an MBA. Second, I'm hoping to learn a lot about myself. It'll help me identify my strengths and improve on my weaknesses. It should make me a more rounded person."