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Hodges: The UK's Looming Brain Drain

MBA students in the United Kingdom and many other European nations are fleeing for business schools – and jobs – elsewhere. And fewer students outside the UK are seeking higher education within the region.

While that is good news for the U.S., Middle East and emerging markets like China, it marks the beginning of a “brain drain” that may rob the UK and like-minded European Union countries of its finest future talent, with the prospect of it ultimately impacting the region’s competitiveness globally. It is also hurting UK universities just at a time when they are being forced to compete in the global marketplace.

At Hult International Business School, which operates MBA programs in five cities around the world, we are seeing a 74 percent increase in demand from UK and EU students this academic year – especially at our Shanghai, Boston and San Francisco campuses. London has by far the slowest growth in interest of any of our campuses. According to data produced by Graduate Management Admission Council in late 2011, many UK institutions are facing similar or worse situations. In that research 68 percent of European business schools reported a decrease in applications from full-time MBAs in the past year and only 19 percent reported an increase in applications.

So, why are MBA students beginning to forego top-notch European schools and employers for options elsewhere? Two primary factors have emerged, one of which can be corrected.

First and most importantly, the UK has constricted the options for post-study work visas, thus limiting the ability of non-EU graduate students to stay in the UK after their studies to look for work. This is in stark contrast to the policies in place in the US and Australia, the biggest competitors to the UK higher-education industry. Thus, international MBAs seeking to study and then kick-start their business careers in London are beginning to look elsewhere for more welcoming environments.

Additionally, the ongoing European economic crisis has not left unscathed higher education in general and MBA programs in particular. The crisis has begun an exodus of UK and other EU MBA students, who are now more eager to cast their lot with business schools and employers based in other parts of the world, where short-term prospects are rosier from both educational and economic perspectives.

These issues could not come at a worse time as UK universities are facing dramatic funding cuts due to the government’s austerity measures and the prospect of falling domestic enrollments due to the significant changes to tuition pricing that came into effect recently.

While the Eurozone’s woes will come and go, the post-study work visa issue appears to have the most sustaining long-term impact on the volume of MBA students and future workers who will matriculate to the UK. As a result, one can’t help but forecast a gloomy future for UK companies and the nation’s economy, as the supply of future leaders, managers, entrepreneurs and investors shift their focus and resources elsewhere.

While reducing net immigration was a central platform of Prime Minister David Cameron’s election manifesto, few voters and employers would have assumed that highly skilled graduate students, who bring billions of pounds into the UK economy and contribute significantly to the managerial bench-strength of local companies, would bear the brunt of this policy. The impact of similar measures was seen in Australia where foreign student enrollments declined by 30%. Such drastic changes in enrollments forced the Australian government to reverse their student immigration policy late last year by reopening post-study work visas.

The UK government would be prudent to follow Australia in reversing these actions that are steering the best students elsewhere. Otherwise, future leaders who would otherwise be positively impacting the universities, businesses, NGOs and financial markets in the UK will now negatively affect its global competitiveness for the foreseeable future.

Dr. Stephen Hodges joined Hult International Business School as Chairman of the Board in January 2006 and was elected President in August 2006, bringing with him a strong background in international business.

Dr. Hodges is a British citizen and holds a Ph.D from Manchester University and an MA from Cambridge University. He completed two years of post-doctorate research in electronic engineering with AT&T Laboratories in Cambridge and is the co-author of several patents in data communication.

Before coming to Hult, Dr. Hodges ran several large businesses and worked in a number of different countries: Hong Kong, India, Singapore, Taiwan, Spain, Germany, Sweden, and the United States as well as his home country, the United Kingdom.

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