MELBOURNE — Australian business schools, which rely heavily on overseas students, are seeking ways to attract degree candidates amid increasingly strong international competition, a global decline in M.B.A. applications, and a steep drop in international student numbers over all.
Educators have warned that the country must act soon to match the recruitment and pulling power of schools in Britain and the United States, while also addressing increasing competition from programs in Asia.
The number of international student visa applications in Australia has dropped almost 20 percent during the past fiscal year, the Immigration Department reports. Because Australian business schools depend on revenue from international students, that is a big problem. In 2010, more than 50 percent of international students in Australia were enrolled in management and commerce degrees, according to the Australian Trade Commission. The percentage is even higher in some M.B.A. programs — 70 percent of full-time students undertaking an M.B.A. at the Melbourne Business School this year are from abroad. In the M.B.A. program at RMIT University of Melbourne, 45 to 50 percent of students are international.
Under pressure from Australian universities, the Australian government last month announced changes in its student visa program in hopes of counteracting the decrease in applications.
At a news conference in Canberra on Sept. 22, Senator Christopher Evans, the minister for tertiary education, skills, jobs and workplace relations, said that because the number of international business schools in other countries was growing, universities in Australia “were wanting to make sure that our visa system allowed them to compete on an equal basis, or on a better basis, than some of the other competitor nations.”
International students completing masters’ degrees in business administration in Australia are expected to benefit from the changes, which introduce a two-year post-study visa, streamlined visa processing and more relaxed rules on students’ financial situations.
Amalia Di Iorio, director of M.B.A. programs at RMIT University in Melbourne, said via e-mail that the government’s policy changes should help reverse the decline in international enrollments. She added, however, that “there are other contributing factors to demand, including the value of the Australian dollar.”
Murali Chandrashekaran, former director of M.B.A programs at the Australian School of Business of the University of New South Wales, said the government changes would not make a difference in the short term because they were not scheduled to be implemented until the middle of next year. He added that it might be difficult to reverse the decline in international students because of the pattern of students turning to other providers.
Australian business schools face the additional issue of a global decline in M.B.A. applications; 78 percent of M.B.A. programs across the Asia Pacific region reported a drop in applications this year, according to the 2011 Applications Trends Survey conducted by the Graduate Management Admission Council, a nonprofit organization of leading graduate business schools around the world.
“The caution in this year’s survey for full-time M.B.A. programs is unsurprising in the current economy as students weigh the financial and time commitments required to pursue a graduate business degree,” David A. Wilson, president and chief executive of council, said in a release on the group’s Web site.
A Deloitte Access Economics report, commissioned by Universities Australia, an industry body representing Australia’s 39 universities, said the United States and Britain are Australia’s most significant competition for international students. These countries have advantages because they cultivate international partnerships and use education agents to recruit students, the report said.
Such agents assist students with practical tasks such as visa applications and insurance, the report said.
But Asian business schools are using similarly aggressive efforts to promote their programs. The Nanyang Business School, the Indian School of Business, the Hong Kong University of Science and Technology and the China Europe International Business School joined together last year under an umbrella called Top Asia B Schools, to promote their programs jointly at business school fairs.
Australian schools will face international competition on Australian soil when the SP Jain Center of Management — a business school with campuses in Dubai, Singapore, and Mumbai — opens a campus in Sydney next year.
Mr. Chandrashekaran said Asian business schools “really present a threat” to Australian schools, pointing out that over the years a number of programs in Asia had increased their global activity. As an example, he cited the Hong Kong University of Science and Technology’s M.B.A. program partnership with the Kellogg School of Management at Northwestern University as an example.
Ms. Di Iorio said that to compete, business schools in Australia should be delivering international study opportunities, work experience, strong alumni networks and a cost advantage.
Administrators at several Australian business schools responded that their M.B.A. programs were offering increasingly innovative opportunities.
Bond University on the Gold Coast offers an M.B.A. specifically designed for international students, encompassing study of Australian and workplace culture.
At the Deakin University Graduate School of Business in Melbourne, an elective for M.B.A. students involves a student voyage across the Tasman Sea to learn about teamwork and leadership.
In addition, many Australian business schools have set up international exchanges for their students, including the Melbourne Business School, which offers exchange programs to institutions in Asia, Europe and the Americas.
The Deloitte Access Economics report suggests Australian universities could “regain some market share” by offering joint degrees with other universities and by setting up more campuses abroad.
The report cited the TRIUM Executive M.B.A., a degree run by New York University’s Stern School of Business, the London School of Economics, and the H.E.C. School of Management in Paris. Upon completion of the TRIUM M.B.A., students are awarded an M.B.A. issued jointly by the three schools, and, accordingly, they have access to three alumni networks.
The Deloitte report acknowledges that setting up overseas campuses and joint partnerships with other universities may not be ideal from a pedagogic standpoint, because such arrangements often separate the teaching experience from the home institution. The report argues, however, that these strategies represent one way to meet the intense competition faced by Australian educators.
Mr. Chandrashekaran seconded the notion that Australian universities and business schools needed to invest in collaborative programs and overseas campuses.
“Many institutions including Duke and the University of Chicago have campuses in Asia so international students don’t need to travel so far,” he said. “Australian business schools need to work out how to engage Asia.”
“Overall,” Mr. Chandrashekaran said, “Australian business schools are not doing enough to remain competitive. Unless schools start having a clear strategy, they are going to feel the pinch.”