April 24-28 I travelled to Shanghai to visit with our partner school, Shanghai International Studies University (SISU). There were two items on the agenda. The first was to attend a conference hosted by SISU on "The Shanghai Free Trade Zone and Preparing Interdisciplinary Students for the Global Economy." This may seem like an odd pairing for a conference, but the two are connected in the sense that Shanghai is looking to its relatively new FTZ as a catalyst for growth through innovation, and they know they need to prepare creative and entrepreneurial leaders to succeed, thus the second theme of education.
I was asked to make a presentation on trends in business education. First I discussed the new environment higher education faces in terms of the disruptive change being caused by technology and the increased challenges coming from the affordability of higher education. I then explored four important trends in business education -- increased emphasis on the integration of liberal arts education in undergraduate programs, increased emphasis on application and experiential education, the globalization of the educational experience, and increased attention to the role of business in society. The full remarks are below, but I don't recommend reading since there are few insights given its length. :)
The conference ended up discussing two interesting themes. First, there is a strong desire in Shanghai to turn the city into a major financial center, the likes of New York or London. This will be challenging for the city, considering the head start that Hong Kong has and that Beijing is headquarters for many of China's major financial institutions and national government. If a major financial center is to emerge in the Asian region, Shanghai will be hard pressed to be that city.
The second item that arose was the strong desire to have the Renminbi emerge as the dominant currency in the world market, replacing the US dollar. Many at the conference seemed quite focused on how the RMB had passed other currencies in trading levels. Surpassing the dollar is another matter. There are several issues that will slow down China in this quest, including lack of transparency in the government sector. While the world is amazed at the dis-function in Washington, DC, at least it can see what is going on. In China, one can only guess, and that does not sit well with global investors.
Second, the Federal Reserve is well understood by financial markets, performed well in the Great Recession, and enjoys political independence. China's central bank is neither understood nor independent.
Third, China has a fixed exchange rate and financial markets prefer a flexible rate, not trusting government currency intervention. China will be reluctant to allow for a float for the foreseeable future because of the impact on economic activity. The US, on the other hand, is much less dependent on trade and changes in the exchange rate have a limited effect on most of the population. This allows the government to worry less about exchange rates since political backlash is more muted. Not the case in China for now and the foreseeable future.
Fourth, China lacks the volume of financial activity and the major financial institutions the US has. This will no doubt change over time, but in some respects it is the least important factor. The institutional and governance issues are more important and unlikely to change for quite some time.
My second reason for visiting SISU was to meet with SISU students interested in enrolling in our 3-2 program with SISU for our Master of Professional Accounting degree. Students attend SISU for three years, then come to SU for two years to study accounting. The students earn their undergraduate degree from SISU and their MPAC from SU. We have been offering this program for several years and the results have been very good. The students are very smart and hard-working and their English is excellent. After all, SISU is a university that focuses on foreign languages, with students required to master a foreign language, and they do a terrific job training their students in English!
This year I interviewed six students, all of whom I know would be excellent students at SU. I hope we see all of them starting our MPAC program in September!
Here is a picture of me at Nanjing Road during my recent visit to Shanghai:
Here is the text of my presentation on business education:
I am delighted to have this opportunity to speak at this "International Conference on the Influence of the Shanghai Free Trade Zone &Training of Inter-disciplinary Students in a Global Context." Seattle University is very proud to have been able to partner with the Shanghai International Studies University over the last few years, one of China's most distinguished institutions of higher learning. What has impressed us the most about the university is how well you do on the most important measure of a university's success - the accomplishments of your students and alumni.
If you will indulge me, I would like to speak on emerging trends in business education. My perspective is mostly through the lens of someone working in the US, but I have some global exposure from serving on a board for a global network of universities, as well as sitting on the Initial Accreditation Committee of AACSB (a global business accrediting body) and seeing information on many schools outside of the US who are applying for AACSB accreditation, including schools from China. Thus, I will endeavor not to provide a purely US-centric perspective.
Certainly, higher education in the US has faced a rapidly changing environment since the Great Recession, and schools, including our university, have been scrambling to respond to a new environment. The two factors that we must contend with are the role of technology in education, and the second is the affordability of higher education. Both these are impacting all areas of higher education, including business education.
With respect to technology, we have been hearing much about the disruptive nature of technology on higher education, best illustrated with the growth of MOOCs. They are seen as a threat by many and an opportunity by some. But really, for at least a decade many of us have been bracing for the impact of technology on higher education. We just did not know when it would start to impact traditional providers and in what form. The impact has been gradual and steady. We did not wake up one day and suddenly face a different world.
On-line delivery has slowly rolled out as different institutions one by one decide to begin those programs. My own institution has been very late to this party, and even now we do not really think about 100% online programs. This is because we want to preserve the personal attention we provide to our students, and want to be sure the use of technology does not disrupt that.
Instead, we are positioning ourselves to provide "hybrid" or "blended" programs that use both traditional face-to-face education and technology. The technology tools are getting better and they have allowed us to offer a better education to students, to be more successful in what we try to accomplish in our programs. Increased convenience coming from the use of technology is helpful, but by itself not the sole driver.
Increased convenience of delivery does have some impact on us, though, particularly for our graduate students who mostly work full-time and go to school part-time. We do believe that switching some of the course content on-line and coming to campus less often will be attractive to students trying to balance work, family, and school responsibilities.
While we do not see ourselves doing degree programs 100% on-line, we are looking at on-line certificate programs, particularly in niche areas where we might have specialized expertise.
All that said, I think this technology territory is changing very fast and what I say today could be very different a year from now.
The second issue is affordability. Several things have been happening in the US that impact affordability. First, taxpayer subsidies of public institutions are declining, so state schools are responding by raising tuition and pursuing students who pay higher out of state tuition rates (including students from abroad). Second, employers are cutting back tuition support programs for their employees, so students must rely more on their own financial resources. This especially impacts business graduate programs. Third, students are graduating from undergraduate studies with more debt, and this makes them less willing to take on more debt for graduate school. Fourth, private schools like my own, and increasingly public schools, have been raising tuition well above the rate of inflation year after year. This is not a sustainable practice in any industry. These high tuition levels are supporting high cost structures. In the US, we have lots of brick and mortar infrastructure and we are labor intensive, and both are costly. We are stuck in a "high-cost high-price" model.
On the one hand, these affordability trends should help our undergraduate programs because affordability issues should make students more career-focused and that should benefit undergraduate business enrollment. On the other hand, they should negatively affect our graduate enrollment because students do not want to take on more debt, they get less assistance from employers, and they hear a drumbeat of criticism of the value of an MBA degree.
As a consequence most business schools in the US are focusing on their graduate programs these days. They are shortening the time to degree, they are promoting certificates instead of degrees (because they require less time and expense), and they are creating one year graduate degree programs that attract students from overseas, including students from China. Some schools are also using 100% on-line programs to fill the gaps they have been experiencing.
My sense is that technology and affordability are also issues outside the US, but not to the same degree, at least not yet. It varies by region, of course, with the UK and Australia being much more aggressive in the use of technology. I will be interested to hear from you how you think this plays out in China!
So against this backdrop, let us talk about some emerging trends in what we deliver. There are four I will mention - liberal arts education, globalization, experiential education, and the role of business in society.
The first is an increasing emphasis on including liberal arts education in business education. Some private schools, including my own, have had this emphasis all along, but more schools are moving in this direction and being more intentional about integrating the liberal arts curriculum with the business curriculum as opposed to teaching them in silos. Note how this coincided with the interdisciplinary education theme of our conference!
This interest in liberal arts education in business can be illustrated by a book that was written in 2011, Rethinking Undergraduate Business Education, authored by Anne Colby, Thomas Ehrlich, William Sullivan, and Jonathan Dolle. The book suggests that we need to move beyond narrow technical business training to encourage creativity, critical thinking, sound judgment, and pursuit of the common good. It is hard to argue with this message. In response, the Aspen Institute launched a program to encourage this among business schools, the Aspen Undergraduate Business Education Consortium. The consortium works to integrate liberal learning and undergraduate business education. Approximately 40 business schools from around the world participate in the program, ranging from ESADE in Spain to the University of Pennsylvania in the US, and also includes my institution, Seattle University. It is important to note this applies to the undergraduate business degree. Graduate degrees are too specialized to take on this role.
A second trend, not especially new, but gaining increasing momentum, is the desire to globalize the educational experience. Thus, you have an ever increasing number of study abroad programs, international study tours, and other experiences overseas. This has led to increasing numbers of collaborations between universities in different countries, such as SISU in China and Seattle University in the US. There are increasing numbers of programs mixing cohorts from different countries, such as one program I know of that brings together students from China, the US, and Spain, and students participating in those programs at three different locations - China, the US, and Spain. Note that these initiatives are experiential and not just impacting the curriculum.
A related part of this is the globalization of student recruiting, not necessarily new, but something being done with greater frequency and by more players. So, now you have schools from Europe, the US, and Australia vigorously recruiting Chinese students. Soon the shoe will be on the other foot, as China and others will be recruiting students from those regions. At this point, there does not seem to be aggressive recruiting in the US by schools from overseas, but one can see that this will be changing going forward.
Globalization has given impetus to partnerships between schools in different nations. It only makes sense to have a partner on the ground who understands the market, the rules and regulations, etc… But increasingly you are seeing schools within countries partner, even schools that you might think would see themselves as competitors. What is driving this I think is the high cost structures we have in place. As an example, rather than start a costly engineering program we can have students take two years of general education at one university and send them somewhere else for the final years of specialized engineering education. Those programs existed years ago but over time they were not vigorously promoted. Now they are gaining new life.
A third trend is to make education more experiential, more applied. So, we are going to industry and non-profits for projects for students to work on. We are encouraging students to participate in internships. We are doing this because we have found out that this is how people learn, and it is a more interesting experience for the student. It is not just happening outside of class, but also in the classroom. Lecturing is disappearing in classrooms. It is more problem solving exercises, case study discussions, and student presentations. Technology facilitates the disappearance of lectures. Faculty record short segments of material and students watch those outside of class. Class time is left for higher order activity. This has been called "flipping the classroom," and it has been facilitated by the two trends of an increasing focus on application and improving technology.
I think a parallel trend will be increased co-curricular requirements for graduation. It will not just be the courses students take, but what other requirements do they have for graduation. Such requirements are not new, but they will become more prominent as they are facilitated by an applied approach to education. For example, you will see more schools requiring internships, requiring study abroad, requiring Excel certification, etc… with none of that tied to a specific course in the curriculum.
A final trend is much more discussion in the curriculum of the role of business in society. Some schools have always emphasized business ethics and social responsibility. They have always raised questions about the role of business in society. They have always addressed social responsibility, but with each business scandal there seems to be increased awareness of the need for schools to articulate that business is not about maximizing shareholder value and wealth accumulation, but rather business has a more noble role to play in terms of providing employment and income to workers, in terms of providing goods and services that meet genuine human needs, and doing all this in a sustainable way that does not compromise future generations. At Seattle University we have always approached things this way, but even we feel like we must be even more intentional about it. So, in recent years we established a Center for Business Ethics, we began hosting something called "Business Ethics Week," which brings business leaders to campus to speak to every class meeting that week about a business ethics challenge (to signal to students its importance), etc…
On top of what individual schools are doing, you have other entities giving emphasis to it. So, for example, you have AACSB making ethics part of its expectations for accreditation. Or, you have the development of the United Nations Global Compact spinning out a program for higher education, the Principles of Responsible Management Education (which nearly 600 business schools worldwide participate in).
So to conclude, business schools have found themselves in a new environment where changing affordability and changing technology are having profound impacts on our operations. Against this backdrop, schools are responding with new programs and new approaches. Part of the response includes weaving new elements into our approach to business education. Four trends that I have identified are greater emphasis on liberal arts education, globalization, experiential education, and the role of business in society. They are all highly relevant to our conference theme of "Preparing Inter-disciplinary Students in a Global Context."
Thank you for your attention and the opportunity to speak to you today, and I look forward to further discussions and your insights on the important themes of our conference.