As reported by The Economist, full-time MBA programs around the world have seen an increase in applicants this year. There is not a more certain indicator that the economic slowdown will continue for the next couple of years than this one.
Anyways, this does lead me back to some general thoughts on MBA programs, being a graduate of one such program myself. For prospective applicants, know why you want to go. Sure, it sounds cool. A way to differentiate yourself. A ticket to Wall Street or the executive suite. A way to avoid reality for 20 months.
But make no mistake: it is costly. Two years of suboptimal earnings, perhaps only broken by a decent paying 3 month long internship. Then there are the large tuition bills and of course, paying for your living expenses out of savings or through borrowing. Then there’s the catch when you become a freshly minted MBA: finding a job. It’s not as easy as it might seem to be when you review various MBA programs’ websites.
If you have had absolutely no formal business education and very little in the way of experience, you might learn something in the first year. Otherwise, it can seem like a very expensive rehash of stuff you already know. If you want to make a career switch, I think a MBA program can be worthwhile, provided you are able to land an internship in your desired field.
If you simply want to “get rich” or don’t know what you want for your career (not uncommon for many 20-something year old MBA students), you might not get that much out of a MBA program. Many MBA courses are devoted not to teaching how to make money (as in starting a business and selling it for a big chunk of change), but how to prepare one for corporate life. There’s certainly nothing wrong with that, provided that fits with your goals. There are MBA programs geared towards entrepreneurship, if you are so inclined.
Personally, I think many would be better served by considering part-time, evening, or weekend MBA programs or specialized master’s programs. Working while pursuing a MBA degree makes a significant difference in the total cost (factoring in the opportunity cost of not working full time for two years, not to mention putting yourself in a position for earlier promotions). There are also a wide variety of master’s programs in marketing, finance, real estate, and accounting which may get you where you want to go and give yourself a leg up on MBA grads.
I was one of those 20-somethings who went to a top 20 business school because I thought it sounded like a good idea. Overall, I’d have to say it was so. If you think of it as an introduction to a new career and an opportunity to make hundreds of lifelong contacts, you will probably find it worthwhile. If you have an entrepreneurial bent and learn better by doing, then devote your money and time to starting your own business.