Why the M.B.A. is Dying

The M.B.A. is dying a slow death. The Wall Street Journal reported today that applications have fallen for the fourth straight year. Some schools like Wake Forest University and the University of Iowa closed their flagship M.B.A. programs because of the low demand.† Universities may be worried about their endowments shrinking, but this is a good sign, it shows that the advancements in technology are democratizing access to information and providing more avenues for success. This is because trust and a track record of actual work are proving more valuable than an M.B.A.

Access to Information for All

Access to information becomes cheaper and better by the hour. Prestigious M.B.A. programs offer access to laudable professors, remarkable research-libraries and admittance to like-minded peer groups. It used to be that was the only place to obtain this wisdom. Now, you can watch these lectures for free with sites like Coursera. There are thousands of niche places to find like-minded peers. And you can find specialized educational platforms like CreativeLive, Codecademy, UDemy, and Lynda.com to name a few.‡

Trust Is The Real Commodity

An M.B.A. used to be a requirement to climb the corporate ladder. It’s a badge that says you know your stuff and are trustworthy. Today that is open to all. You can build trust with your employer and client by showing a track record of work. If you were looking to hire a new employee for your business who would you select? The candidate who has hands-on experience in the industry your business operates? Or a person who has written papers about it?

Experience builds trust faster than implied knowledge.

Those looking to gain experience can start their own projects and use that as a proof point. When I first started freelancing I created websites, podcasts, books, and e-commerce businesses to give myself the experience and learn as I went along. This later helped me land proper jobs at prestigious companies. I never took a single business class or marketing class in college. I just read every book on the subject.※

Historic Market Highs

Another reason the M.B.A. is less attractive is because of the market environment. The U.S. has been seeing record highs in employment and stock market performance. Consumer confidence is at an 18 year high.¶ Why would anyone want to take on $200,000 in student loans when they can get a job tomorrow? An M.B.A. is far from required. The traditional channels of pleasing the gatekeepers have flipped. Google, Apple, and even IBM have dropped their requirement of an undergraduate degree.§ I’ve seen M.B.A. candidates who were applying from outside the firm I worked at be denied. Instead, they selected the internal employee without the M.B.A. because of that person’s loyalty to the company. Finally, the double-edged sword of an M.B.A. is that it raises your salary demand. Who else is going to pay those student loans off?

Universities have to reassess what they can offer their students. Information access will continue to cost less and less. More companies will steer away from pricey M.B.A. candidates and instead focus on finding someone they can trust and who has a proven track record of hard work. The nice thing about trust and hard-work is that they’re both free.

Works Cited / Resources

† Gee, Kelsey. 2018. “M.B.A. Applications Decline at Harvard, Wharton, Other Elite Schools as Degree Loses Luster.” The Wall Street Journal, October 1. https://www.wsj.com/articles/m-b-a-applications-keep-falling-in-u-s-this-year-hitting-even-elite-schools-1538366461

‡ Resource: Coursera, Codecademy, lynda.com, CreativeLive, Udemy, Skillshare, Treehouse

※ Resource: 4 Books To Help Your Content Strategy

§ Reed, Jon. 2018. Tech careers are earned on the job — Apple, IBM, and Google’s degree requirement change was long overdue. September 6. https://diginomica.com/2018/09/06/tech-careers-are-earned-on-the-job-why-apple-ibm-and-googles-college-degree-requirement-change-was-long-overdue/.

¶ Oyedele, Akin. 2018. “Americans haven’t felt this good about the economy in 18 years, but that could be foreshadowing a coming recession.” Business Insider, September 25. https://www.businessinsider.com/us-economy-consumer-confidence-near-record-highs-may-signal-recession-2018-9

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