According to economics professor Dennis Hoffman, director of the L. William Seidman Research Institute at the W. P. Carey School of Business at Arizona State University, the answer is yes.
“In general, business school is an investment that yields very high returns,” said Hoffman. “Increasing costs, due to dynamics at the federal state and local government levels, have forced schools to become more efficient and selective in order to maintain quality, and it has translated to higher tuition. Despite that, the data speaks clearly about the value of college education.”
Students who study management have been found to have an average lifetime earnings of $2.6 million, according to a new report by the U.S. Census Bureau. But with soaring tuition and rags-to-riches stories of college drop-outs like Facebook’s Mark Zuckerberg, how can students feel confident with their decision to attend business school?
“If you know you can develop your own Microsoft, do it. But the vast majority of us don’t have those ideas sitting around,” said Hoffman. “Investment of capital into business schools still reaps the award (reward?).”
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While Hoffman sees MBA degree programs as sound investments, it doesn’t mean that students have to settle for the traditional options.
“Even with the slow pace of current hiring, employers are screaming for skills that will set employees apart,” said Hoffman. “They want workers that will add value from day one. Employees that hit the ground running are clearly in demand.” He believes that this is driving students to specialized MBA concentrations and master’s degrees. The Council of Graduate Studies (CGS) report found that while full-time MBA enrollment has dropped, specialized masters concentrations has steadily grown 10% in the past decade.
Hoffman notes that at Arizona State University, the business and executive education programs have added specialized certificates, four MBA concentrations, and flexible schedule options so students can complete their degrees face-to-face, hybrid or completely online.
“Students want degrees that are more tailored for special interest,” said Hoffman. “They want to acquire general skills, but they aren’t looking for a 100% business administration, but particular skills like logistics.”
Hoffman points to the trends of globalization and automation as another motivator for specialized skills. In automobile manufacturing, 30 years ago, one auto worker produced, on average, seven cars a year. Today, that numbers is 27-28 cars per year, due to automation. That, coupled with jobs being sent overseas, has made it harder to make a living with a blue-collar job.
“That route is just not available anymore,” described Hoffman. “These increasing pressures have forced workers to acquire more skills, but it has also led to a greater reward (financially).”
The CGS report also showed an increase in part-time MBA students. Hoffman said that more universities have become savvy of cost-conscious returning students. Many schools have focused on providing hyper-localized programs, such as the Beverage Business Institute at Colorado State University, which offers an online MBA in beverage management to reflect the big business of beer in Colorado. According to Hoffman, online MBA degree programs in general are an example of schools looking to meet the new needs of students.
“Students looking for specialized skills set are savvy enough to understand the rate of return of business school,” Hoffman said.
–Alanna Stage, @AlannaTweets