If you work in higher education -- as I do -- then you have no doubt noticed a few trends that most people outside the university system probably have not -- but should.
Applications to MBA programs are down -- significantly. According to Forbes.com, top MBA programs in the US have seen a significant decrease in applicants, with the top 10 schools experiencing a decline of 5.9 percent in 2018 from 2017. Early reports from several schools this year, from Fuqua School of Business to Yale School of Business to Chicago Booth, all indicate a continued decrease as well.
The overall decline in applicants can be attributed to a few things, chief among them are the strong U.S. economy and low unemployment. When it is easy to get a job, many adults will opt to work rather than go to school. Also, stricter working visa requirements and, to some extent, an anti-immigration sentiment, has led to fewer international students applying.
Historically, applications to MBA programs increase during economic downturns, as many out-of-work adults unable to find work take the opportunity to pursue an advanced degree instead. And while a number of indicators seem to indicate a looming recession, it is not certain that applications to business programs will increase if and when it happens -- and that should be the point of concern for businesses.
The situation is so dire that Andrew Ainslie, dean of the University of Rochester's Simon School of Business, predicts that "10 to 20 percent of the top 100 MBA programs in the US will likely close in the next few years, with even greater fallout among second- and third-tier schools."
Why might this happen? For starters, there simply are not enough young adults coming of age to provide growth to the university business programs. Birth rates and the number of young adults in the US are flat or falling, depending on what research you examine. Because universities -- and economies -- largely depend on population growth for part of its growth, this is troubling.
Much of the growth in the US, in fact, can be attributed to high birth rates, especially after World War II (the Baby Boomers). Since the 1970's, however, birth rates have been at or below 2 children per couple. Moreover, birth rate in the US hit a 32-year low this year at 1.8 children per couple.
It just requires a little common sense to realize that if we are not producing children to replace us, our supply of young students and workers cannot contribute to traditional growth.
Over the most recent decades, immigration has taken up much of the slack when it came to maintaining population growth, with the immigrant population growing to an all-time high of 43.7 million in 2016. As a percentage of total US population, however, growth is flat. Furthermore, stricter regulations for entry and anti-immigrant sentiment in the US could very well reduce this growth and contribute further to the population deficit.
What does this all mean for young adults and businesses? The decrease in applicants to business schools is just a symptom of a more important trend. As the population growth rate continues to decline and our supply of young adults and immigrants continues to decrease, the macro-level effect across the US will continue to be felt for years to come.
Of course, we can continue to spur economic growth through continued productivity improvements and investments in new and innovative industries. That implies, however, that individuals who work in and contribute to traditional businesses will decrease as ambitious talent leaves for these endeavors, which could create an even larger divide.
Preparing for all of this is simple. Most of us have been conditioned to having a long-term vision and goals, which is important for measuring progress toward individual growth. Equally important, however, are short-term goals and keeping your plans flexible. As conditions in the market and the industry you serve eb and flow, so should you.
For students, universities and companies alike, it is also important to never settle for the status quo and homeostasis. For the first time in generations, adaptability and openness to change are no longer suggested mindsets but rather a critical skillset that will sustain the successes of the future.
And while this may seem doom-and-gloom, I am optimistic about our future and believe we live in the greatest country on earth when it comes to opportunity -- for those who have the drive to seek it. I also believe, however, that the most successful -- and sustainable -- people and organizations of the future will be those that focus on micro-level (at the company and industry level) as well as macro-level (global) view of the world.