In this episode of Business Casual, the hosts explore trends in international student enrollment at US business schools, focusing on the increasing presence of Indian students and the decline of Chinese students. They highlight the potential influence of upcoming US elections on international student applications and the reliance of US schools on the Indian applicant pool for maintaining class sizes. The hosts delve into broader implications of these trends, such as the challenges Indian candidates face due to their growing numbers and the importance of education in Indian culture. They also point out the successful integration of Indian immigrants in the US workforce, especially those with a technical background, who enhance their skills with an MBA.

This episode not only focuses on the family and community support that Indian students often receive to pursue education abroad but also touches on the need for diversity in business school cohorts and how schools might adapt to the changing demographics of their applicants to maintain a balanced and diverse classroom environment.

Episode Transcript

[00:00:07.290] – John

Hello, everyone. Welcome to Business Casual, our weekly podcast. This is John Byrne with Poets and Quants, and I have my co hosts, Maria Wich-Vila and Caroline Diarte Edwards, in their homes. We are going to talk about a story we just ran on the US schools with the most Indian and Chinese students. If you’ve been listening to the podcast in the past, and we hope you have, we’ve talked a lot about the decline in domestic applicants to us schools. This is something that has been occurring over a number of years. Some of the decline has been offset by international students, and among the most popular international students are those from India. The latest data shows that Indian students at the top business schools are really at record levels. As a percentage, all the international students, those from India, accounted for roughly 33.7% in 2023. The year before, it was 28.5%. Chinese, not surprisingly, are down in part because of restrictions for travel and just the different changes in government attitudes in China. Among the international applicants, or, sorry, enrollment in the US business schools, it was down to 13.9 from 17.4 a year earlier. Caroline, what do you make of all this?

[00:01:38.220] – Caroline

Yeah, well, I think it looks like the Indian students have been benefiting from the decline in applications from China. So in the past, as you said, there were much higher volumes from China, and that has unfortunately declined as relations have soured between the countries and things have got much more difficult. And of know, there has been great, fantastic growth in India and a huge, well educated cohort of young professionals who are looking to expand their horizons and get into a good business school and get a great business education. And the US has always benefited from the draw that the traction it holds for international students. And so you see that coming through in those numbers. I wonder also possibly, and as you mentioned in the article, that there had been a decline in international applications during the Trump presidency, and of know that has turned around in the past two years with a more welcoming attitude to international students and employees and so on, coming into the country under the Biden administration. And I do wonder if possibly some students are looking to get in now before the election next year, as of course, twelve months time, we have another election, and it’s looking a bit dicey, in my opinion. I’m not quite sure which way things. Are going to go.

[00:03:10.160] – Caroline

I’m not terribly confident, unfortunately. So we will see the climate for international candidates could change again in twelve months time, potentially, right? We could be under a very different administration. And so I wonder if also that is at the back of the mind of some candidates that are thinking good to apply now rather than wait and see what happens in a year or so. But it also shows that American schools, they have become quite dependent on that Indian applicant pool to fill quite a few seats in their classrooms. Right. So that is a really important income stream for the schools. And they have a minority of international applicants and minority of international students on the programs. But quite a chunk, a big chunk of that cohort is coming from India. And I would imagine that the schools might like to have more diversity in that international cohort represented in the classroom. And the fact they don’t suggest that perhaps some of those schools are struggling to attract applicants in sufficient numbers from certain markets. I would imagine that they would like to have more diversity and perhaps more representation from other regions as well. But they are quite heavily reliant, it seems, on India.

[00:04:33.930] – John

Yeah, definitely, Maria. I mean, some of the numbers are pretty surprising. Like of the international cohorts at the University of Washington and Arizona state, this is for all programs, not only the MBA. So this would include other graduate business programs, including some of the specialty master’s programs. Two of three international students at Washington and Arizona are.

[00:05:00.670] – Maria

It’s, it’s, it’s amazing. I think it makes a lot of sense. I mean, India’s population is I think officially now the largest in the world. I think they surpassed China a little earlier this year. And out of the major economies, I think they are one of the fastest growing. So I think that maybe also in addition to the downturn in domestic applicants, I wonder if a lot of the business schools are looking at some of these growth projections for some of these countries, especially India, and saying, wow, if we can educate that next generation of business leaders, a rising tide will lift all boats and hopefully donations 10 – 20 years from now. So I wonder if that’s part of it. And I think if you look even today across the Fortune 500 and especially in the tech firms, we’re seeing a lot of it seems to be a pretty good winning combination so far of that Indian undergraduate engineering education combined with the flexibility and the lateral thinking and the strategic thinking that a US MBA provides. I think that there’s like a good combination in there, of you know, I think a lot of immigrants from India are coming with technical backgrounds, coming to the US and finding success in the business world.

[00:06:10.950] – Maria

So I think it’s a positive upward cycle where the Indian immigrants are having a lot of success and therefore which business school doesn’t want to be part of a success story with its alumni. And so I also think that that might be a part of it as well.

[00:06:27.580] – John

So does this mean that it’s going to be harder for an Indian candidate to get in? You think that these schools are kind of reaching a ceiling of sorts, Maria, or what?

[00:06:40.340] – Maria

I mean, it’s interesting, right? Because we know the percentage of students that are enrolled, but we don’t know the percentage of applicants. And so I almost wonder if disproportionately, I’m not sure, is it harder or easier to get in? I do think that at some point, every school does need to maintain a certain level of diversity, as Caroline pointed out earlier, because at a certain point, if you’re just going to have a lot of students from any one country, then you’re going to lose out on a lot of really enriching conversations across the student body. So I would think that there would have to be at some point perhaps a limit or a cap of some sort. But I also think that the schools need to be flexible on a year to year basis in accepting the strongest class they can.

[00:07:27.180] – John

The other thing, of course, I think that this reflects is the high value that many Indians place on higher education, which know one of the great attributes of Indians and also one of the reasons why so many academics in business school were born in India. And we have a good number of deans from India as well. I sometimes wish that more Americans would value higher education the same way that Indians do, because clearly this is a major priority. And I do know that families get together, including grandparents in some cases, to help fund the students to come to the United States and get an education. Isn’t that right, Caroline?

[00:08:14.990] – Caroline

Yes, absolutely. It’s often the extended family. It can be aunts, uncles, cousins, neighbors. It could often be an incredibly generous effort from the extended family that supports these students to get there. You’re absolutely right that it’s a huge effort. Right. When you look at salaries have increased for young professionals coming from India over the past few years. But still, when you look at what they’re earning, typically before they do an MBA, compared to their American peers, it’s a fraction, right? Typically on average, for candidates. So it takes a tremendous saving effort to be able to put themselves through usually a two year program that they’re attending in the US. So it is a huge investment. And I think that something else that we see with, as Maria mentioned, that often Indian candidates are then very successful in the workplace. And that combination of having that engineering background as well as the graduate school business education seems to be a fantastic combination. And something I think that they also bring and I can attest to this from having lived in India for a few years, is that to do well in India and to get through everyday life, you have to have creativity, flexibility, adaptability.

[00:09:41.810] – Caroline

It’s often a just more challenging environment. Right. And so if you have risen to the top in that environment, you have developed a broader range of skills, probably, than someone who has risen to the top in the US, because it’s much more complicated. Everyday life is much more complicated. Navigating all sorts of aspects of life, from your personal life to your professional life, it’s often more challenging. And so I think that Indians who’ve come up through that have developed incredible resourcefulness, which perhaps some of their compatriots elsewhere or some of their peers from other countries have not developed to the same extent. And those skills serve them incredibly well in the workplace.

[00:10:29.390] – John

True. Yeah. I think the other implication of this, given all of our view that schools would desire as diverse class as possible, what these stats tell me is that if you are an applicant from Europe, the Middle East, Africa, Australia, New Zealand, the odds are tilting in your favor, because I think schools would want more of those candidates in the classroom seats. Maria, wouldn’t you think that would be.

[00:11:02.070] – Maria

The numbers that we only, the only numbers that we are privy to are the enrollment numbers, and they’re usually provided at a broader regional level. So Europe versus individual countries, but we don’t know what those application numbers are. So it’s impossible to really come up with a country specific, or even a region specific admissions rate or admissions percentage. But I would assume know especially, I do think, from Europe, as I think we’ve mentioned before, with Caroline being the expert there, there are so many masters in management programs in Europe that the MBA itself, because there are so many alternatives to the MBA degree. I also think that there are fewer people seeking the MBA in the US from Europe. So I would think that there would be a bit more. You do tend to stand out, I would think, more from that country versus from India.

[00:11:51.980] – John

Yeah, totally. I imagine that this trend will likely continue as well, because while applications, by all accounts at this point, are going up this year, I think that the international domestic mix is still roughly the same. And I wonder if in your admissions advice business, you’re seeing any kind of difference in the mix of applicants from different areas of the world, Caroline.

[00:12:23.510] – Caroline

So I pulled up some statistics that they shared at the INSEAD reunion that I went to recently, and the percentage of Indian students at INSEAD has also increased. So it’s not just the US schools. So, for example, looking at the classes that will graduate this year, so the July and December classes of 2023, the school has a whopping 133 Indian students out of. So they didn’t give the total, but it’s typically around 1000. Right. It’s somewhere between 951,000. So around it’s somewhere between sort of 13, 14% from India, which is higher than it has been in the past. And if you’re interested, the nationalities with the highest representation at INSEAD, it’s India, Italy, France, China, Singapore, UK, US and Lebanon. But India is way above any other nationality in terms of number of students at the school. So I think that there’s just been an increase in the growth of candidates coming out of India and I think also an increase in the diversity of the applicant pool. In the past, I remember that the vast majority of the Indian applicants were typically male engineers. Right. But over time there have been more women applying, more people applying from a lot of different backgrounds.

[00:13:50.480] – Caroline

So the professional diversity represented within that pool has also increased, which has made it easier for the schools to accept more of those candidates because they’re looking for not just the diversity of the international population, but also within that group, diversity of profiles and backgrounds and professional experience.

[00:14:09.630] – John

Yeah, makes sense.

[00:14:10.980] – Maria

I also wonder if in the past couple of years, a number of MBA programs have been able to get STEM certification, which allows people to stay. They used to be able to stay for one year post the MBA, and now they can stay for three years. And I think a lot of applicants from India, it makes that investment decision a lot easier, because now if I know that I’m guaranteed to get at least three years of a salary, let’s say consulting banking or at a large tech company, I have several clients who took out the full amount of the loans to come to the United States. And now three, five years after graduation are well on their way to paying it back, if not fully paying it back. So I also think that that change in that policy has really know, make it an easier decision for candidates from India and from all over the world to come to the US.

[00:14:58.430] – John

That’s a good point, because you essentially get three shots at an H-1B visa if you have three years in which you’re allowed to work in the United States because you have a STEM designated degree. And I remember the first school to really do this is Rochester Simon and everyone else sort of followed in line. And pretty much it’s hard to find a US MBA program today that’s not STEM designated. Related to all this is a report from Forte foundation on women. And obviously, this is an area where schools over the last ten years in particular, have made major efforts to get closer to gender parity. And the Forte Foundation report shows that of their 58 member business schools, a record 42% have enrolled women in full time MBA programs. That’s up from 41% a year earlier in 2022. And five years ago the number was 38%. Ten years ago, it was only 34 to now it’s 42% of the students enrolled in these full time MBA programs after 58 member schools are women. That’s good news. The other interesting thing in the report is that forte found that 45% of women’s CEOs in the S and P 500 now hold an MBA or an equivalent advanced degree in business.

[00:16:25.470] – John

Yes, it’s true only 8% of the s and p 500 CEOs are women. But it’s interesting how important an advanced degree in business has become for the advancement of women into the key leadership role in a company. Caroline, I guess that probably isn’t surprising because in many know women, even though they have formed a minority of MBA students in the past, if you’re going to go for an MBA, you may as well go for really aiming for that top job in a company, right?

[00:17:00.760] – Caroline

Yeah. So women who are going back to graduate school, typically they are looking to go into leadership roles post MBA. And so I’m not surprised to see a really good representation of women in that group. It would be interesting to know how that compares to the percentage of men with MBAs in that group as well, and to see if women are more likely. Women in those positions are more likely to hold MBAs.

[00:17:28.430] – John

I think they are based on other studies that I’ve seen. It’s not mentioned in our article here, but I think among men, it’s more like 28% to 30% as opposed to 45.

[00:17:43.490] – Caroline

Yeah. And then it’s interesting to speculate why that would be. I think that the MBA does give you a lot more confidence in your abilities and confidence that you can tackle any challenge. And I think perhaps men are more likely to assume that they can do that anyway without an MBA.

[00:18:03.950] – John

Right.

[00:18:04.520] – Caroline

Than women who, of course, I’m sort of generalizing terribly. But I do think that women can sometimes be more modest about their talents than men, and therefore are perhaps more likely to believe in themselves once they hold an MBA and have that education behind them and the confidence that they actually have developed those skills, whereas men maybe are more likely to assume that they can do it and perhaps they can’t, but they have a higher self opinion sometimes.

[00:18:39.990] – John

Now, Maria, I think you would agree with that, wouldn’t you?

[00:18:45.110] – Maria

Oh, you just like to set the little minefield like, Maria, Maria, don’t you think that most men are just completely full of. I do. I do agree that perhaps in general, when I work with female candidates, sometimes I’ve just been doing some mock interviews in the past week or two for it’s mock interview season. And sometimes after, at the end I’ll say, okay, so how do you think that went? And the women are the ones that are most likely to be like, oh man, I think I did really badly. I think, oh man, I did not do well. And I’m like, I think you did fine. And it does happen to be that more often the male candidates will be like, yeah, I think I crushed it. And I’m like, well, everyone has room for improvement. So I will say that I do see that. And so there does tend to be, along gender lines, more of a I didn’t do very well versus I crushed it for people who did exactly the same. I also think in addition to the MBA, helping a woman feel more self confident, I also think that there’s also the external credibility factor where it may be that shareholders or the board of a public company might.

[00:19:54.020] – Maria

Maybe the woman has plenty of self confidence. I had plenty of self confidence prior to the MBA. But I do think that maybe externally speaking, if you are the board of a public company and you’re trying to vote on who your next CEO should be or figure out who that person should be, if that woman happens to have an MBA, it certainly doesn’t hurt. And so I would wonder if maybe the women are more likely to have an MBA for both of these reasons, both internal and external.

[00:20:26.030] – Caroline

Yeah, that’s right.

[00:20:27.880] – John

Makes sense to me. The study also found, and this is kind of interesting, that five of Forte’s member B schools, four in the US, one in the UK, have reached gender parity, with three more schools close behind by a percentage point. Or know, five years ago there was only one. So this is definitely moving in the right direction, which means, I think, that schools are incredibly welcoming and they’re really competing with each other to hit gender parity. Wharton’s at 50%, Kellogg at 48, University of Washington 47, Stanford 46, along with MIT, also at 46, Harvard is 45, Duke 45, Columbia 44, Dartmouth 44, and goes on from there. Interestingly enough, INSEAD among the international schools and is not alone, but IE  in Spain, at HEC, Paris in France, and IESC in Barcelona, along with INSEAD, all below 40%. INSEAD is at 38. IESC is at 35, at HEC Paris, 32 and IE 30%. Why are some of the European schools lagging behind? Caroline?

[00:21:46.010] – Caroline

Yeah, it’s a difficult challenge for the schools that you mentioned because the percentage of women in the applicant pool by country is not consistent. So, for example, INSEAD has a really great percentage of women in their applicant pool from the US, from China, from Singapore, from eastern Europe, but a much lower percentage of women in the applicant pool from some other countries, including Western Europe, which I find quite surprising. But that is the case. And from India, for example. And so because of that international diversity of the applicant pool and the fact that some countries don’t have very good representation of women in the applicant pool, it is harder for a school like INSEAD to push that percentage up. And for example, compared to the business schools at Oxford and Cambridge, where they have a higher percentage of women, I think that’s largely because they have a bigger cohort from the US. Americans really like to go and study in the UK if they’re going internationally and are very drawn to the brands of Oxford and Cambridge. And so those schools both attract very strong applicant pools from the US, and they have a larger chunk of Americans in the classroom than, for example, INSEAD does in the American applicant pool.

[00:23:05.220] – Caroline

There’s typically a very good chunk of women applicants. And so that is the challenge for a school like INSEAD. It’s related to the geographical diversity question.

[00:23:15.210] – John

Yep, absolutely. Well, there you have it. Hope you enjoyed our podcast. Join us next week. This is John Byrne with Poets and Quants.