In suburban streets, lawns once green have turned a golden yellow and on the farms, the parched landscape is typical of a country suffering from severe drought. But to prospective MBA students, Australia's economic environment remains enticingly green.
The economy is holding In mid January 2009, the U.S. reported the worst unemployment figures in 26 years at 7%. Interest rates were slashed to 0.25% in a desperate attempt to salvage what was left of a critically ill economy and the same dire news was radiating from other economic powers such as the U.K. and Japan.
Even China was not immune, with reports of growth almost halved. Meanwhile, in Australia, unemployment sat at a low 4.5% and the official cash rate was 4.25%. Although there is dispute about the extent of the crisis, most economists agree that Australia is well placed to avoid the worst of it. There is no doubt that the economy will slow, but it's unlikely to go into recession. Australia has a growing economy with a per capita GDP that exceeds most other developed countries and its proximity and professional ties with the Asia Pacific make it an ideal location for managers in any industry.
This cannot be said of any other major MBA market-the U.S. and Europe in particular. Australia is in an enviable position to respond aggressively and decisively to imposing threats. The great advantage Australian policymakers have on the fiscal front is that there is no concern about public debt levels becoming unsustainable, as is the case in much of Europe and the U.S., since we don't have any debt, says Mark Crosby, Associate Professor of Economics at the Melbourne Business School. And Australia's Federal government has been proactive.
Universally praised for its quick response, it announced the first of its stimulus packages late 2008 with fund injections into industry and cash payouts for lower income earners and first home buyers, followed by an investment partnership with the major banks to support the commercial property sector. The government also moved to ensure liquidity in financial systems and mortgage markets, and introduced reform to regulate credit and international finance, it guaranteed deposits and wholesale funding of financial institutions, and most importantly, boosted the confidence of everyday Australians. Coupled with lower interest rates and tax cuts, this makes Australia one of the most liveable places in the world.
The business scene is strong
What are the differences between doing business in Australia and doing business in the rest of the world?
According to visiting MBA students from Stern to Melbourne Business School (MBS) earlier this year, Australian executives are forced to have a more global perspective, to be less phased by adversity and to be more accountable in their marketing efforts-and they appear to place more value on an equitable life-work balance. Australians think of the whole world as a single market, unlike their overseas counterparts who think of it as separate markets, says Stern student Luis Sanz. Australians are exposed to different cultures' needs and have an open mind to different ideas.
This mindset encourages more creativity in business because of the need to deal with different consumer tastes. But isn't Australia too far from the world's biggest markets to be of benefit to really ambitious MBAs? Not at all, says John Seybolt, MBS Dean. Australia is inextricably linked to global corporates, not only because many major multinationals have offices here but also because of extensive trade relationships with other nations, particularly those in East Asia. Australia is seen as the gateway to the economic powerhouses of the future. Seventeen years of unprecedented economic growth has been fuelled by the commodities boom, but Australia's GDP is dominated by its services sector (68% of GDP). Agricultural and mining account for 57% of the nation's exports and 10% of GDP.
Major export markets include China, Japan and South Korea. With downturns in their economies, Australia will hurt, but it is in a privileged position to respond more effectively than anyone else, and the decline in the Australian dollar gives its exports a competitive edge-including education. Oil and gas producer Santos expects output in 2009 to be similar to 2008. Even the financial sector is thriving, with Australia's four major banks advancing into the top 20 earlier this year for the first time in history, and enjoying AA ratings that only 13 banks worldwide can attest to. And this will lead to new global growth opportunities.
What is the expected job scene for MBA graduates?
Placement results of last years' graduates at Australia's two most highly ranked schools were a match for any globally. AGSM reported 89% employed within the first three months, and MBS an exceptional 96%. Up to 70% of our students are employed even before they finish their MBA, mostly through the internship program, says Professor Seybolt. We attribute these successful results to the introduction two years ago of the most extensive careers services centre of any school in the Asia Pacific, and our excellent reputation with recruiters. And we are confident of good results again this year-despite the global doom and gloom. The QS Corporate Recruiters Survey this year supports this and results show that there are a growing number of recruiters looking for talented MBAs from regional schools. It is even more critical for employers now to hire well.
With limited resources, they can't afford to make mistakes. There is indeed a 'war for talent', says Professor Seybolt. Additionally it's becoming clear that there are no consistent past models that can predict the economic future so it becomes even more critical to employ people who can confidently deal with uncertainty-gather relevant information and make decisions amid great amounts of ambiguity.
This is what MBAs do-help people bring together relevant information across many disciplines, and then integrate these various approaches in the decision making process. Diversity has huge advantages Apart from functional capability, employers also look for 'soft skills' and although largely determined by innate qualities, schools can provide an optimal environment to develop their students' skills in this area. One skill in demand is 'global readiness'. Australian schools excel in this. Off course this in itself doesn't guarantee a multicultural experience or effective interactions in the MBA classroom. But good programs have admission processes that ensure academic, industry and cultural diversity.
MBS has more than 70% international students in its full-time MBA, but more than 30 countries are represented and no one culture dominates. This is deliberate to ensure an optimal learning environment, says Professor Seybolt.
There were more than 22,000 students enrolled in MBA programs in Australia in 2007, with 37% studying full-time and 63% part-time. Victorian institutes were the most popular with 31%, followed closely by NSW with 27% and Queensland with 21%. Australian schools like all others have seen an increase in application volumes in the past six months.
There was a 30% increase in applications for the full-time class at MBS in Jan 09. Students are seeing retrenchment packages as an opportunity to take a break from work and invest in their future through education. says Professor Seybolt. Australia does offer strong incentives for budding MBAs; an economy focused on product growth, an enviable lifestyle, visas that are supportive of students and migration, a multicultural setting in a world class education system, and access to the worlds' major corporate players.
Not surprising then that the grass looks greener here and that schools have experienced substantial increases in international applications.