The Future for Russia’s Business Schools: Challenges and Opportunities

Taking my first stroll around the Russian Presidential Academy of National Economy and Public Administration (RANEPA) campus in early January, I noticed two things: snow and security. One was a little lighter than usual for the time of year; the other considerably heavier.

The heightened security was explained by the visit of Russian Prime Minister, Dmitry Medvedev, to the Gaidar Forum, a Russian alternative to the World Economic Forum, hosted by RANEPA each year.

RANEPA has not one, but four business schools, all with their own faculties and deans. Among them, the Institute of Business Studies (IBS) Moscow, whose dean, Sergey Myasoedov, invited me to speak at Gaidar on the topic of business school rankings.

From my time in Russia, I’ve seen the potential for the business education market there. Russia could one day become a global player in the industry. Russia faces challenges. But where there is challenge, there is opportunity.

Challenges: A Problem of Perception

The Russian Association of Business Education (RABE) boasts over 100 members and many of them are looking to expand outside the country and attract more international students.

According to a report from Russia's Expert Analytical Center (PDF), the number of international students in Russia is expected to double—from around 200,000 to 400,000—by 2025. In 2015, over 14 percent of international students in Russia enrolled in business and economics programs.

The problem, currently, is that over 60 percent of those international students come from former Soviet countries that make up the Commonwealth of Independent States (CIS); 24 percent come from Asia; around 5 percent from Africa; only 3 percent from Western Europe.

This arrangement works well for Russian schools, but to become truly global players—and to give their students a true global diversity of experience and opinions in class—they need to expand westward, toward where business education was born.

In attracting students from outside, Russia’s challenge is one of perception. Whether it’s history, politics, or the economy, Russia has an image problem in the West and that does impact application decisions.

A BusinessBecause survey conducted in 2018 revealed that one in two business school applicants say geopolitical issues have a significant impact on their decision to apply to business school—and Russia has had its fair share of those.

Indeed, according to research from CarringtonCrisp, a country’s reputation is either the most or second-most important factor for prospective business school students when choosing where to study. Even when I arrived at Gaidar, I was congratulated for attending: “You weren’t scared!” they said.

Other challenges are more concrete. English-language programs are still in a minority, and attracting the international faculty to teach them is difficult.

MBA and business master’s degrees are not yet legally recognized by the Russian government. To fit into the global market, a change of mindset is needed to recognize MBAs and master’s programs as academic rather than vocational degrees. Similarly, while in the West economics and business faculties are distinct from one another, in Russia they’re often combined.

Russian business schools have a responsibility to promote not just themselves but the idea of Russian business education as a whole. This will improve Russia’s reputation abroad, so international business school candidates might think of Russia—as they might increasingly do China—as a viable option.

Opportunities: 5 Building Blocks

It’s a tough task, but I see five areas of opportunity for Russian business schools—think of them as five building blocks toward internationalization:

1. Accreditation

AACSB has nine member schools from Russia. AMBA accredits programs at 13 Russian schools. Getting accredited by any of the three major accreditation bodies (AACSB, AMBA, and EFMD) brings an international stamp of quality. It can be a marketing tool, important for recruiting internationally. And accreditation brings a network, opening opportunities for collaborating and knowledge-sharing with business schools around the world.

2. Rankings

Longer-term, schools know that accreditation can open doors to international rankings. The Financial Times’ Global MBA Ranking, for example, only lists AACSB-accredited schools. However, this limitation did not pass without criticism at Gaidar. If rankings are to be a true reflection of the market, critics say they should be open to anyone—accredited or not. Getting AACSB accredited also takes time, so some upstart schools are disillusioned with the way the FT ranking inherently rewards schools that have been around longer. While rankings can be controversial, research indicates they are an important factor for attracting students. According to 2018 survey data from the Graduate Management Admission Council (not yet published), 81 percent of prospective graduate business students globally consult rankings when researching business schools. In Eastern Europe specifically, 80 percent of survey respondents report rankings as a consideration in their business school search. Russian schools don’t want to be left out of that consideration.

3. Partnerships

Russian schools can build their brands by establishing partnerships with bigger-name schools, for student exchanges, dual degree programs, and collaboration on research. IBS Moscow, for example, has more than 100 partners and 17 double-degree programs, including a joint-EMBA with Antwerp Management School. If a steady stream of students and faculty flow both to and from Russia, this will only benefit the international profile of Russian schools.

4. Online Programs

The online space presents a chance for a Russian business school to reach a potential global market of students unable to relocate to study in Russia itself. Entering the online space is a challenge. On the internet, brand is especially important. That’s why many online programs—initially assumed to widen a school’s reach—have a very local audience. Also, for this reason, a partnership with a big-name school online would be useful. But the opportunity is there for the right quality program at the right price. One school to watch is the Eurasian Management & Administration School (EMAS). Its Rector, Andrei Kolyada, says that 25 percent of the students it attracts come from outside Russia and the CIS countries. At Gaidar, he claimed that EMAS is “the only Russian school to export a Russian MBA.”

5. Alumni

Alumni are an essential marketing and recruitment tool, and Russian schools need to use the few international graduates they have to their advantage, to spread the word about studying in Russia and encourage others to do the same. This engagement needs to start when alumni are students. While U.S. schools are largely built on alumni referrals and funding, there’s less of a culture of fundraising in the former Soviet Union, where previously everything was paid for by the state. So, schools need to drive a culture change to create engaged communities of students and alums.

Using these five building blocks, Russian business schools can construct a bridge to the West. This, combined with effective marketing campaigns, will help schools open to new markets and increase their international profiles.