Show us the money!

Is the FeesMustFall campaign causing public universities to covet the growing revenues of their business schools?

Prevented from raising their fees this year by fierce student protests, universities need alternative income sources. Where better to look than business schools which, unlike most other university departments, sell most of their services?

It’s not necessarily about taking the schools’ money (though it’s tempting to do so) but also about examining their business model. In parting comments just before leaving SA last month, former University of Cape Town Graduate School of Business (GSB) director Walter Baets said SA universities were notoriously inefficient and could learn a lot from their business schools, many of which are run like, well, businesses.

A look at the accompanying tables gives a sense of the demand for executive education. But it’s only a sense. In 2015, nearly 43,000 managers and executives attended programmes at schools participating in our market research. A handful of new schools will have added a couple of thousand to that number.

These are not the only avenues for executive education. Our research included interviews with 100 SA institutions from around SA, ranging from small to huge, and including private-sector, government departments and state-owned enterprises. They reported that just under 48% of their executive education is conducted by business schools, with the rest shared almost equally between business consultancies and inhouse training.

Other tables show where most of the subject demand is.

By some estimates, the annual schoolsbased executive education and MBA market is worth well over R800m, and growing. Institutions — private and public — that used to put most resources into MBAs, are benefiting from SA’s dire shortage of management skills as companies plough more into training staff at all management and supervisory levels.

At Henley Business School SA, dean Jon Foster-Pedley says revenue has grown 600% in five years, largely on the back of executive education. “It has overtaken MBAs in both headcount and revenue,” he says. “This year alone we have doubled business. In terms of total teaching activity, we are the busiest non-UK operation of any UK university.”

Henley is part of the UK’s Reading University but local schools are also reaping the benefits. Little wonder that university authorities are interested when main-campus student fees, a main source of income, are static.

Some business schools have endured ambivalent financial relationships with their universities in the past, with disagreement usually over what happens to income. Percentages vary but some is kept by the school and the rest goes to the university.

Wits Business School (WBS) director Steve Bluen admits he was concerned by potential fallout from FeesMustFall, particularly since his school is currently in an expansion phase involving on-campus construction and use of additional buildings to