The Rise of the European B-School European MBA programs may have traditionally lacked the brand recognition of their U.S. counterparts, but that's changing fast. The continent's increasingly dynamic business environment, improvements to curricula, and growing corporate demand for employees with international experience are attracting top-notch candidates from all over the world. In addition, most Europe management programs are cheaper, shorter, smaller, and more diverse than their U.S. rivals, which is drawing a growing number of American students to studies in the Old World. Applications from the U.S. to INSEAD, an elite French business school with campuses in Fontainebleau and Singapore, grew 20% in the past year and the school's 2008 enrollment of Americans grew nearly 24% since 2007, to 73 students. Barcelona-based IESE Business School received 32% more applications from the U.S. this year than last, and expects to enroll 35 Americans in the next class—an increase of 60%. Another Barcelona-based institution, ESADE, has fielded so many inquiries from Americans about its full-time MBA programs that it has begun encouraging them to wait until next year to apply. INSEAD's dean, Frank Brown, says ever more young people are recognizing the value of an MBA but don't want to spend two years earning one—the length of most U.S. programs. Others credit the U.S. recession. "Probably, the economic fear is making people think that it's a good year for education," says Olaya Garcia, ESADE's director of full-time MBA programs. Bargains Despite a Weak Dollar Despite the euro's steep rise against the dollar, which raises the cost of European programs for U.S. students, prospective applicants are still heading across the Atlantic for a good deal. Nicole Baum, a 27-year-old Chicagoan studying at SDA Bocconi in Milan, one of Europe's top 10 business schools, said she turned down NYU's Stern School of Business in part because tuition cost 30% more there. The average tuition at the top 10 European schools is less than $73,000, vs. $86,600 at Harvard Business School, and about $95,000 at Wharton. Only one elite European program costs more than the Wharton degree: IESE's 18-month full-time MBA—long, by European standards—at €64,900 ($102,000). Tuition at the least expensive school surveyed by BusinessWeek, Vlerick Leuven Gent in Belgium, runs just €17,000 ($26,000). Furthermore, MBA students are increasingly looking to pursue social justice through business, and many European schools have responded with a wealth of new courses on corporate social responsibility, social entrepreneurship, and doing business in developing countries. In 2004, Instituto de Empresa Business School in Madrid, another elite institution, founded the Center for Eco-Intelligent Management to teach sustainable business practices. That same year Oxford opened the Skoll Center for Social Entrepreneurship, which provides five MBA scholarships a year. Economic and Geographic Diversity The international mix of students at European schools also attracts applicants. Just 14% of 188 full-time MBA students at HEC-Paris, one of France's elite grandes écoles, are French, and just 5% of 215 full-time MBA students at Oxford hail from Great Britain—figures typical of top European programs. By contrast, 63% of the 900-strong MBA class at Harvard Business School and 55% of Wharton's 800 MBA students are American. Most of the 25 European programs in this BusinessWeek report enroll fewer than 100 students a year, making class diversity even more pronounced. The 50 full-time students at Vlerick Leuven Gent represent 30 nationalities. The Grenoble Graduate School of Business' 26 full-time MBA students at its French campus hail from 13 countries, including Azerbaijan and Moldova. To build on their growing reputations, many European institutions are now opening satellite campuses in other parts of the world, particularly the Middle East and Asia. Many have launched executive training programs in Dubai and Abu Dhabi and some have merged with foreign schools or built business programs abroad. About a third of MBA students at INSEAD study at the school's campus in Singapore, where ESSEC, another grande école, also has a campus. The Bologna Accord to Change Higher Education EM Lyon, also a French school, opened a campus last year in Shanghai and plans to send 10% of its full-time students there for an additional three months of study. Vlerick Leuven Gent absorbed a Russian business school in St. Petersburg in 2006, and plans to launch MBA programs at China's Peking University in October. Since 2000, the Grenoble Graduate School of Business has launched part-time MBA programs in Moscow, Tbilisi, Georgia, and Chisinau, Moldova. A potential threat to the growth of European MBA programs is the Bologna accord, in which 46 European countries have pledged to adopt an Anglo-American system of higher education by 2010 and to recognize each other's degrees more than in the past. Rather than spending as many as six years at one school to earn one degree, students will complete a bachelor's degree in three to four years and have the option to do a master's elsewhere. Julian Birkinshaw, deputy dean of programs at London Business School, says the accord has encouraged a proliferation of masters in management programs aimed at 21-year-olds—typically students directly out of college. He fears these may cannibalize graduate MBA programs generally aimed at students with work experience. Indeed, more than two-thirds of Europe's 300 masters in management programs were created after 2005. In the same period, the number of MBA programs has grown from a handful to about 70, according to data from the Graduate Management Admissions Council. Bright Outlook The dean of IE Business School, Santiago Iniguez, takes a different view. The accord "could be the equivalent of what the euro meant for the economy," he says, fostering an academic fluidity among nations not seen since perhaps the 13th century, when European scholars traveled freely among universities and discoursed in Latin, the lingua franca. "Pre-experience" masters programs won't detract from the MBA market, Iniguez says, because the two degrees target two very different audiences. While the repercussions for Europe's MBA programs remain to be seen, the current outlook is bright: Applications are up, admissions are increasingly selective, and ever more companies are demanding multilingual recruits with global polish. With the number of programs specializing in disciplines such as entrepreneurship, finance, and corporate social responsibility on the rise, Europe remains a compelling locale for MBA education. Harvard Business School, beware!