German Economic Institute (IW) Study: Private Universities Provide Excellent Preparation for the Future World of Work

Two students from Munich Business School standing together at a flipchart with "success" written on it, representing a typical practical work situation at private universities.

A study by the German Economic Institute (IW) study has highlighted how private universities can help to build resilience in the context of societal transformation. The report also highlights how universities’ offerings in this area have developed in recent years.

The idea of studying at a private university is associated with certain preconceptions: the private system is too elitist, too expensive and lacks academic rigor. But is there anything to these sharp-tongued criticisms? Is the investment of several (tens of) thousands of euros worthwhile? And how do prospective students perceive private universities – especially in relation to their career prospects? The Cologne-based German Economic Institute (IW) has now conducted a study on behalf of the German Association of Private Universities (VPH) to cast light on these very issues.

Demand for places at private universities higher than ever

One thing became clear at the very outset: private university education is booming. Within a decade, between the fall terms in 2011/12 and 2021/22, the number of students at private universities has increased almost threefold. Overall student numbers have only risen by around a quarter over the same period. Consequently, the proportion of students at private universities has more than doubled, from 5.3% to 11.6% of all students.

The student body at private universities is also more diverse than is often presumed. For example, 27% of students enrolled at private universities are over the age of 30, with many already in work. This can be attributed to the complementarity of study programs at private universities compared to those offered by public institutions. For example, private universities are more likely to offer distance-learning and part-time courses than their public counterparts.

Private universities specializing in economics-related fields – such as Munich Business School – hold particular significance in the private university landscape. More than one in three students at private universities are enrolled in such programs, while the figure at public universities is only around one in eight.

Career orientation a key factor in choosing a private university

By examining a reference group, the IW study was able to demonstrate how the motivations of people who study (or have studied) at a private university differ from those of people who opted for a public institution. Overall students at private universities tend to be more career-oriented: 78% expressed a desire to progress in their current profession (compared to 75% for students at public universities). This motivation was followed by the expectation of a good salary and a desire to make a difference, prepare for the uncertainties of the working world and lay the foundations for future self-employment. A more pronounced focus on professional life is also reflected in a stronger motivation among private university students.

Respondents believe academic education has significant role to play in a VUCA world

There is some concern, including among university graduates, about how the future world of work – and gainful employment more widely –  will change as a result of economic, social and technological upheaval. Younger respondents, who have more of their working life ahead of them, expressed the most concern on this issue.

All respondents to the IW study, whether or not they hold a university degree, indicated a belief that academic education has a very significant role to play in managing the challenges of this transformation. It is interesting to note that some respondents – but especially those with a private university education – believe that this significance extends beyond issues related to the labor market. In fact, over 60% of people who have studied at a private university consider academic education to have a stabilizing effect on life, an opinion shared by less than 50% of students at public universities.

Flexibility, a practical focus, international networks, a good student-faculty ratio and innovative organization identified as determining characteristics of future education

Respondents identified the following factors as particularly important for university education to build resilience:

  • Links between studies and practice
  • Good student-faculty ratio
  • Service-focused, innovative program organization
  • International networking
  • Flexibility, e.g. modular study programs

So, to what extent do respondents believe these requirements have already been met? And how satisfied are they with their studies?

Overall, the vast majority of university graduates felt that their studies prepared them appropriately for the requirements of the future world of work. It is notable that students and graduates of private universities expressed higher satisfaction on this issue – including in relation to their ability to handle high workloads, identify customers’ needs and find compromises.

Private universities in Germany therefore appear to supplement existing programs from public institutions, including through their fundamental career focus and flexibility. In addition, students at private institutions also feel particularly well prepared for the central challenges of professional life.

As regards the factors listed above, survey respondents were particularly satisfied with the flexibility of their studies and the student-faculty ratio – with students and graduates at private universities reporting higher satisfaction on the latter criterion than those at public universities. The majority (60%) of private university students were also positive about the practical focus of their studies.

Society appreciates quality of private universities; some concerns persist regarding accessibility

In the final stage of the evaluation, the IW study compared the perception of private educational opportunities among private students with that of students at public universities. The report shows that even people without first-hand experience of private university education believe it has a positive impact on overcoming the challenges of current societal transformation. In a direct comparison between private and public universities, all stakeholder groups assessed private universities as impressive in relation to their innovative capacity, modernity, practical links, student-faculty ratio, flexibility and agility. Another interesting aspect is the fact that respondents with and without a degree expressed strong trust in private universities in relation to their continuing professional development courses.

Nevertheless, despite their fundamentally attractive profile, private universities are still not widely known in society overall. In fact, almost six in ten respondents could not name a single private university. There is also widespread rejection of the notion of studying at a private university. This is due, on the one hand, to a lack of information about private university education and, on the other hand, to the perception that private universities are elitist and expensive.

Portrait of Stefan Baldi, Dean of Munich Business School

“Students at Munich Business School have told us of their satisfaction with their studies for many years. We are pleased that this satisfaction is reflected in wider society and that private universities are regarded as partners for life-long academic learning – not only by private university students but by people involved in tertiary education more widely. This perception confirms that our efforts in recent years, such as introducing a module on resilience management and expanding our mentoring activities, are on the right track and are also perceived as such. At the same time, the IW study provides interesting insights into potential areas for future development and existing preconceptions of private university education, which will also help us to target our efforts effectively in the future.”

Prof. Dr. Stefan Baldi, Dean of Munich Business School

You can read the full IW study commissioned by the VPH here (only available in German).

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