UK business schools are preparing for a period of what one leader described as “painful growth” as they shift focus from traditional international-student recruitment to diversification of their education portfolio.

The warning came at the annual conference of the Chartered Association of Business Schools on 10 November, where sector heads outlined the strategic response to constrained finances and falling domestic demand.

Stewart Robinson, dean of Newcastle University Business School and chair of the association, opened the conference by admitting many institutions are “half anticipating further decline” despite recent policy support.

He observed that while the government’s Post-16 Education and Skills White Paper proposed tuition-fee increases linked to inflation, around 40 per cent of business schools expect this will have “little or no impact” on their stability — in large part because the uplift merely maintains the status quo.

Against this backdrop, business schools are increasingly prioritising “purposeful growth” over scale for its own sake.

Katie Normington, vice-chancellor of De Montfort University, described how her institution’s business school is expanding overseas through a new Dubai campus and partnerships in Kazakhstan, Cambodia and Malaysia.

Across the sector, leaders identified shorter, modular courses, online learning, transnational education and adult returners via the Lifelong Learning Entitlement as the next frontier.

Mohammad Ali, pro-vice-chancellor and dean of business and law at Anglia Ruskin University, said the pivot is underway: “Until two years back it was about bringing more international students.

Now the ask is changing – it’s about diversification.” He cited projections that, globally, online learners will outnumber on-campus students by about 2028, signalling a major shift in how business education is delivered.

But Ali warned that “the levy that government is going to introduce will have a huge impact,” referring to policy measures such as an international-student fee and the shrinking 17-18 year-old cohort in the UK which is expected to peak in 2031.

He added: “We have four or five years to build new models of lifelong learning before that trend hits.” The implication is stark: UK business schools may need to restructure research programmes, reduce staff numbers or reallocate resources to new delivery modalities.

“Financially it will be painful; strategically, restructuring will be painful,” Ali told delegates.

The conference made clear that board-level governance, investment in online platforms and alignment with employer needs will become critical success factors.

The message to ministers was apparent: policy support, regulatory clarity and investment in lifelong provision are needed so that British business schools can lead innovation in a transforming higher-education landscape.

With traditional revenue models under pressure, the coming transition may represent the most significant evolution in the UK business-school sector in decades — one driven not by growth for its own sake but by deliberate adaptation to volatile markets and shifting learner demand.