Business school applications are through the roof this semester, and while that usually only happens when theres distress in the labor market, that may no longer be the case, thanks to changing applicant priorities and business realities.After two years of declines, business school programs saw a 12% spike in applications globally this school year, and an 8% increase in the United States, according to a recent study conducted by the Graduate Management Admissions Council, or GMAC. Overall, 72% of American institutions reported higher applicant volumes to their MBA programs this summer for the school year that began in September, as compared to 2023.Applications went up at the start of the pandemic, but in the years following weve seen applications decline, says the studys author, Andrew Walker, GMACs director of industry communications. This year we saw applications go up again, really across the board, but certainly among MBA programs, and especially among U.S. MBA programs.No Longer an Economic BellwetherHistorically, business school application volume has been closely correlated with economic and labor market trends, and it stands to reason. When job prospects are limited, people feel a greater need to earn credentials to improve their future earning potential. Theyre also less likely to have a career that they would otherwise need to pause to go back to school.This school year, however, feels different.To say that applications to MBA programs went up because there are fewer job opportunities, I just think thats too simple of an explanation, Walker says. I think it really is a more holistic decision that folks are making, and I think increasingly thats how business schools are presenting their value proposition.Walker explains that the correlation between macroeconomic forces and business school applications was strong in previous generations because most pursued the degree for the financial return on investment.According to a survey of Gen Z applicants conducted by GMAC in 2023, however, younger Americans increasingly view that return in more than just dollars and cents. In fact, the greatest share of respondents cited the opportunity to enhance their life and develop their potential as a reason for applying to business school. Increasing their future earnings, meanwhile, ranked second.Gen Z candidates, who are increasingly applying to business school now, see it as not just a means to make more money or advance their professional career, Walker says, but a place to find enrichment and to make a positive impact, to make themselves and their families proud, and as a means to achieve work-life balance.A New Generation of ApplicantsBusiness schools are still seeing high volumes of those applying for traditional reasons, but theyre also seeing a boost from applicants who may not have considered business school in generations past.Applicants these days are very different from when I started this 17 years ago, says Scott Edinburgh, the founder of admissions consulting firm Personal MBA Coach. It used to be that the economy goes up, the economy goes down, and that dictates application trends, but the economy is weird, and were seeing different, broader interests.Edinburgh explains that while his firm still caters to the traditional finance, founder, and consultant cohort, hes also seeing significant interest from nurses, teachers, designers, and even food scientists seeking to advance their careers or become leaders in their sectors in the future.I just got off the phone with a flight attendant who is applying to business school, and theyre not the only flight attendant that Im talking to right now, he says. Were seeing people coming from very different backgrounds than we saw in years past.A New Level of Complexity Across IndustriesEdinburgh attributes the broader interest in business school to the increasingly complex nature of business, coupled with a labor market thatwhile not exactly strugglingisnt offering professionals sufficient advancement opportunities, either.Were seeing a lot of people who are scared, where nothing is going wrong with what theyre doing, but theres just uncertainty, and they dont want to be stuck in a place that is not going to give them advancement, he says. Whether its DEI or AI, people are seeing that in order to lead they have to know how to play in those spaces, and their job is not teaching them that stuff, but business school is.Both Edinburgh and Walker applaud business schools for being responsive to those trends, as more seek to offer specialized training on subjects like artificial intelligence and nonprofit management while providing more flexible learning opportunities.With all the hype about AI and machine learning, for example, we now offer a program called MBAi that focuses on how AI is used in marketing, operations, finance, and the ethical deployment of AI from an organizational perspective, says Greg Hanifee, associate dean of the Kellogg School of Management. We also have a Golub [Capital] Board Fellows program, where students get assigned to a nonprofit in the Chicagoland area, and operate as a fully functioning board member.This year 70% of Kellogg students signed up for a social impact elective, and the Golub board fellows program was so popular among full-time students that it has since been expanded to include part-time students as well.Hanifee says Kellogg saw a 23% increase in applicants to its two-year MBA program this year, marking the second consecutive annual increase and the highest applicant volume of his 11-year tenure, aside from the pandemic spike in 2020 (when schools temporarily waived their standardized test requirements).All of our programs have seen double-digit increases, which is interesting, he says. Typically, in an uncertain economy more people go for our full-time program, because theyre taking a break or got laid off from work, but our evening and weekend programswhich are typically for people who are still workingare also up this cycle.Hanifee, like Edinburgh, is also seeing applicants from a broader array of career backgrounds, which he attributes to the increasingly complex nature of business across industries, and the increasing value of interdisciplinary education.We like to say that today and tomorrows problems are not going to be functional; theyre going to be complex across the organization and across stakeholders, he says. It really comes down to increasing complexity in the world, and how I can best prepare myself to lead in that world.Increasing Demand, Limited SupplyAs demand for business school programs increases, however, Hanifee warns that theyre also becoming more competitive.With a 23% increase in applications for a two-year program, were not growing the program 23% in terms of students, so yes, you can read from that that it becomes more competitive, he says.Its not just elite business schools like Kellogg that are expecting greater competition for enrollment next year, either. According to GMACs data, applications are up among top-ranked schools in the U.S. and around the world, as well as those lower down on the ranking lists and nontraditional business school programs.I have more people signed up [for admissions consulting services] for next year than Ive ever had in October, Personal MBA Coachs Edinburgh says. You have plenty of timeyou can do it this year, and wed be happy to help youbut we do see people starting [to prepare their apps] early, because theyre seeing that its more competitive this year, and I do predict it will be even more competitive next year.