During the past few months, the economic slowdown has begun to take its toll. Share prices have tumbled and MBAs are finding it harder to secure that dream job. In some schools, especially in the US, recruiters have postponed or even rescinded job offers, while all around, corporations large and small, have instigated large-scale redundancies.

Faced with such straightened times, can companies really afford to run a corporate university?

A corporate university can cost as much or as little as a company wishes to invest, but an investment of several hundred thousand dollars is typical - far more if physical campuses are involved. Running costs can also eat away at a company's margins.

Jeanne Meister, president of Corporate University Xchange (CUX), the corporate education research and consulting company, says that it is short-sighted for a company to dismantle its corporate university in choppy economic times. Education, she says, is a vital tool and can add value to any company.

CUX is currently working with a healthcare company to establish a corporate university. The healthcare group spends $60m a year on training and wants to manage its training dollars more efficiently. CUX anticipates that the company's initial investment in its corporate university will be $3m more than its current training budget.

But among the expected benefits are: creating corporate alignment and synergies in learning initiatives - a 5 per cent reduction in operating expenses; establishing competitive advantage in the competition for talent -a5 per cent cut in employee attrition; reducing demand on management time through better learning initiative co-ordination - a half a per cent reduction in operating expenses.

Corporate universities can save their companies money, says Ms Meister. Moreover, she adds, in times of recession, while education may no longer be as important as a recruitment tool, it is more vital than ever as a retention tool. "For the truly good people, you do want to use your commitment to learning and education to keep them with you, rather than your competitor."

She says some corporate universities also offer courses to the families of employees, again as a retention tool. When used in this way, she says, it becomes more imperative than ever to retain a corporate university.

Ms Meister admits that some of the smaller corporate universities, especially within the US, have been disbanded as a direct result of the economic downturn. But she adds that, in many of these cases, the company's commitment to its corporate university was probably questionable to begin with.

"If it [a corporate university] was implemented as a fad, then the first time that things got tough those companies folded up the tent."

The essential aspect of a corporate university appears to be how it is valued and positioned within a company. If a corporate university is seen as a luxury, an add-on, then, in difficult times, it becomes an expensive optional extra.

According to Blair Sheppard, chief executive of Duke Corporate Education, the for-profit company spun off from Duke University's Fuqua School of Business, a corporate university has to be focused on responding to the real business issues of its company. "If education is seen as a strategic tool, then it is not a luxury but a solution to the business strategy." When viewed from this point of view, a corporate university adds value to its company, he says.

At Cranfield School of Management in the UK, director Leo Murray argues that despite any economic downturn or recession, astute companies will continue to invest in development and learning for their employees, otherwise they risk losing these assets. "Investment in training must be part of the overall company strategy not just an add-on that can be slashed in a budget