Part of this is due to the increased career-orientation of higher education. A century ago, someone could start in the mailroom and gradually learn how a company worked; maybe at some point they would take a night course in accounting or some similar business skill, but the vast majority of what senior management needed to know was learned from experience -- and experience at that company in particular.

Now business undergraduate students don't just sit in classrooms learning about accounting practices and labour law; they're expected to study existing business, take co-op positions, and otherwise gain "real world" experience. A student graduating from a 4 year Undergraduate business program should know far more about business than someone who started in the mailroom 10 years ago.

Meanwhile the other side of business schools -- research -- has also acted to reduce the advantage of gaining experience at any specific business. Researchers study successful businesses, learn what works, publish papers... and eventually teach it to their students. Whereas a century ago, businesses fundamentally did things in different ways, most large businesses follow the same general approaches to things, because those are what the PhDs say are the best ways of running a business. As a side effect, the experience someone gains in one company becomes far more transferable to another; for all that companies talk about getting "fresh ideas" from external hires, external hiring has increased because external hires are now less fresh than they used to be.