Assistant boss Giggs hoped to succeed Louis van Gaal but Red Devils chiefs have turned to Jose Mourinho.
But former United team-mate Peter Schmeichel believes he needs to prove his credentials at another club.
"It depends on what Ryan's ambitions are," Schmeichel said.
“I would like to see him go away and come back some day prepared for the challenge”Peter Schmeichel
"I think there are two sides - the club side and Ryan's side.
"I think Ryan's big dream is to one day manage Manchester United.
"I think to be equipped for that he has to go away, he has to manage other clubs, standing on his own two feet, making decisions, producing results, getting his own ideas in rather than step up from being assistant to manager.
"I would like to see him go away and come back some day prepared for the challenge.
"We have seen that in the last three years of Manchester United it is a hard job to be the manager there.
"It's not something you just step up and do.
"You've got to have so many qualities and abilities and you only gain that by experience."