K-12 Education Market in the UAE

In my last blog I discussed the expansion of higher education institutions in The United Arab Emirates. This entry will present a background piece on expansion in the UAE K-12 education market, opportunities and challenges.

What do the Numbers Say?

 The most recent UAE population reports state that the UAE has a population, according to the National Bureau of Statistics, is 8.2 million at the end of 2011. The breakdown consists of:

  • 1 million UAE Nationals and the expats from: 
  • 1.7 million from India,
  • 1.2 million from Pakistan
  • 700,000 the Philippines
  • 600,000 Bangladesh
  • 400,000 Iranians
  • 300,000 Egyptians
  • 300,000 from Sri Lanka
  • 300,00 from Afghanistan
  • 300,000 from Indonesia
  • 250,000 Jordan
  • 250,000 British
  • 150,000 Lebanon
  • 125,000 from Nepal,
  • 100,000 South Africans
  • 50,000 + from the US and Canada

In the budget for the fiscal year 2010, the education sector consisted of about 23% (Dh 10 billion or $2.7 billion US) of the total national budget of Dh 43.6 billion according to Mr. Ahmed Mohammed Al Midfa, Chairman of the Sharjah Chamber of Commerce and Industry. 

K-12 Marketplace

More than 2,000 schools operate in the UAE, with the private sector quickly growing. The private schools are a major business generating over $1 billion US dollars in tuition. So a question to be asked is where does the tuition payments come from? If you say the government or employers pay for everything you are in for a surprise. 

In a May 4th 2013 story in The National, WhichSchoolAdvisor.com reported its survey results. A key finding stated: “Almost one in five families spends more than 30 percent of their household income on school fees. The survey with 596 responses revealed 62 per cent of respondents cover the entire cost of their children’s school. 24 percent receive a contribution from their company and 13 percent have their school fees paid in full.

When asked whether the school fees paid represent ‘good value for the quality of school offering the results were:

  • 54 per cent of those who have fees paid think those fees represent ‘good value’
  • 27 per cent of those who pay in full themselves think those fees represent ‘good value’. 

In spite of the cost constraints on parent’s budget, more than six in ten parents surveyed would recommend the school their children attend to other parents. However just 49 per cent of parents at Indian schools would do so. The most important criteria to parents is not the cost by rather the ‘Qualifications of Teachers’ followed by ‘Choice of Curricula’.

Numerous companies are establishing schools in the UAE.  Example, of the 148 private schools in Dubai, 116 are for-profit and the other 32 operate on a not-for-profit or non-commercial basis. GEMS education is the for-profit market leader and their 19 schools in Dubai which captures 25% of the private school students.

It is not just the growth in Dubai the UAE is experiencing. Investors stated at a recent education forum in Abu Dhabi their plans to build their schools in remote areas of Abu Dhabi, Al Ain, and the Western Region. GEMS, which owns four schools in Abu Dhabi as well as its holdings in Dubai, plans to open seven additional schools across the Emirate for 30,000 students. It is also important to note that companies like GEMS are offering parents diverse schools (Indian, International, American etc.) and programs which will meet the needs of multinational population. In addition for profit schools can generate other high margin revenue for transportation, books, food, and facilities.

Where is the UAE K-12 Headed?

The for profit education companies believe the market is underserved and with a growing population the education market will expand for the foreseeable future. The data supports the view that expansion will be successful assuming tuition increases do not outpace the employee and employers ability to pay.

However a major stumbling block is the recruitment of teachers with proper qualifications. If parents determine the teachers aren’t worth the cost of tuition they may well look at alternative methods.  In an upcoming blog I will discuss the difficulty in recruiting teachers from the UAE, Middle East and the West.   

Sources: The National April/May 2013, UAE National Bureau of Statistics, and ICEF Monitor Country Snapshot UAE February 2013 

Is the UAE the New Higher Education Destination Hotspot?

It has been quite some time since I posted a blog entry on Hoke’s Notes, in fact since 2011, so why am I writing now?  What seems to have motivated me is an increasing interest to comment on the evolution of education partiularily higher education, throughout the Middle East and what is happening in the UAE . In addition I now have additional outlets to post the blog through my social media sites including www.deanhoke.com.

My wife and I have lived in Abu Dhabi since February 2009 and are working in the higher education sector. I have been fortunate enough to get to know many of the UAE institutions faculty and staff over these years and the education and research community in the GCC and Middle East. Where I am going to take this blog in the upcoming months is to report and comment on education in the Middle East.

Is the UAE the New Higher Education Destination Hotspot?

In a recently published study by Deloitte commissioned by the Dubai Knowledge and Human Development Authority, the UAE was named by 7% the 2,500 students surveyed as their preferred education destination. The students who responded were from 17 Middle East and Asian countries. Ranking ahead of the UAE were the US at 27%, the United Kingdom at 20% and Canada at 14%.

Deloitte, which conducted the study in conjunction with TECOM Investments’ Education Cluster stated, “Significantly, the UAE scored higher than other emerging education hubs in students’ estimation of their preferred destination for higher education and is perceived to be the most attractive destination for higher education in the region.”

The United Arab Emirates has about 100 post secondary institutions spread throughout the Emirates but with the largest concentrations in Dubai followed by Abu Dhabi. In terms of population, an estimated 8 million people live in the UAE of which 1 million are UAE Nationals.  Almost all higher education institutions teach in English.  Throughout the UAE, an estimated 125,000 students are enrolled in these 102 schools, which means the remaining emirates have 49 institutions with 77,000 enrollments and Dubai has 53 schools with 48,000 enrolled. Dubai has captured 52% of the total number of institutions and approximately 38% of the overall students. In the Dubai area, Emirati students make up the largest group 20,640 (43%), followed by Asian students (21%). Compared to 2011, there have been substantial increases in the numbers of African and Arab students according to the Knowledge and Human Development Authority. According to the UAE National Bureau of Statistics, 27,909 Emirati students graduated in the 2010-2011 UAE academic year, leaving the opportunity for international universities and vocational training institutes with solid English language preparatory programs and targeted programs to gain in enrollment.

When I arrived in the UAE in 2009 it appeared that the expansion of schools would slow down due to the failures of George Mason University in Ras al-Khaimah (RAK) which was taken over by American University in RAK and Michigan State University which has 30 students left. However the Dubai region has seen significant growth and Abu Dhabi is growing at a slower pace due to its more conservative policy in permitting new sites.

Why do Middle East/Asian students rank the UAE as the 4th most desirable region to go to school and #1 outside of the UK and North America? First the TECOM, which runs Dubai Academic Village and Dubai Knowledge Village, has been aggressively marketing to potential international university suitors who want to expand its schools in the region. TECOM has a solid infrastructure in place and a clear vision of who they are and what they can provide. A second reason may well be that a rival such as Qatar is not the market for branch campuses but rather universities with strong brand names who will set-up focused programs such as diplomacy, journalism, engineering, etc.  That explains why universities will establish branch campuses in the UAE but the question remain why will students come to the UAE. You could take the view “if you build it, they will come” but it doesn’t always work as in the cases of George Mason or Michigan State.

I believe the primarily reason why students and parents with financial means would turn to the UAE over other parts in the non English speaking world is they will be safe. War is neither breaking out, nor Arab Spring and revolts as we seen in Egypt, Libya, Morocco Bahrain and countless other nations. It’s a vibrant area where you can enjoy the student experience. Students want to go to places where its exciting, meet new people, develop contacts and learn.

Its reasonable to assume the area while not prefect, is stable and tolerant. It has a diverse population, with many countries represented and a wide choice of schools to attend. I am not necessarily saying they are all “world class schools” that I will write about in a future blog. They have a well-established UAE accreditation body under the Higher Education Ministry of which 78 schools are approved, as well as the Dubai Knowledge and Human Development Authority, which does its own evaluation.

The UAE and in particular Dubai has positioned itself as a destination market similar to what India has done in the field of medical tourism. It’s an exciting marketplace where you can recruit UAE Nationals, the children of expats and attract high school graduates in other Middle Eastern nations, as well as Asia and Africa. The parents and the child can keep close to home, gain a decent education and most importantly, keep safe.

 I invite your comments and opinions. Let me know what your thinking.

 PS: To all horse racing fans, Happy Derby Day!