Public education in Dubai becomes more competitive alongside dominant private options

 

In a short time Dubai has established a vibrant education sector with an increasing variety of choice at all levels. While the private segment continues to dominate, recent reforms have seen major improvements to public sector schooling, modernising it and bringing it in line with international best practices. Inevitably, high rates of growth in the number of international schools and higher-education institutions have led to consolidation, gradually slowing expansion and creating greater barriers to entry for prospective players.

In general, however, there remain opportunities for investors with savvy value propositions attuned to ongoing shifts in market needs in Dubai and the broader region. Indeed, while education contributes relatively little to the emirate’s GDP – 0.7% in 2017 – the Dubai and UAE governments prioritise it as a key part of the continued evolution of the economy. Education takes its place alongside health, innovation, housing and community under the umbrella of social development, which received 33% of the emirate’s annual budget in both 2018 and 2019.

Structure & Oversight

A number of key strategy documents designed by the federal government guide education policy in the emirate, namely the Education 2020 Strategy, the UAE Vision 2021 and the National Strategy for Higher Education 2030. Education is also strongly implicated in plans for other sectors of the economy, such as the Dubai Industrial Strategy 2030, which underlines the importance of education in achieving goals that are related to innovation and developing knowledge-based skill sets.

The national agenda was launched in 2010 and has entered its final phase, covered by the Strategic Plan 2017-21. The plan calls for “a complete transformation” of the pre-existing education system, as well as an increase in preschool enrolment rates, and the inclusion of smart systems and devices as part of all classroom teaching methods. The Strategic Plan 2017-21 emphasises a number of focus areas, specifically inclusivity, excellence in leadership and efficiency, a culture of innovation, administrative transparency and the building of practical expertise attuned to the needs of the labour market. At the emirate level, this translates into policies such as the Dubai Inclusive Education Policy Framework, which intends to provide emirate-wide integrated services for those with impairments or disabilities.

A number of bodies govern education in Dubai. Public schools are regulated by the Ministry of Education (MoE), while private schools sector are regulated by the Knowledge and Human Development Authority (KHDA), which seeks to maintain education standards via its Dubai School Inspection Bureau (DSIB), as well as to develop education policies in line with international best practices. As part of efforts to increase administrative transparency around schooling, the results of the DSIB’s school visits are publicly available, giving parents insight into government quality metrics and incentivising yearly improvement by schools.

International schools looking to open in the emirate under an existing international school brand are subject to a number of specific regulatory stipulations. The KHDA requires the participation of the existing international school in the licensing process, regardless of whether they will have ownership of the Dubai school. The school’s governing body must also sign a board resolution ensuring its responsibility for a list of specific education matters, accepting that termination and closure of the Dubai school is subject to the approval of the KHDA, and that the school is responsible for settling financial disputes with parents and staff in the event of termination.

New Parameters

Part of the KHDA’s vision is to shift the parameters of education in accordance with the current and future labour market. It measures success according to metrics of health, happiness and emotional well-being in addition to academic achievement. In 2017 the KHDA announced a five-year well-being census programme in partnership with the government of South Australia. The results of the second year, which focus on pupils from grades six to 12, were released in February 2019. While showing positive indicators overall, they were nuanced by moderate declines across a number of domains, aligning with student well-being internationally. Schools are using summary reports of the students’ responses to engage with their school communities and take effective action to improve well-being.

The Emirates Schools Establishment (ESE) was founded in 2016 as an autonomous, semi-independent authority with the mandate to manage and operate public schools so as to advance the education sector according to the UAE’s strategic objectives. In April 2019 the UAE Cabinet approved the formation of a board of directors for the ESE, whose task will be to elaborate policies, strategies and standards relating to public sector education. In 2017 the federal government also introduced the pilot phase of the Teachers’ Licensing System (TLS), which will become a requirement throughout the country by the end of 2020. The system will strive to achieve uniformity of standards among all teachers employed in the UAE. To acquire the licence, teachers must pass two tests, one in pedagogy and one in their area of specialisation.

Sector Breakdown

Education in Dubai is divided between public and private at all levels, from K-12 to postgraduate. In general, the private sector is dominant, with increasing numbers of Emiratis choosing to join expatriates in private education. According to data from the MoE, there were 71 public schools in the Dubai educational zone during the 2017/18 academic year, as opposed to 191 private schools.

Public education is more dominant in other emirates where there has been less private school penetration; Abu Dhabi, Sharjah, Ras Al Khamaih and Al Ain all have more public schools than Dubai. Public education at the primary and secondary levels is reserved for Emirati students, so foreign students exclusively attend private schools, which tend to use curricula derived from international systems. Dubai’s education sector features a high level of national, ethnic and cultural diversity among both students and educators, with 15 national curricula being used around Dubai in the 2018/19 school year. Student enrolment in Dubai schools is concentrated at the primary level of education: in 2018, for instance, there were more students in the 6-10 age category (114,339) than there were in the 11-15 and 16-17 age categories combined (108,103). This reflects the prevalence of younger families in Dubai, with 6.29m of the country’s 9.6m people falling within the 25-54 age category.

Public Sector

Education is free and compulsory for all citizens under the constitution of the UAE, established in 1971. The UAE’s original public education system was designed by the MoE, drawing inspiration from the Egyptian and Kuwaiti curricula while also adding indigenous elements. Public schools in the emirate are segregated by gender and Arabic is the primary language of instruction, though English is taught as a second language and used for teaching technical or scientific subjects. All children in public and private education must begin kindergarten at age five, after which primary education runs for six years, followed by prep schools covering ages 12 to 15 and secondary education from 15 to 18.

Students in Dubai achieve higher grades than the UAE average in subject areas such as science, maths and reading, according to the OECD’s 2015 Programme for International Student Assessment. Since 2006 the federal government has been carrying out a series of education reform programmes. One of the major outcomes of this period was the 2017 introduction of the Emirati School Model, a new framework to apply the same standards of teaching, educational management and a revised curriculum to all public schools, as well as private ones following the national curriculum. The new school model – which had its first year of full implementation in 2018/19 – places greater emphasis on critical thinking skills, innovation, integration of technology, and striking a balance between academic and vocational learning objectives.

Private Sector

According to the latest KHDA report on the 2018/19 school year in private education, there were 289,195 students attending 209 schools, with 33,629 Emiratis accounting for just under 12% of the school population. The private school segment in Dubai has been steadily growing in the past decade, leading some analysts to forecast imminent market over-saturation. Since the 2015/16 school year, for example, the number of private schools has grown by around 20%, from 173 to 209, while the number of students has grown by 9%, from 265,299 to 289,195. Looking further back, in 2008/09, the first year of KHDA school inspections, there were just 143 private schools, equating to a 46% increase over 10 years.

The Dubai branch of real estate consultancy firm Knight Frank, in its 2018/19 survey of the emirate’s education sector, indicated that such growth rates were impacting profitability for potential investors. Indeed, because of this market correction, a number of education providers have chosen to offer fee discounts. At the same time, private education providers are having to work harder to attract students, with more providers investing in marketing in 2018, Knight Frank noted. In this environment, schools without well-calibrated value propositions have been the first to suffer. According to Knight Frank, schools situated in the middle-income communities of the emirate but priced towards the higher fee bracket, at Dh52, 000-83,000 ($14,200-22,600), were performing significantly worse than lower- and higher-priced schools. Occupancy among such schools stood at 69%, while occupancy in the most expensive 20% of the market was 77%, and occupancy for schools with fees below Dh52,000 ($14,200) was 84%.

Price Regulation 

While budgets at private schools are set by the schools themselves, the maximum fee increases that such schools are allowed to charge is limited according to the annual Education Cost Index (ECI), which takes into account teaching and administrative salaries, and utility expenses, among other items, as well as the school’s rating by the DSIB, which ranges from outstanding to weak. In the 2018/19 academic year DSIB inspectors found 17 schools in the emirate to be outstanding, 28 very good, 74 good, 52 acceptable and five weak. Overall, 18 schools improved on their results from the previous report, which was carried out during the 2017/18 school year. Standards have increased since the launch of the inspection programme, with only 30% of schools designated good or better in 2009 versus 70% in 2019.

While the cost index scheme has been effective at incentivising improved performance at schools and keeping prices in line with the quality of education, continually high-performing schools implementing successive price increases led to complaints of price inflation and the implementation of a fee freeze for the 2018/19 school year. In April 2019 it was announced that the price freeze would be lifted for the 2019/20 academic year. As a result, the 141 schools that maintained their rating in the latest KHDA school inspection report are eligible to raise their fees by 2.07% – the designated ECI rate in 2019.

The nine schools that improved their rating from weak to acceptable were allowed to raise their fees by twice that rate: 4.14%. Price regulation seeks to strike a balance between ensuring the affordability of education for parents and maintaining Dubai’s attractiveness as a destination for top international schools. Profits remain healthy in private education, with KHDA’s “Dubai Private Education Landscape 2017-18” report noting that private institutions were able to generate approximately Dh7.5bn ($2bn) in revenue in 2017/18, an increase of almost 10% compared to the previous year. The average fee was Dh26,865 ($7310) per year, although 53% of students paid less than Dh20,000 ($5540) annually. The average skews higher than the median due to small number of schools charging fees of Dh100,000 ($27,200).

Higher Education

Just as in private secondary education, the last decade has seen major growth in the number of tertiary institutions and students in Dubai. According to the KHDA, between 2008 and 2018 the number of students in higher-level education grew from 12,000 to almost 30,000. In 2019 the emirate was home to 35 higher-education institutions, 26 of which were international branch campuses located in free zones such as Dubai Knowledge Park, Dubai International Academic City and the Dubai International Financial Centre. The public segment consists of five higher-level institutions: Zayed University; Afraaz University; Dubai Medical College for Girls; Higher Colleges of Technology; and Emirates College for Management and Information Technology. The government supports higher education via the National Strategy for Higher Education 2030, launched in 2017, which backs up Dubai’s long-term plan of making the emirate a knowledge-based economy. In tertiary education, the National Strategy for Higher Education 2030 is looking to propel some of the country’s universities into the world’s top-100 rankings, encouraging innovation and collaborating with private sector companies. “An important trend that is currently under way in the UAE is that home-grown universities are improving their positions in international rankings,” Randa Bessiso, director for the Middle East at the University of Manchester, told OBG. “This is likely to result in more students, both Emirati nationals and foreign nationals, attending these universities.”

Specialisation

The most popular field of study at the tertiary level in Dubai is business administration, with 60% of students enrolled in business administration colleges, according to the emirate’s Department of Economic Development. Another 20% will be studying engineering. The percentage of students studying medicine and health disciplines is small, resulting in a shortage of local labour supply and a reliance on expatriates in these sectors (see Health chapter). Factors such as an increasing number of tertiary institutions and a more circumspect labour market are leading to growing demand for less-served subject areas, including fields such as maritime law, aviation, environmental sciences and nanotechnology. “Increasingly, the federal government is more demanding in terms of criteria for new institutions coming in. In order to get licensed and accredited, institutions have to show the authorities that they are of an appropriate reputation and that what they are offering is suitable for the market here,” Kevin Dunseath, regional director for MENA at City University of London, told OBG.

One of the long-running challenges facing Dubai’s higher education segment is the issue of parallel accreditation systems. Universities operating within Dubai tend either to be accredited by a federal body, the Committee for Academic Accreditation (CAA) of the MoE, or be given permission to operate within free zones by the KHDA. CAA accreditation means that students’ qualifications are legally required to be recognised throughout the seven emirates of the UAE.

Not all universities choose to seek CAA accreditation, however, due to stipulations such as the requirement that teaching staff be resident in the emirate, rather than fly-in fly-out. According to conversations with officials, KHDA and the MoE have a shared interest in resolving the issue of the recognition of awards from their respective jurisdictions. Furthermore, the two entities will continue to meet and discuss ways to effectively move the matter forward.

Attractiveness

In November 2018 the UAE government approved the implementation of a new fiveyear visa for students achieving outstanding levels of performance at either secondary or tertiary level. To qualify, secondary students must graduate with a grade of at least 95%, while university students must graduate with a grade point average of at least 3.75. Eligibility is extended to both local and international university students. Furthermore, specialised talents in the fields of science and knowledge are eligible for 10-year visas, provided they fulfil certain conditions, such as a PhD degree from one of the world’s top-500 universities or specialisation in areas of priority to the UAE. “The greatest source markets for international students continue to be in the MENA region,” Bessiso told OBG. “This is where Dubai presents a higher competitive edge. Many families in the GCC prefer that their children study in Dubai, not only because of its attractive job market, but also because of its proximity to their home countries.”

In the coming years such developments are expected to facilitate a continued increase in tertiary enrolment. Indeed, Dubai recently became the location with the most international branch campuses in the world, ahead of Singapore and Malaysia. “I think there are huge opportunities in Dubai’s higher education segment,” Sajida Shroff, CEO of Altamont Group, a boutique education investment and advisory firm, told OBG. “Not only does it cater to Dubai and the UAE, but it caters to a catchment area that is beyond the UAE: the GCC, Asia and Africa,” Shroff said. One of the trends in higher education is the increasing number of Chinese students enrolling in Dubai-based universities. In spring 2019 it was reported that the Dubai campus of Middlesex University had seen its Chinese student population numbers almost quadruple in three years, rising from 2% to 8%. The number of Chinese students at the University of Birmingham’s Dubai campus, meanwhile, stood at 15%.

Outlook

While Dubai’s education sector is a more challenging environment for investors than in previous periods, opportunities remain for quality products at well-gauged price points. The K-12 market correction is leading schools to focus on their USP and differentiate themselves from competitors. Being less tied to local demographics, higher education is a more dynamic space with a brighter outlook. Promising initiatives like the UAE government’s increasingly favourable visa regulations towards incoming students and researchers only add to Dubai’s potential as one of the main educational destinations in the region.

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The Report: Dubai 2020

Education chapter from The Report: Dubai 2020

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