From strength to strength: Developing a strong foundation to build a knowledge-based economy

Dubai has built a unique education system to fit its population’s needs by harnessing the capacity of the private sector, while also continuing to develop a more sophisticated regulatory framework to ensure every school is delivering quality education.

Private schools outnumber public institutions in the emirate, providing education to 225,009 students, representing 88.7% of Dubai’s school-aged children, as per data published by the Knowledge and Human Development Authority (KHDA), a government institution tasked with regulating the local education system. This marks a year-on-year (y-o-y) increase of 8.7% from the 207,118 recorded in 2011. In total, Dubai is home to 153 private schools using 15 different curricula from around the world.

Higher education is similarly unusual, with reliance on private institutions and the free market. The local government has made increasing efforts to become an international centre for quality education, and has built two dedicated free zones (FZs) that were home to 32 private universities and more than 22,000 students at year-end 2012. The market-based approach to education has created some regulatory challenges, but it has also allowed for a high level of flexibility that enables the emirate to adapt to changes in demand, which has proven to be an advantage in an increasingly global and competitive sector.

Regulatory Structure

 The government has created separate bodies, each with its own set of regulations, to oversee the different types of institutions in the emirate. While the federal Ministry of Education (MoE) and Ministry of Higher Education and Scientific Research (MoHESR) are responsible for overseeing all public and some private education throughout the UAE, the KHDA’s mandate is to ensure quality private education in all schools and universities, through school inspections that are conducted and published annually and a quality assurance framework for higher education through its University Quality Assurance International Board (UQAIB).

Private Schools

Accounting for a significant proportion of education facilities in Dubai, private schools had total revenues of $1.12bn in 2012, and employed 14,333 teachers. While the main focus of private schools is on foreign-born students – non-Arab expatriate students do not have the option to attend public schools – 56.6% of Emirati students also attended a private school in 2012. Of the 15 different curricula, the most popular schools follow a UK, Indian or US system of education.

GEMS Education, a Dubai-based international education group, runs several of the largest schools in the emirate and has more than 55,000 students across 19 different institutions. In addition, five private schools – Our Own English High School, the New Indian School, the National Charity School, the Kindergarten Starters and the Indian High School – each have more than 5000 students enrolled.

While private schools are free to choose what curriculum they would like to follow, the KHDA, through the Dubai Schools Inspection Bureau (DSIB), has conducted annual inspections and ratings for the last five years. The DSIB uses a four-point rating system of “outstanding”, “good”, “acceptable” and “unsatisfactory”. In addition to making its ratings publicly available, the KHDA must also approve any increase in tuition fees and creates extra incentives for schools to maintain a high ranking by using them as a major factor in the tuition hike adjudication process.

Since the first inspections in the 2008/09 school year, the ratings have, on average, risen steadily. UK, US, International Baccalaureate (IB) and French schools have registered the most gains over the last five years, while those following the MoE curriculum showed less rapid improvement. According to the last inspection report, the most frequent rating was “acceptable”, which was awarded to 67 schools, up from 54 in 2008/09. Some 51 schools now offer a “good” education, up from 34 five years ago, while schools with an “outstanding” rating increased from four to 12, and schools with an “unsatisfactory” rating were down to 13 from 17. But while the overall quality of education does seem to be improving in the emirate, recent inspections reveal that Arabic and mathematics have more room for improvement, and that external monitoring and evaluation as well as strategic planning could be stronger in many schools.

Over the past decade, enrolment in private schools has grown by an average annual rate of 7.3%, and 34 schools have opened their doors in the last five years alone. Still, the overall capacity of private schools sits at 89.5%, leaving limited room to take on additional students without expanding.

KHDA officials have said that they expect expansion to continue at a similar rate over the next few years. They also project that Dubai will need room for 90,000 new students over the next five years and require an estimated 60 new or expanded schools to meet that demand. In fact, when you look at the number of students in each grade, you see that the vast majority are in the younger years, and even if new enrolment remains flat, there will be a need for more seats. According to Sunny Varkey, chairman of GEMS Education, quality remains a key factor too. “Private education is a very competitive industry in Dubai, and the fact that there are significant waiting lists and demand for the best schools says more about the quality of those schools than anything else. Thanks to KHDA inspections and a growing body of evidence on education outcomes, parents are now much more empowered to determine which are the best-performing schools,” he told OBG.

International Assessements

 The OECD’s “Programme for International Student Assessment (PISA)” report from 2012 – an educational performance assessment of 63 countries throughout the world – ranked Dubai higher than every Arab country, though it still came in slightly behind the OECD average in mathematics, reading, and science. Abdulla Al Karam, chairman and director-general of the KHDA, noted recent progress and the ongoing effort to reach international benchmarks. Overall, the numbers represent a step in the right direction, he said.

Perhaps more important than the overall rankings, however, was that each subject area has enjoyed robust growth since the last assessment in 2009, indicating that standards continue to rise even with the rapid expansion of schools and enrolment.

While Dubai did not score as highly as a number of Asian and European competitors, students from IB and UK curricula did in fact achieve strong results internationally, mirroring and validating the findings of the KHDA’s internal reports, which put these schools at the top of the class. Pupils in UK-curriculum schools averaged between 510 and 526 on the different subjects measured, while IB students had similar average scores, ranging between 517 and 527. Students attending schools using the Pakistani curriculum have the most room for improvement, with average scores from 313 to 336.

The PISA assessment also highlighted that 85% of Dubai’s students reported being happy, which surpassed the world average of 80% and placed the emirate second in the rankings, behind only Jordan.

Reforms Ahead

Though the PISA results showed that there are parts of the emirate’s education system that truly excel, it also highlighted areas where there is still room for improvement.

In an effort to continue the advancement of the education system as a whole, several key reforms have been announced. One of the most visible changes will be the elimination of the foundation year at public federal universities, which had until this point been in place to fill gaps in basic knowledge and skills and ensure that students were prepared for university-level studies. Now, however, secondary schools will be expected to graduate students ready for university directly. In addition, students will no longer be required to decide between arts and science tracks early in secondary schools that follow the UAE curriculum. New incentives for teachers will also be put in place, along with a new licensing scheme resembling many Western countries. While universities were largely left out of the proposed changes, a new evaluation and ranking system is due to be installed throughout the UAE.

Speaking about the changes to come, Al Karam said, “There will be a systematic change and it will have a positive impact on Dubai. It will be a momentum boost, and everybody is working to make the system better. What is important about the decisions taken is the strong support and drive shown by the top leadership in improving education and health care.”

Costs

Tuition fees at private schools in Dubai are a significant expense for many families, with an average cost of Dh18,196 ($4953) per year, according to the KHDA. Fees have risen by some 6% y-o-y from 2011. However, looking just at the average cost hides an array of private schools that have affordable prices for nearly any family budget. There are six tuition-free schools and several others that charge less than Dh2000 ($544) a year.

Grade 12 is currently the most expensive stage of private schooling. Costs reach up to Dh96,140 ($26,169) in certain schools and schools are permitted to adjust fees each year in line with the fee framework. Public schooling for Emirati children is free and the federal budget for 2013 included a significant budget for education.

As all tuition fees for established private schools are regulated by the KHDA, future costs will largely be held in check, although new schools are exempt from this regulation and are free to set their own fees. This is significant, and it means that the growing need for new schools resulting from the rising population of school-aged children in the emirate has the potential to exert some upward pressure on tuition fees, especially for the curricula that are in the highest demand, such as UK and IB schools.

Higher Education

As of the end of 2012, Dubai was home to 53 institutions of higher education and an enrolment of approximately 48,000 students, which represents an 11% overall increase on the 43,212 registered at the end of 2011.

Functionally, the institutions can be divided into three distinct groups: federal; private institutions in a FZ; and private institutions outside of a FZ. Private institutions outside of the FZs must be accredited by the MoHESR, while the private universities within the FZs fall under the jurisdiction of the KHDA. Private universities in FZs can either be accredited by the MoHESR or they are branch campuses of universities established and accredited in another country, and come under the quality assurance framework of the KHDA. The significant majority (60%) of institutions operate within FZs, while federal universities account for 6% and private institutions outside FZs make up the remaining 34%.

Just over two-thirds of all higher education students in Dubai in 2012 were enrolled as bachelor’s students, and the most popular programmes, by far, were business degrees. There were many information technology and engineering courses on offer as well, but so far, the percentage of students enrolled in those programmes remain in the single digits.

Emirati students comprise 43% of all students currently enrolled in higher education, while Asians were the second-largest group and made up 21%. Elsewhere, there has been a significant rise in the number of African and Arab students.

Much of the growth in the sector over the last decade has been a result of attracting resident students who would have left the emirate previously. However, officials and institutions must begin to focus more on attracting international students. Indeed, education officials realise this and have led delegations during the past year to China, Russia, Kazakhstan and elsewhere to promote Dubai as an international education hub.

According to Nitin Anand, chair of the Executive Council and director at Sharjah-based Skyline University College, “Dubai needs to increase the internationalisation process of the education system by brokering a more proactive approach to partnerships with other countries in the region,” he told OBG. Compared to other international options for higher education, most institutions in Dubai fit a niche below top-tier schools, but above an average local education. Another issue that the emirate must contend with is that unlike Qatar or Saudi Arabia, where the state has many scholarship programmes for top international students, the overwhelming majority of students who come to Dubai to study must pay the full tuition fees, along with other costs. As Abdurahem Mohammed Al Ameen, president of Al Ghurair University, told OBG, “The long-term viability of the private higher education sector relies primarily, of course, on the quality of the education, but also on the cost-value proposition.”

The tuition fees for each university vary, but the overall trend has been upward in recent years, and Dh35,000 ($9527) per year for a bachelor’s programme is not outside the norm. While there is some debate over what has been causing the price increases in recent years, the cost of attracting professors as well as rent and facility expenses are playing a key role. At least so far, however, the cost increase has not impacted demand, and the government has given no indications that it plans to regulate tuition fees at private higher education institutions.

Warren Fox, executive director for higher education at the KHDA, said, “We do not monitor fees as this is regulated by the market forces; however, we require that institutions to list their fees with the KHDA so that they can be published on the KHDA website. Unlike schooling, higher education is not mandatory and is decided upon by the consumer.”

Developing a Nich

Due in part to the privatised nature of higher education in Dubai, higher-level research programmes that require more upfront investments are not currently in high demand from prospective students.

This is true for fields that require more infrastructure and coordination than others. Health care education, for example, is severely limited because of a lack of space for research and practical experience. The government has taken up this problem and recently opened the Mohammed bin Rashid Academic Medical Centre in Dubai Medical City (DMC). Nonetheless, the larger issue of how to develop serious scholarship remains an open question, and one which must be addressed if higher education in Dubai is to be recognised globally.

Vocational and education training as an alternative to university is still largely underdeveloped in the emirate and has so far relied heavily on government-backed initiatives. With high unemployment rates and a significant number of male Emirati students failing to finish their secondary education, this could become an increasingly important part of the education sector if institutions are able to successfully attract this demographic.

Vocational and further education programmes designed for working professionals, however, are numerous and in high demand. Targeting most segments of the workforce, programmes on offer range from master’s of business administration to shorter certificate courses. Private institutions are very active in this part of the sector and there is a dedicated FZ for these training institutes.

Regionally Focused Programmes

 In an attempt to add to the traditional degree options that already exist in the emirate, efforts are being made by public officials, private companies and universities to expand into areas of study that are in high demand regionally and locally.

As part of a wider effort to develop Islamic finance in the emirate, officials have been coordinating with universities and finance groups to ensure that the education system can supply the skilled labour force that will be required by this expansion.

Emirates Islamic (EI), a leading finance institution in Dubai, has embraced the partnership with students, and in 2013 the company launched an initiative called “Innovation Challenge”, whereby students compete to develop new ways to incorporate social media into the sector. Jamal bin Ghalaita, the CEO of EI, told local media, “By reaching out to teams of highly motivated and talented students from the best universities in our country, we hope to tap into the new wave of thinking and development in this very important space.”

Participation in the initiative has been high, with student groups from Heriot-Watt University, the American University of Sharjah, S P Jain School of Global Management, Birla Institute of Technology and Science Pilani in Dubai, University of Wollongong in Dubai and Middlesex University all participating.

One challenge to expanding Islamic finance programmes is the regulation for any degree offered at a branch campus in Dubai to also be available at the home campus of that university.

In the past, this has effectively barred many institutions from developing Islamic finance programmes, and has limited growth so far. In response, a change in regulation has already been implemented by the KHDA. With the latest version of UQAIB, institutions are now able to introduce regionally focused programmes, such as Islamic finance, that are not offered at the home campus, and have these programmes quality assured by the regulator.

Expo 2020

One significant development likely to alter the education landscape is Expo 2020, which was awarded to Dubai on November 27, 2013. The investments needed in order to successfully host the event will benefit all parts of the economy, education included, with some estimates putting the number of jobs created by the event at more than 270,000. Not only will the time leading up to the Expo create more opportunities for graduates, but the publicity that comes along with the event should only enhance international students’ view of the emirate as a centre for business and a potential destination for higher education.

Certain course programmes should also excel in the run up to 2020. William O’Brien, president of the American College of Dubai, said, “This is good news for all sectors of the Dubai economy — and education will most certainly be a major beneficiary. Our evening programme for working students should do particularly well as people seek to upgrade their skills in preparation for the Expo, which will open up more employment opportunities.”

Staffing

Many private schools and universities in the emirate rely largely on expatriates for faculty and teaching roles. While this has led to a highly skilled workforce, it can be one of the largest costs for institutions in Dubai as well, with some private school teachers paid more than Dh14,000 ($3811) a month, in addition to benefit packages which often include housing. According to Varkey, “The cost of talent attraction and retention in education is significant in Dubai, with employee salaries expected to rise by 3-5% per annum,” he told OBG. “Schools in Dubai are not just competing with each other for quality teachers, but also with institutions in other countries that rely heavily on foreign educators. Many schools in places such as China and Korea may in fact offer higher salaries, and there is no guarantee that personnel costs will not continue to rise in the future. We hope the new licensing and incentive structures proposed by the UAE Cabinet in late 2013 will positively impact our competitiveness with other international hubs,” he said.

Free Zones

Almost all of the private universities in the emirate are located in TECOM’s education cluster’s two FZs: Dubai International Academic City (DIAC) and Dubai Knowledge Village (DKV). TECOM itself is part of Dubai Holding and is an international company focused on the development of knowledge industries and business growth.

DIAC is a key centre for university education and is home to 25 academic institutions and over 20,000 students from 125 different countries. The FZ is designed around several incubator buildings, where institutions can locate initially before expanding or building their own campuses. DKV, meanwhile, is geared towards vocational training and further education such as human resources, tourism and hospitality, and other services in high demand.

Being located next to Dubai Internet City and Dubai Media City makes it an attractive option for companies looking to provide training to their staff. It also is home to the first US-focused master of law programme in Dubai, from Michigan State University. Taken together, this variety allows DKV to serve a client base that ranges from high-paid expatriates who are looking to improve their career prospects, to younger students seeking to work in one of the many hotels or resorts in the region.

In addition, there are also industry-specific education institutions housed in other FZs across the emirate. Dubai Health Care City has been especially active in introducing education onto its grounds, recently adding a new dental university and celebrating the completion of the Mohammed bin Rashid Academic Medical Centre. The finance-focused Jumeirah Lakes Towers FZ has also opened its doors to university programmes, and is now the site of one of the newest branch campuses in the emirate, Russian-based Synergy University.

Regulatory Hurdels

Growth in higher education has been, for the most part, continuous since the opening of the FZs and through the maturation of the KHDA. Nevertheless, there are still a few key regulatory issues that are limiting the sector’s further development.

Currently, anyone on a student visa in the UAE is, under law, prohibited from entering paid employment, a rule which has limited the opportunities for students that wish to study in Dubai. There are some employers which have set up unpaid internship programmes with universities – and in fact there are some universities that require them. At the same time, many students lack the financial resources to undertake an unpaid internship.

Institutions that operate within the FZs have also had difficulty attracting students from other Gulf states because these universities are not able to offer a degree recognised by the UAE, only the KHDA. This is important, as in order to be hired by a government in the region – some of the most desired employers for many students – they must have a state-accredited degree.

In 2011, the Dubai government began to officially recognise these degrees as one of the requirements of UQAIB. The academic qualifications issued by these institutions are issued by the home campus, and therefore carry with them the same international recognition as any other student who graduates from the home campus.

Addressing Skills Gaps

 The government took an important step in 2013 towards developing a stronger understanding of student and employer demand within the higher education system by commissioning an independent study titled “DIAC’s Regional Workforce Study 2013: A Skills Gap Analysis”, which was carried out by Deloitte.

The report focused on skill gaps in the region and perceived strengths of higher education in Dubai, with the research ranking Dubai above other emerging education markets, such as Singapore and Malaysia, as a foreign student’s preferred destination for higher education. The report also discovered that the most positive view of Dubai’s universities comes from South Asian populations.

Approximately 60% of surveyed employers in the region viewed Dubai’s higher education as being either “good” or “excellent”, a strong selling point for attracting prospective students. Notwithstanding, “More flexibility in the accreditation process for new higher education programmes could help keep curriculum better in tune with the demands of the labour market,” Anand told OBG.

Popular fields of study included accounting and finance, management, economics, sciences and tourism. Connecting education to the needs of the workforce was identified by the study as one challenge for the emirate, pointing towards factors including the transient nature of the population and a lack of coordinated effort to date.

The report also recommended a stronger centralised government agency, as well as more informal networks of employers and educators. The study did make its own assessment of the workforce demands, however, and found that – with the exception of sciences and tourism – hiring has been relatively flat in the region. After considering educational gaps and employer demand, the report suggested that energy, construction, health care, education and logistics are some of the areas that could be successfully targeted with investment.

Outlook

Private schools in Dubai play a key role in building a knowledge-based economy, as well as convincing qualified expatriates with families to move to the emirate. Growth has been strong and steady, and if projections are correct, there will be a need for continued investments in the development of new schools and the expansion of existing ones in the near and medium term. Costs have become a concern for many families, but this is mitigated by a choice of schools at different price points.

Higher education in Dubai is currently at a crossroads. Through dedicated FZs and a flexible system that allows branch campuses to open with few hurdles, getting a degree in Dubai has become an attractive option for residents of the UAE and for some international students as well.

The next phase of the sector’s ongoing development will most likely rely on attracting a higher number of international students. That, in turn, will mean competing against the other global education

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The Report: Dubai 2014

Education chapter from The Report: Dubai 2014

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