Investment from Dubai's government and private providers striving to accommodate growing demand for education

As Dubai seeks to play an increasingly influential role on the world economic stage, high-quality private education is seen as one of the pillars on which the emirate’s future prosperity will be built. Dubai recognises that if it wishes to attract the best workers in the world, many of those skilled staff will expect to find world-class education for their children. The emirate estimates that the number of kids attending private schools in Dubai will double from 183,000 in 2010 to 366,000 in 2020.

That means the private education system will have to cater to more than 20,000 extra pupils each year in the next half-decade. In September 2014, 11 new private schools opened in Dubai, the highest number of new schools in any year in the emirate’s history, while an estimated 81 private schools will open by 2020. Though this provides exciting opportunities for education providers, the emirate is making it clear it expects to see improving academic standards alongside growing pupil numbers.

Indeed, the government sets tough standards and ambitious targets for education, while encouraging the private sector to provide suitably qualified staff and facilities. The emirate’s higher education sector is served by 57 institutions with a mix of state-funded federal, locally accredited private and internationally accredited branch campus universities.

State Of The Sector

In October 2014, the UAE’s federal government announced a budget for 2015 that included almost Dh4.86bn ($1.32bn) to the Ministry of Education (MoE) according to al, a UAE daily. School is compulsory in Dubai from kindergarten through to year 12 and is divided into four stages: kindergarten, primary, middle and high schools. There are 77 state schools in the emirate and 169 private schools.

After completing high school, Emirati students can enrol on foundation courses to bridge the gap between secondary education and university, or go straight into degree and diploma programmes. At the university level, suitably qualified Emiratis can take up free places at UAE federal universities, or opt to attend private universities.

Overall, nine out of 10 children in Dubai attend private fee-paying schools. There is no alternative for expatriate parents, but growing numbers of Emirati parents are also paying for private education rather than sending their children to the state’s free schools.

PISA & TIMSS

In spring 2015, 15-year-old pupils in dozens of countries across the world will sit the Programme for International Student Assessment (PISA) tests, while fourth- and eighth-graders ( usually nine- and 13-year-olds) will have Trends in International Mathematics and Science Study (TIMSS) assessments, both of which produce global comparisons in maths, science and, in the case of PISA, reading. While the results, due out in 2016, will likely provide interesting reading for educators in many countries, UAE teachers will be paying particular attention. TIMSS data is collected every four years and PISA tests are conducted every three years, and the UAE’s government has said it expects to see its schools in the top 15 globally in TIMSS and the top 20 in the world in PISA by 2021.

Competitive Edge

The language used in official literature on Dubai’s education sector reflects this drive for success and clearly charts education’s role in helping the UAE achieve enhanced global status in the years ahead. Data on the past, and future, growth of Dubai’s fee-paying schools, and total numbers of pupils being privately educated, are brought together with the UAE’s ranking in the World Economic Forum’s (WEF’s) “Global Competitiveness Index”. The information is provided by Dubai’s Knowledge and Human Development Authority (KHDA), a government body tasked with regulating private schools and universities located in the emirate’s free zones. It shows that in 2010, Dubai was privately educating 183,000 children in 148 schools. In that year the UAE was ranked 25th in the WEF’s Global Competitiveness Index. By 2014, 243,715 pupils were being educated in 169 private schools in the emirate and the UAE had jumped to 12th place in the WEF index. The UAE’s stated ambition is to occupy a top-10 place in the index by 2020, by which time Dubai expects to have 250 private schools. A KHDA document released in September 2014, titled “A New Era of Competitiveness for Dubai’s Private Schools” states, “The continued strength of Dubai’s economy is encouraging more professionals to relocate and build the population. For working parents, the availability of high-quality education for their children is an essential component of deciding to move to Dubai. Facilitated by KHDA, the establishment of new schools means that the needs of current and future Dubai residents can be met.”

Curriculum Choices

The establishment of new schools also gives parents a greater choice of curriculum. According to KHDA, 15 of the 21 new schools opened since 2013, including more than half of the new schools opened since 2007, offer a range of international approaches to education. In early 2014, parents could choose from 15 different curricula, which increased to 16 when a Canadian curriculum school opened in September. KHDA data uses PISA and TIMSS results to allow parents to compare the performance of schools offering seven popular curricula: the International Baccalaureate (IB), UK, US, India, Philippines, Pakistan and the UAE’s own MoE private schools. For the 2012 PISA tests, the UAE set a National Agenda target of 520 points for mathematics, reading and science. IB schools came closest with scores of 517 for maths, 526 for reading and 527 for science, followed by UK curriculum schools with scores of 510 for maths, 510 for reading and 526 for science. Schools following the Indian, US and Philippine systems were ranked third, fourth and fifth, respectively, based on the scores.

At the other end of the spectrum, MoE private schools had scores of 417 for maths, 434 for reading and 431 for science, while Pakistani schools scored 326 for maths, 313 for reading and 326 for science. The ranking, based on the 2011 TIMSS scores for children in grades four and eight, showed IB, UK and Indian schools in first, second and third place. Schools from the Philippines beat US curriculum schools, which were ranked fifth ahead of MoE and Pakistani schools. IB schools exceeded the UAE National Targets in both grades, with UK schools achieving the goal in grade eight and missing by a few marks in grade four. Schools following other curricula missed the goal at both grades.

School Inspections

In addition to performance in these international assessments, private schools in Dubai are also subject to annual visits and assessment by KHDA’s Dubai Schools Inspection Bureau (DSIB). DSIB inspectors may deem a school to be outstanding, good, acceptable or unsatisfactory, based on certain criteria that include learning skills, teaching for effective learning, assessment, leadership, self-evaluation and partnership with the community and parents. KHDA data comparing inspectors’ reports from 2008/09 to 2013/14 show a higher proportion of schools classed as outstanding or good against all these criteria and a corresponding fall in the proportion of schools found to be acceptable or unsatisfactory. At subject level, the proportion of schools found to be unsatisfactory in teaching of Islamic education, English, mathematics, science, Arabic as a first language and Arabic as an additional language fell across the board. The proportion of schools found to be good or outstanding also rose in all but two subject areas, namely the teaching of Arabic as a first language and the teaching of Arabic as an additional language. Overall, the number of schools judged to be outstanding rose from four to 12, the number of schools deemed to be good rose from 34 to 57 and the number found to be acceptable rose from 54 to 64. The number of schools found to be unsatisfactory fell from 17 to eight. When DSIB published the results of its inspections in April 2014, it revealed that more than 89% of pupils in Dubai were being educated at private schools, with 243,715 students enrolled in 2013/14, an 8% increase on the previous year. “We encourage all parents to read the school reports in full,” said Jameela Al Muhairi, chief of DSIB at KHDA. “Parents should be fully informed of the strengths and weaknesses of their child’s school and have a comprehensive understanding of its progress over the past year.” In August 2014, DSIB announced its next set of school inspections would focus on performance in maths and science as schools prepare to enter their pupils for TIMSS and PISA assessments. Rigorous inspection of school performance, and the subsequent publication of results, means that even in an expanding market, parents can make informed choices. “It is competitive here between schools,” Simon O’Connor, principal and CEO of Jumeirah College, one of the GEMS network of schools, told OBG.

Diversity

KHDA data for 2013/14 shows there were students from 184 nationalities in Dubai’s private schools. The total number of Emirati students in private schools in 2013/14 increased to 30,994, a rise of 3.2% on the previous year. It also made Emiratis the second-largest nationality group, representing 12.7% of the total. Indian students represented 34.5% of the total, Pakistanis 9% and children from the UK made up 4.9%. Children from Egypt, Jordan and Syria represented 4.4%, 3.1% and 2.8%, respectively, of the total and another 3.1% were from the Philippines. When it came to the proportion of children in different types of schools, 32.2% were enrolled in schools following the UK curriculum, 30.8% in Indian schools, 20.9% in US schools, 6.5% in MoE schools and 2.8% at schools offering the IB. At Jumeirah College, which offers the UK curriculum through to A Levels, there are children from 59 different countries. “It certainly gives them a greater understanding of the global nature of the world in which we live and it prevents them from building up stereotypical perceptions,” O’Connor told OBG. “We have a fantastic diversity here, and we use that and celebrate that as much as we can. That can only prepare students in a positive way.”

Staying Power

Underpinning the sustained growth in school pupil numbers has been a shift in behaviour by the expatriate labour force in recent years from temporary stays in the emirate to more permanent residence. “When I came here in 2006, school options were limited, and there were maybe a handful of schools following a British curriculum,” Sajida Shroff, CEO with Altamont Group, told OBG. “Subsequently, there has been huge interest in the K-12 sector, resulting in more players coming into the market with diverse curriculum options. Schools realise that parents are more discerning and schools have to measure up…However, even with the growth of the K-12 sector, enrolment capacity is still limited so that overall demand still exceeds supply.”

Indeed, KHDA’s own research has shown that more children are being educated entirely in Dubai from kindergarten through 12th grade, for example: it showed that in the 2012 PISA tests, about 70% of the 15-year-olds taking part had completed all their education in the emirate.

Schools Fees

According to KHDA statistics for 2013, fees at Dubai’s private schools range from Dh1725 ($469.55) to Dh98,000 ($26,675) a year, but 42% of students pay less than Dh10,000 ($2722) a year for their education. KHDA has the power to sanction fee increases and in 2014, 127 of the country’s existing private schools requested permission to increase their fees. Data on fees charged in 2013/14 published on KHDA’s website show performance in school inspections can be a factor. Among UK curriculum schools, Dubai College, which was ranked outstanding, charged Dh81,348 ($22,142) for year 12, while Cambridge International School, ranked good, charged Dh21,253 ($5785) for year 12. Westminster School, which was judged to be acceptable, was charging Dh10,665 ($2903). However, there are also anomalies. The Indian High School, which delivers India’s CBSE syllabus, was judged outstanding and yet it only charged Dh5180 ($2903) in grade 12, while GEMS World Academy, which delivers the IB and was judged to be good, charged Dh98,649 ($26,852) for the same age group. The Indian High School has 5866 pupils aged nine to 18 and charged an average of Dh6383 ($1737) a year, while GEMS World Academy has 1853 pupils aged three to 18 and charged an average of Dh80,000 ($21,776) a year across all grades. According to KHDA figures for 2013/14, the total possible annual gross income obtained from fees alone at Dubai private schools was Dh4.7bn ($1.28bn), although it acknowledged scholarships and fee reductions may have reduced this number slightly.

Gems

The growth of private education in Dubai is epitomised by GEMS, a company that grew from one school in the emirate 55 years ago, to become the world’s biggest provider of independent K-12 education. According to Forbes, GEMS chairman Sunny Varkey had a net worth of $1.8bn in September 2014, placing the educational entrepreneur 55th in the publication’s list of India’s wealthiest citizens. Varkey joined the company founded by his parents as soon as he finished his A Levels and went on to create an educational empire, which employs 13,000 teachers and educates 150,000 pupils in the Middle East, Africa, Asia, Europe and the US. The company’s model has been to build, own and operate its schools and to offer British, American, national and international IB curricula at fees tied to specific communities and described on the company’s website as “affordable to premium”. Its schools emphasise academic performance and also place a premium on “preparing for life” through extra-curricular activities. “Schools are more than qualifications; schools are about opportunities, and if a student chooses not to do music at the GCSE or A Level, it does not mean they cannot have a rich range of musical experience at school,” O’Connor told OBG.

Textbook Investors

The ongoing, and anticipated, growth in demand for private education in Dubai makes the sector attractive to investors, but according to Shroff there are pitfalls in a complex market and due diligence is required. “The opportunity is there but, as with any investment, I would say make sure you have done your homework before you jump in,” Shroff told OBG. “There are people guaranteeing x, y or z return on investment within a year, which is not realistic. Education is a long-term investment. It takes 24 months from concept to turnkey for a school to be opened and you will not break even until year three to five depending on the capacity of your school and your enrolment,” she added.

Outcomes

The opportunity to study at international schools offering 16 different curricula prepares school students in Dubai for the possibility of a university education anywhere in the world. Jumeirah College reports that, with the exception of one student who opted for a gap year, all pupils leaving after A Levels in 2014 took up a university place somewhere in the world. While 70% opted to study at UK universities, five accepted scholarships to universities in the US and others chose to study in Canada, South Africa, Australia and New Zealand, and on courses delivered in English at universities in Europe. “The overwhelming majority leave Dubai to go to university, but not universally and you have got increasing numbers of universities that have branches here,” O’Connor explained. “It is quite possible for a student to spend year one in Dubai, year two at the mother university and so on.”

Higher Education

The tertiary sector is comprised of 57 higher education institutions, of which 26 are branch campuses of international universities, 25 are local universities, three are funded by the federal government and three are vocational colleges. International campuses and local universities account for 80% of total student enrolment, with just 18% of students attending a federal university and 2% enrolled at vocational tertiary colleges. Local universities are institutionally accredited by the Commission for Academic Accreditation (CAA) of the Ministry of Higher Education and Scientific Research (MoHESR). However, they are not necessarily subject to international quality assurance or accreditation. “The [MoHESR’s] current accreditations are in many cases just as stringent as any international criteria, which allows many local institutions to build top-ranked organisations without attaining additional international accreditations,” Nitin Anand, chair of the executive council and director at Skyline University, told OBG.

International universities can either be accredited by the CAA or through Dubai’s University Quality Assurance International Board (UQAIB). UQAIB was established in 2008 to ensure students attending courses at universities in free zones would leave with a degree recognised by employers in the UAE. UQAIB is comprised of an independent board of higher education experts from around the world and its approval assures students that the degree taken at the branch campus in Dubai has the same standing as a qualification earned at the institution’s home campus. Dubai hosts branch campuses from institutions in Australia, UK, US, India, Russia, Iran, Pakistan, France, Ireland and Lebanon.

Student Mix

Total student numbers attending full and part-time degree courses rose by 9% in 2013 to 52,586, according to KHDA data. It also showed the number of Emirati students studying for degrees in Dubai had also increased. Of the total number of students, 22,694 were Emirati, representing 42.3% of the total student population and a 10.1% increase in number from 2012. An additional 7% of students came from other GCC countries, 14% from other Arab countries, 16% from India and 5% from Pakistan. The data also shows most Emirati students choose courses at either federal universities (41%) or at locally accredited institutions (53%), with just 5% opting to study at international branch campuses and 1% opting for courses at vocational colleges.

Of the 37,500 students enrolled in higher education in Dubai, 71% are taking undergraduate degrees, 7% are on foundation degrees and 18% are studying for a master’s degree. In 2013 the total number of students undertaking a PhD was 351. In the graduating class of 2013, 5838 students, or 55% of the total, received bachelor degrees; 3564 students, or 34% of the total, received master’s; and 10 students received a PhD, about 0.1% of the total. The total number of students leaving institutions with higher education qualifications was 10,563, which marked a 15.6% increase on the previous academic year.

Free Zones

The figures for higher education are based on data provided by MoHESR for federal and local universities and also on KHDA information on the courses taking place at private universities. Many of the international branch universities are found in two free zones: Dubai International Academic City (DIAC) and Dubai Knowledge Village (DKV). However, there are some exceptions, often related to the core subjects being taught, or convenience for students, some of whom may be working. The American University in Dubai has a campus in Media City; Cass Business School, from City University in London, leases premises in Dubai International Finance Centre (DIFC); the US’s Rochester Institute of Technology Dubai is at Silicon Oasis; Emirates Aviation University has its own premises in Deira; the American Hult International Business School is in Internet City; and Moscow University for Industry and Finance (Synergy) was founded at Jumeirah Lakes Towers in 2013. Although several international universities lease premises at DKV, DKV’s primary focus is on smaller bodies providing vocational training, executive search and human resource management services. DIAC is 35 km from DKV on a campus shared with KHDA and close to Dubai Silicon Oasis. DIAC provides teaching space, communal facilities and support services in marketing, networking, public relations and visa processing for branch universities.

Branch Campuses

The UAE has the highest concentration of branch campuses of any country in the world. There are 200 university branch campuses worldwide, 37 of them in the UAE and 25 of those in Dubai. The commercial model typically used is that an investor will fund the development and marketing of the branch, but buy in the brand name of an overseas university, which will provide staff, syllabus and academic systems consistent with the home campus. The branch campus is expected to be self-financing and dependent on tuition fees for income, rather than attempting to draw down research funding or generate income through entrepreneurial activities of its staff. “To come in as a branch university, you have to go through a series of reviews and a group of international regulators look at every programme; the approval rate is fairly low,” Leigh Ann Khosla, director of business development for DIAC and DKV, told OBG. “Every year each university has to get permission to keep operating and if they want to offer additional programmes they can go for it twice a year. The course has to be one that is already offered at the branch home campus and it has to be taught in the same way here,” she continued. The build, own, operate (BOO) model used for schools is not prevalent among private higher education providers, most of whom lease premises in one of the free zones. The UK’s Heriot-Watt, India’s Manipal and BITS Pilani, and the Institute of Management Technology are exceptions to this rule and have developed their own campus facilities. Amity University will open its own campus in 2015 as well.

Five private universities account for 58% of the total number of private university students registered with KHDA. Heriot-Watt is the largest branch university with 101 staff on faculty and 3369 students. Australia’s University of Wollongong leases premises in DKV and has 2988 students, and the UK’s Middlesex University, also at DKV, has 2192 students. Emirati students accounted for 1% at Heriot-Watt, 10% at Wollongong and 2% at Middlesex. Manipal and BITS Pilani have 1556 and 1524 students, respectively, and 100% of their intake in 2013 was expatriate. Of the remaining private universities, the average number of students, is 338. ESMOD French Fashion Institute had 82 registered for its three-year diploma, while Michigan State University in Dubai had 45 students, 16% of them Emirati, enrolled in master’s courses in business, health and law and paying Dh43,939 ($11,960) to Dh66,240 ($18,030) a year.

Transnational Students

With 125 nationalities among the 20,000 students attending these international universities, and with Emiratis making up 5% of the total, students are motivated by earning an internationally respected degree. Dubai’s geographical location makes it a popular destination for students from China and India, who find it easier and quicker to obtain visas to study in the UAE than in the US, Canada, UK or Australia. Also, students applying for courses in India may find the competition for places in some subjects is more intense there than at the branch campus in Dubai. For Khosla, the cultural diversity at Academic City is a key part of the experience. “Having so many nationalities in our campus prepares them for what the workforce looks like now,” she told OBG. “I think that this little microcosm will prepare them for it when they do step into the working world and prepare them to deal with people from other cultures and other nationalities.”

Outlook

With 16 different school curricula, and international universities from 10 countries, there is no shortage of cultural diversity or choice in the education landscape. Following the BOO model for university branch campuses from all over the world, investors see plenty of opportunity to become involved in the education sector. However, with federal ambitions pushing the bar on standards in education ever higher, providers and investors can expect to face greater scrutiny over their teaching methods and student outcomes, which will ultimately improve the overall quality of education services.