Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
Opportunities in the
Saudi Arabian
education sector
2Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
Table of contents
1. Saudi Arabia – Background to the ...
3Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
• Higher unemployment rate amongst Saudi youth is a bi...
4Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
Promotion of private education
Number of private highe...
5Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
Demand for technical graduates to lead to increase in ...
6Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
Reaching the Oasis
Investment opportunity is on the ri...
Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved.
A complimentary copy of the white paper can be download...
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Growing Saudi Education Sector - An Oasis or a Mirage?

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The education sector in the Middle East is expected to grow exponentially on the back of rising population, increasing private sector participation and growing unemployment. Especially for investors in the private education sector, prospects appear very bright as there have been a slew of regulatory developments promoting the education sector. Although investment opportunity is on the rise in the education sector, we know that with high returns come higher risks as well. Private players need to determine the right location, right offering and correct price points to capture a healthy share of the pie. ValueNotes has recently published a White Paper titled “Growing Saudi Education Sector | An Oasis or a Mirage?” This White Paper provides an outlook of the current Saudi Arabian education sector by exploring the current industry scenario, key market dynamics and scope for future growth. A complimentary copy of the white paper can be downloaded from here: http://bit.ly/17V2HWb

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Growing Saudi Education Sector - An Oasis or a Mirage?

  1. 1. Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. Opportunities in the Saudi Arabian education sector
  2. 2. 2Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. Table of contents 1. Saudi Arabia – Background to the rise in education sector 2. Pressure to reduce unemployment 3. Education is a top priority 4. Promotion of private education 5. Demand for technical graduates to lead to increase in tertiary enrolment 6. Social changes to drive improvements in education 7. Education sector as an attractive destination for foreign investors 8. Stringent regulations may not be of the best interest 9. Reaching the Oasis
  3. 3. 3Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. • Higher unemployment rate amongst Saudi youth is a big area of concern for the government. The Kingdom expects the private sector to play a significant role in the diversification, which in turn will generate job opportunities for Saudi nationals. Private companies prefer non-Saudi employees who are more skilled than their own nationals • The need of the hour is to improve the overall education system of the country to battle unemployment. Although the government has been taking several actions, the real change in the education sector is expected to come from the private sector • Private enrolment rate for overall education has been growing at 9% as compared to public enrolment growth rate of 1%. Out of ~42,000 schools in 2012, 10% are privately held as compared to 9% in 2009. This shows the increase in importance given to the private sector • In Saudi Arabia, private sector engineering colleges still lack the quality education that multinational firms seek. As demand for technical education is increasing, there remains a huge potential for private players • Although investment opportunity is on the rise in the education sector, with high returns come higher risks as well. Private players need to determine the right location, right offering and correct price points to capture a healthy share of the pie Executive Summary
  4. 4. 4Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. Promotion of private education Number of private higher education institutes has risen from 10 in 2005 to 29 in 2012 The private higher education segment in Saudi Arabia is growing at an annual rate above 35%, compared to the public sector, which is growing at only 10% Between 2007 and 2011, the revenue of private education has grown by over 40% per annum and is currently estimated at USD300 million. 50% of private higher education revenue comes from medical courses, where enrolment is growing at 45% per annum This figure confirms the interest of Saudi students in medical courses and also proves that the status of private sector medical colleges is much better than that of other professional courses 10 20 29 2005 2009 2012 Source:MinistryofHigherEducation Private higher education institutes in Saudi Arabia “Almost 90% of the education output of Saudi Arabia is not linked with the labor market thus it becomes difficult for students to get desired jobs.” - Abdullah Al-Obaid, Ex Saudi Minister of Education
  5. 5. 5Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. Demand for technical graduates to lead to increase in tertiary enrolment 97% 100% 86% 100% 41% 55% 2011 2020 2011 2020 2011 2020 Primary Secondary Tertiary Source: UNESCO Rise in enrolment in the tertiary education 7% 11% 4% 12% 9% 9% 16% 17% 21% 15% 2007 2012 2007 2012 2007 2012 2007 2012 2007 2012 Education Engineering Healthcare, Medical Social, Business,Law Science Enrolment in tertiary education by field Saudi Arabia aims to achieve 100% enrolment in primary and secondary education by 2020, which does look achievable. However, improving enrolment in the tertiary segment remains a major challenge due to the lack of infrastructure and trained teachers Most students consider tertiary education in Saudi as a waste of time owing to poor placements. But due to improvements in the overall education system, the scenario doesn’t look all that bleak In fact, a few segments like engineering have witnessed rapid growth in recent years. The enrolment figure confirms the interest of Saudi students in the engineering and medical field Local teachers are not qualified enough and not highly skilled, especially in the technical and engineering domains. Saudi universities have negligible research capabilities due to the lack of eligible teachers. They are expected to face a huge dearth of skilled teachers in next three years. In hindsight, this offers an opportunity for teacher/faculty training institutes in Saudi Source: Ministry of Higher Education
  6. 6. 6Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. Reaching the Oasis Investment opportunity is on the rise in the education sector, but with high returns come higher risks. A few steps that can help private players make most of this opportunity are: • Need to determine the right location, right offering and correct price points to capture a healthy share of the pie • Before starting an educational institute, one must be clear as to which type of education (primary /secondary/tertiary) can be offered • The courses offered should match with the industry demand to ensure placements are high Collaborating with foreign universities and multinational companies can ensure an improvement in the quality of education and the employability of students But the decision about which university or company to tie up with, needs to be evaluated with a lot of care. As the journey is long and the road is less known for most of the companies, it is advisable that new entrants seek a research partner who can guide them in the process “Higher investment in educational institutes is necessary as they are the only way to develop a country’s most important resources, namely its human resources. Saudi Government wants to increase private sector participation in education” - Saudi Princess Lolowah bint Faisal Al Saud
  7. 7. Copyright © 2013 ValueNotes Database Pvt Ltd. All rights reserved. A complimentary copy of the white paper can be downloaded from here http://www.valuenotes.biz/knowledge-center/white-papers/opportunities-saudi-arabian-education-sector/ www.valuenotes.com Indian Markets www.sourcingnotes.com Outsourcing Intelligence www.valuenotes.biz Research & Consulting ValueNotes | Pune, India | T: +91 20 6623 1743 | E: research@valuenotes.co.in

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