With a rapidly expanding young population, the Middle East is a ready market for international executive education providers. Free zones in Dubai, as well as aggressive government-led initiatives in Abu Dhabi, Qatar and Bahrain, are feeding the region’s hunger for qualified and experienced business leaders.

Any business school … will struggle if they don’t look at Saudi Arabia, especially in the long term

Rahul Dhadphale, London Business School

Saudi Arabia is the GCC’s largest market for executive education. The kingdom is investing heavily in Executive Master of Business Administration (EMBA) degrees and in-house training. International business schools provide the country with the expertise it needs. 

“Any business school or education establishment will struggle if they don’t look at Saudi Arabia, especially in the long term,” says Rahul Dhadphale, London Business School’s regional director for the Middle East. Although the school services a substantial number of EMBA candidates from Saudi Arabia from its Dubai campus, its main growth area has been delivering customised in-house programmes to the private sector.

Saudi education market

Saudi Arabia is a tough market to crack, admits Dhadphale. “[The government] prefers to work with big brands, with established players, and they also like to know that you’re committed to the region and have a presence in it.” 

Saudi Arabia’s geography adds to the challenge. “Whereas the UAE is relatively easy to get into, Saudi Arabia has got very distinct, fiercely independent provinces. It’s actually three markets, not just one big one.”

The key to establishing a presence in the country, Dhadphale says, is by nurturing “champions” – local students who have taken open-enrolment courses at the school’s main campus in London, who then return and recommend the school to their professional network.

Though the economic downturn has undermined long-term job security, demand for executive education remains strong throughout the region. The nature of education, particularly EMBAs, is “counter cyclical”, says SP Kothari, deputy dean of MIT Sloan School of Management. “In times of downturn many individuals find it worthwhile to invest in their human capital, so they turn to management schools to get their degree.”

We’ve seen [a rise] in the number of people choosing to do our MBA, and we’ve not had to increase marketing

Craig Walsh, Manchester Business School

Demand for Manchester Business School’s MBA programme is “very much still booming,” confirms portfolio director Craig Walsh. “Most of our recruitment is through individuals. We’ve seen [a rise] in the number of people who are choosing to do our MBA, and we’ve not had to increase our marketing activity.”

Where the market has suffered is in the area of company-sponsored executive education. While individuals consider training to be a sound investment during a downturn, it is the training budget that companies typically cut to improve the bottom line.

“The downturn had an impact on our client portfolio because the companies that didn’t view training as being bottom-line strategic reduced their budgets,” says Joshua Kobb, director of international development and strategic partnerships at HEC School of Management Paris.

Educational institutes in Dubai’s Knowledge Village, an education free zone hosting more than 450 training bodies, consultancy firms and professional development centres targeted towards the corporate sector, have reported a sharp decrease in business since 2008. 

“The economic downturn has affected some sectors in the region, so that has affected our business,” says Ayoub Kazim, executive director of Knowledge Village and Dubai International Academic City. “Not all the sectors have recovered from this economic crisis, so it will require a year or so for some of the businesses to get back on track.” From 54 institutions applying to set up business in Knowledge Village in 2007, the number decreased to 40 in 2008, and again to 25 in 2009.

Corporate education partnerships

Focus has shifted from reliance on individual enrolments to fostering corporate partnerships. Schools in the region have aligned themselves with big business, and are offering courses and degrees tailor-made to specific vertical markets.

“Education providers must be prepared to develop long-term partnerships with business rather than their provision being primarily through a menu of open programmes,” says Walsh. In the UK, 70 per cent of Manchester Business School’s executive education business is generated through corporate partnerships – a model Walsh plans to emulate in the Middle East. “It’s about working closely with companies to develop the next level of talent, so that should a similar credit crunch happen again, they are buffered and don’t feel the impact of losing so many skilled people without fallback.”

Wharton Executive Education at the University of Pennsylvania has partnered with Dubai World in a leadership development scheme, while Cass Business School’s regional headquarters at Dubai International Financial Centre has made it a niche player in offering Islamic finance specialisations.

HEC Paris has entered the Qatari market with support from Total. The French oil giant is using HEC’s campus as a training location for its Middle East operations. “It sets us apart,” says Kobb of the partnership. “Energy is the main driver of economies in the Middle East, so the fact we have the support of a major energy player in the region is really important.”

Positive outlook for education sector

A strong, albeit slow, recovery is expected for executive education providers in Knowledge Village. Kazim anticipates “a huge growth in executive education programmes, especially from 2012 to 2015.” The growth rate, he adds, will return to that of the pre-financial crisis.

“Even with all its issues, let’s not forget Dubai is still Dubai. Many regions have been affected by the economic crisis, but the problems here are not as severe. Job opportunities are still far better than many other regions in the world.”

Encouraged by robust oil prices, growth in the region has been driven by the expansion of local companies and the investment of international businesses into the local market. 

Local companies established on a family model are getting bigger and their operations more complex. “Companies that are starting to grow internationally begin to realise that they need to rethink some of their strategy; they need to look at questions of innovation in their product or organisation,” says Kobb.

Internationally-focused organisations such as these need to be managed by middle- and senior-level professionals who have a solid understanding of the global economy and their company’s place in it.

“The family model of doing business is not appropriate now those companies are going international,” says Roy Batchelor, director of the Dubai EMBA for Cass Business School. “There’s a significant change in governance structure, and that’s where Western experience can come in.”

Greater interest in executive education is also coming from the public sector. Taking its cue from the West, local government has started to look at its departments as a business.  “They’re thinking about budgets, about profitability, about people,” says Dhadphale. “Governments are changing; they don’t have the bottomless pits of cash they used to and are more accountable than they have ever been.”

While few international business schools question the profitability of opening a branch campus in the Gulf, some have opted to operate in an environment where higher education is more established. Following a rigorous search for a partner to launch its Middle East presence, Boston’s MIT Sloan School of Management will shortly announce its decision to offer its MBA in collaboration with Sabancı University in Turkey.

“There were what I would call many drive-by institutes of education [in the GCC],” says Kothari. “We certainly weren’t interested in those types of outfits; we wanted something a little more deeply ingrained in education. MIT has more worldwide recognition; a greater academic reputation than some of the other players that I have seen in Dubai and Qatar.”

Healthy competition between business schools

The establishment of top-flight business schools, such as Insead and Hult International Business School, is helping the region to reshape itself as a leading provider of quality executive education. Though the recent flurry of business schools setting up campuses in the region has promoted healthy competition in the region, there is still room for more providers. 

“At this point we don’t think the market is saturated,” says Walsh. “Our research suggests there in an increasing need for investment in people, as organisations start to see improvements in the economic climate.”