Demand for executive education – and for master of business administration (MBA) programmes in particular – has accelerated in the Arab world over the past decade. This trend remains undimmed. Most business schools report healthy application figures, but recession has come late to the region and is affecting the market in various ways.

There is a strong appetite for education in the region … undergoing economic transition

Peter Jadersten, Insead Abu Dhabi

“MBAs fall into distinctive segments: full-time and executive MBAs,” says Naufel Vilcassim, Dubai faculty director for London Business School.

“Full-time MBA students have three to five years’ business experience. Executive MBA students are managers of seven or eight years’ experience, holding senior roles within their organisations.

“The MBA business is cyclical. When the market is soft and employment falls, people come back to management education and choose full-time MBA programmes to upgrade their skills-set so they will be ready to join management ranks when the economy recovers.

“But [senior working managers] are more reluctant to commit 18 months of their time to an EMBA course if there is any suggestion that their job security is uncertain – unless they are sponsored by their companies. So we have seen a drop in Dubai class sizes this year.”

Harder times in the Middle East

Hull University Business School, which runs part-time MBA programmes in Oman and Bahrain, reports a similar experience. David Bright, programme leader for the distance-taught MBA, says Hull delayed its last Bahrain MBA programme after a drop in admissions. “Demand is down in the Middle East, but we see continued interest in Qatar [which is booming] and Saudi Arabia. The Middle East is struggling less [than the Far East], but times are definitely harder.”

We need to expand education to meet the needs of the Emirati and expatriate workforce

Warren Fox, KHDA

Not all business schools have seen a fall in admissions, however. Cass Business School says its Dubai EMBA course in 2010 was oversubscribed. “This time last year, we decided to freeze our course fees because we expected a difficult year,” says Roy Bachelor, director of Cass’ Dubai EMBA programme. “Last year, we enrolled 60 students. We expected numbers to be lower this year, because Dubai-based executives are working harder than ever, but our intake is the same. After a slow start, we have been inundated with high-quality applicants over the summer.

“Across the region, we see good levels of growth … Business schools in mature markets like the US and UK will continue to look at opportunities here.”

If this year has been uncertain, mid- to long-term prospects remain buoyant.

“There is a strong appetite for education in the region,” says Peter Jadersten, executive director of Insead’s Abu Dhabi campus. “It’s a region undergoing economic transition and development. Companies are starting to internationalise as trade barriers come down.”

Government departments have long dominated local employment and the Middle East urgently needs business and management skills. Saudi Arabia General Investment Authority (Sagia) says the kingdom needs 2,000 MBA graduates a year to achieve its social and development goals. The kingdom produces fewer than 200.

Gulf states have targeted different education segments. Dubai leads the Arab world in business education.

According to Dubai’s Knowledge and Human Development Authority (KHDA), 7,000 of the emirate’s 38,000 higher-education students are enrolled in MBAs. Abu Dhabi has targeted social sciences. Qatar majors in science, medical courses and vocation-based undergraduate programmes.

Foreign campuses in the UAE

But there are no guarantees that every foreign university or business school will succeed. Several high-profile ventures have not worked out. This summer, Michigan State University (MSU) closed one of two Dubai campuses. MSU had enrolled 100 students to its Dubai International Academic City campus, a tenth of its 2010 target. Last year, George Mason University closed its campus in Ras al-Khaimah, and Bryn Mawr College abandoned a planned Abu Dhabi campus. Harvard Medical College has delayed its Dubai launch, and Rochester Institute of Technology (RIT) cancelled expansion at Dubai Silicon Oasis after a 20 per cent shortfall in enrolment.

Not everyone blames economic constraints, however. “Even three or four years ago, it was not easy to set up an institution in the Gulf,” says Cedwyn Fernandes, campus coordinator of the MBA programme at Middlesex University, Dubai. “The failures include companies that entered the market before the downturn.

“Even a brand that is strong internationally will fail without the right faculty on the ground. It must offer reasonable fees, regardless of boom or downturn. Performance is determined by delivering good programmes, not by big brand names or aggressive marketing.”

Two top-ranked players that have entered the market this year are HEC Paris and Duke University. HEC Paris is launching an EMBA programme at Education City in Qatar, in partnership with the Qatar Foundation’s Management, Education and Research Centre (QF-MERC). Duke University has launched Fuqua School of Business at Dubai International Financial Centre – one of a string of campuses in London, St Petersburg, Delhi and Shanghai.

“We need to expand education to meet the needs of the Emirati and expatriate workforce,” says Warren Fox, executive director of higher education at KHDA. “Executive MBAs are particularly important to meet these goals, and the market is still growing. Higher education continues to expand.”

KHDA figures show that. “Recession has had some effect on applications,” says Fox. “Dubai has seen a drop in professional residents. When companies downsized, we saw departures, [but] we are still in a position to meet the need for business education and training. Overall, enrolment levels are holding up or increasing.”

Executive education goes beyond MBAs. There are non-degree options too. Many business schools offer open enrolment programmes – short courses that address particular management topics or segments. Many create programmes for corporate or government clients.

Manchester Business School launched its first non-degree courses from Dubai International Academic City this autumn, and Cass Business School will allow non-students to attend individual modules from its Dubai MBA programme for the first time this year. Insead built its presence in the Middle East through tailored programmes for state departments and government companies.

Meanwhile, there is growing regional demand for career-related master’s degrees. Historically, Middle Eastern students travelled abroad for postgraduate studies. Many still do, particularly for PhD courses.

Now, Gulf universities are launching postgraduate programmes, many slanted towards specific careers. “Two or three UAE schools offer DBAs (doctorate in business administration) and PhD courses in education or business,” Fox notes.

Postgraduate programmes in the UAE

“United Arab Emirates University offers a PhD in engineering. Masdar Institute has joined forces with Massachusetts Institute of Technology (MIT) to offer PhD courses in engineering and energy. King Abdullah University of Science and Technology (Kaust) is offering Masters and PhD courses in engineering,” says Fox.

Overseas universities aim to tap into this new demand for Masters courses. Middlesex University opened a postgraduate centre at Dubai’s Knowledge Village this summer, offering Masters degrees in psychology and IT management, with more courses in the pipeline.

“We do not feel that the downturn has affected demand,” Fernandes says. “Yes, people lost jobs in Dubai and returned home, but these people were not our target market.”