Demand for non-degree-level executive education has fallen worldwide this year, as companies slash their education and training budgets to help them cope better with the recession.
A May 2009 survey by UK consultant PricewaterhouseCoopers shows that almost a quarter (23 per cent) of companies across Europe expected their training and development budgets to decrease this year.
The Gulf region, however, has continued to attract new universities and business schools as demand for executive education continues to grow. Business schools with a presence in the GCC states report that company-funded courses in Qatar, Abu Dhabi and Saudi Arabia in particular have held up well despite the downturn.
“We have made cuts in many areas, but not in our executive education or training programmes”
Abdallah al-Dubaikhi, president, Afwaf
In the Gulf’s education hubs of the UAE, Bahrain and Qatar, top universities and business schools maximise their profits through a three-pronged approach that combines high-end MBA and executive MBA courses with bespoke corporate programmes that address specific skills gaps.
Both state-owned and private companies have traditionally been a major source of income for Gulf-based business schools, with companies using the institutions to create tailor-made executive education programmes for their senior managers.
The Gulf markets continue to demand education and training for their senior managers. With state-owned entities accounting for about 60 per cent of economic activity in Saudi Arabia, a situation that is similar across the five other GCC member states, business schools are reporting that demand is still strong thanks to government companies seeking tailored executive education programmes.
State-owned entities such as Abu Dhabi investment vehicle Mubadala Development Company are less likely to be hit by budget cuts. With the UAE government having budgeted on oil prices at below $50 a barrel this year, the financial year is predicted to end with a surplus rather than a deficit, which would have triggered government cutbacks to bodies such as Mubadala.
Rather than cutbacks, international business schools are reporting growing interest in executive education from state-owned companies.
The Abu Dhabi Education Council (Adec) is working closely with France’s Insead to create executive education programmes for government bodies such as the Abu Dhabi civil service and Mubadala. “Because the government here plays such a big role, we are getting a lot of interest from government and semi-government bodies,” says Javier Gimeno, dean for executive MBAs at Insead.
The French business school, ranked fifth in the world for its global executive MBA by UK newspaper the Financial Times, is also working with international conglomerates such as Saudi Arabia’s Olayan Group.
Insead has also expanded its open-enrolment MBA programme in the emirate, in October launching its global executive MBA, which it hopes local companies will use to enrol senior managers on MBA courses.
“We believe Insead can contribute to the development of management capabilities in the region,” says Gimeno.
He says there is a great need for executive education. “The region has grown a lot, and the global executive MBA will target local people in positions of responsibility, expatriates managing businesses in the region, and private companies and entrepreneurs.
“We work with various companies from around the region – for example, Saudi and Qatari companies – to create tailored courses. There is definitely a need to get them up to speed [in management and business skills]. A lot of these companies are trying to position themselves as being global.”
While Qatari company executives are travelling to the UAE to study, Qatar’s Education City also offers executive education courses and MBAs closer to home. State-owned Qatargas has commissioned the US’ Carnegie Mellon University to create leadership development programmes at its campus at Doha’s Education City.
In March 2008, about 50 senior managers from Qatargas embarked on Carnegie Mellon tailored education courses. The two-day programme involves a series of modules, including global competitiveness, team collaboration, strategic cost management, leadership networks and international business building.
In the US, Carnegie Mellon is home to the Tepper School of Business, which has worked in Qatar since 2007 on open-enrolment, non-degree-level executive education programmes. Last year, more than 40 students enrolled on a -programme aimed at entrepreneurs interested in commercially developing a new technology.
In neighbouring Saudi Arabia, large companies are likely to travel to neighbouring GCC states for executive education courses. Of the top 20 business schools in the world, according to the Financial Times 2009 global MBA rankings, only two have a presence in the Gulf: London Business School in Dubai, and Insead in Abu Dhabi.
Riyadh has not liberalised its education sector to the extent that the UAE has, meaning international business schools have not established a presence in the kingdom to date.
However, the Saudi General Investment Authority (Sagia) plans to open the higher education market to new players, promising to make it easier and more straightforward for foreign education providers to win operating licences in the six new economic cities.
In the meantime, London Business School’s Dubai centre is providing custom-built programmes for the state-owned Saudi Basic Industries Corporation (Sabic), one of the world’s leading manufacturers of chemicals, fertilisers, plastics and metals.
London Business School is also working with the Orascom group of companies in Egypt, using its base at Dubai International Financial Centre (DIFC) as a hub for the wider Middle East.
One Saudi company that has partnered with international business schools outside the kingdom is Riyadh-headquartered Afwaf Investment, which specialises in private equity. Despite the financial downturn having hit private equity firms hard, company president Abdallah al-Dubaikhi says the company is continuing to invest in training.
“We have made cuts in many areas, but not in our executive education or training programmes,” he says. “Education is even more important now, during the downturn. Now, more than ever, we need to make good decisions for our business.”
Al-Dubaikhi says that while several Saudi business schools offer “efficient” MBA courses, most lack the global perspectives his company requires from short executive courses, in particular.
Afwaf works with big names such as Insead or Switzerland’s IMD to tailor programmes to the company’s needs.
“Executive education is especially important for an investment company,” says Al-Dubaikhi. “We receive daily investment requests from all over the world so education is a continuous phase. We bring in outside experts, or send people to business schools with which we have long-term relationships such as -London Business School, IMD in Switzerland, Insead, Harvard and Said Business School.”
Tailored executive education programmes are holding up in the Gulf despite the finan-cial downturn.
“With tailored programmes for corporate clients, we have not seen any softening in demand,” says Peter Jedersten, executive director of Insead Abu Dhabi. “Abu Dhabi is dominated by state-owned companies that continue to invest in education, and there is a difference in the economic climate to Dubai, where the fall in demand has been steeper.
“We are working with several companies, and demand remains strong. We are also discussing new opportunities for courses with potential new clients in Saudi Arabia, Qatar and Bahrain.”
For executives whose companies have had to cut back on training budgets, scholarships are still an option. Judge Business School at the University of Cambridge in the UK offers two scholarships dedicated to Arab students. The Mohammed bin Rashid al-Maktoum Fellowship, named after the ruler of Dubai, covers fees and costs for students from Arab League member states.
The £30,000 ($50,370) Nabil Boustany Scholarship, awarded bi-annually, gives priority to Lebanese nationals, but students of all nationalities can apply. The Nabil Boustany Foundation is the creation of a wealthy Lebanese businessman and philanthropist, who funds a similar MBA scholarship at the US’ Harvard Business School.
Oxford University’s Said Business School offers its own Mohammed bin Rashid al-Maktoum Fellowship scholarship for Arab League MBA students. Sumitomo Mitsui Banking Corporation Europe funds a second regional scholarship that covers full MBA course tuition fees and promotes the Japanese bank’s commitment to Islamic finance.
With the private sector contributing a growing share of non-oil gross domestic product (GDP) to the GCC states’ economies – in 2008, Saudi Arabia’s non-oil GDP grew by 4.8 per cent – the need for business management skills will continue to grow in the Gulf for decades to come.
As the region’s family owned conglomerates opt to go public, so the need for tailored -executive education courses will also represent a major opportunity for business schools with a presence in, or specialist knowledge of, the Gulf.
- $50,370 – Value of the Nabil Boustang Scholarship for MBA students
- 50 – Number of Qatargas managers on first tailored Carnegie Mellon course
- 2 – Number of scholarships offered to Arab students by UK’s Judge Business School
Case study: Abdallah al-Dubaikhi
Abdallah al-Dubaikhi, president of Afwaf Investments in Riyadh, took part in the Saudi-Oxford advanced management and leadership programme. This is a fixed-content course, with entry via invitation only, run as a joint initiative by Oxford University’s Said Business School and Riyadh-headquartered Rakisa Education
The Saudi-Oxford advanced management and leadership programme brings together top Saudi executives from public and private sectors in a four-week course built around the kingdom’s future leadership challenges. It uses real-life case studies and sets projects for participants to develop innovative solutions. This year’s programme covered education, health, energy, water, transportation, telecoms and petrochemicals.
“It was the right programme at the right time, held just as the global finance crisis was taking place,” says Al-Dubaikhi. “I wanted to plan how to manage uncertainty. The programme was designed for Saudi business leaders looking at the needs of our market in the context of global events.
“There are many such courses available worldwide, but many focus on single issues – only leadership, or only marketing, or only -finance. The Saudi-Oxford advanced management and leadership programme offered a mix of everything.”
So impressed was Al-Dubaikhi by the course that he returns to Said Business School in January. This time he has signed up to the school’s executive MBA programme, and will spend a week every month in Oxford for the duration of the 16-month course.
“Education is even more important now, during the downturn,” he says. “Now, more than ever, we need to make good decisions for our businesses.”