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Learning the ‘value’ of education in UAE

sandhya@khaleejtimes.com Filed on June 11, 2018 | Last updated on June 11, 2018 at 07.41 am
Learning the ‘value’ of education in UAE
The UAE's private K-12 education market is expected to grow to $7.1 billion by 2023 from $4.4 billion in 2017, says a report.

(alamy.com)

Growing demand to spur investment in UAE's private education sector.

The UAE's education sector is witnessing a robust growth with an influx of investors as demand burgeons aided by a rise in employment opportunities. The UAE's private K-12 education market is expected to grow to $7.1 billion by 2023 from $4.4 billion in 2017, says a report.

The Boston Consulting Group (BCG), in its latest report entitled 'Where to invest now in the GCC private education', said the private education market in the region is becoming a magnet for investors and is expected to double over the next five years from $13 billion to $26 billion by 2023.

Despite the fact that strong growth has been predicted across the region, the report said investors must fine-tune their strategies to account for the shifting circumstances before committing to an investment opportunity in the GCC.

The BCG report identified four drivers of growth in the private education sector. This includes shift towards private schools, higher tuition fees, population growth and increase in enrollment. It said tuition fees for the private education sector will continue to rise from 2 per cent to 4 per cent on average per year.

"Given the UAE's agenda for a knowledge economy (e.g., the UAE vision 2021), there is the need to strengthen the overall education system so that it can rival the best globally," Raghu said.

He said it is important to address the deficit in science, technology, engineering and math (STEM) skills on priority in order to facilitate a competitive economy that harnesses developments like artificial intelligence (AI) and big data.

Dr Leila Hoteit, partner and managing director, The Boston Consulting Group, said new developments, such as evolving demographics, government interventions, and regulatory issues, are reshaping the complex private education market within each country in the GCC.

"As the potential for growth in the private education market varies significantly from country to country, it is important for investors to understand the size of each market and its potential for growth in the coming years," Hoteit said.

The private K-12 education market is most mature in the market is the most consolidated across the GCC, with 25 per cent of private K-12 schools owned by GEMS Education. Although there is high market saturation across the Emirates with 90 per cent of Dubai and Sharjah students and 65 per cent of Abu Dhabi students enrolled in private education sector, the country's private school market is still expected to grow.

The UAE's population is predominantly expatriate, and in Dubai, the number of expatriates is expected to experience further growth with the launch of Expo 2020 and other mega-projects, according to the report.

"The education sector in the UAE, with the presence of world class institutions and curriculums have over the years witnessed steady growth and will continue to do so in the coming year as well," said Krishnan Ramachandran, CEO, Barjeel Geojit.

"The fact that UAE attracts a number of students from across the world to enroll in various leaning programmes is a good indication that the education sector has evolved over time and poised to reach a high state of maturity its offerings and quality delivery," he said.

He said the federal government is very supportive to bring in world-class education programmes and recognises human capital to be the primary driver to evolve as a pioneer knowledge-based economy.

"What distinguishes UAE compared to many other countries is the wide range of learning options which meet the rigor of international learning standards at competitive costs," he said.

Nrupaditya Singhdeo, Board Member, Al Najah Education, echoed the similar views and said the mid-market segment of the education sector will post robust growth in 2018.

"We believe that demand is shifting from super premium and premium segments of the market to the mid-market as consumers elect for a premium quality experience at a more affordable price tag," Singhdeo said.

He said Al Najah Education operates 2 mid-market British curriculum schools in Dubai under the Horizon brand, both of which are seeing robust enquiries and growth in registrations for next academic year.

Shehzad Jamal, Partner, Education and Healthcare consultancy, said there is scope for investment in education sector due to strong demand in the market and shortage of seats especially in Northern Emirates.

"In the overall context, we see growing demand for education in UAE, especially in the Northern Emirates where there is a shortage of seats and some students have travel to other emirates to attend school," he said.

"If we look at Dubai the K-12 education sector is matured with increased choices of curricula and schools and future demand will be mainly driven by population growth," Jamal concluded.

- sandhya@khaleejtimes.com

author

Sandhya D'Mello

Journalist. Period. My interests are Economics, Finance and Information Technology. Prior to joining Khaleej Times, I have worked with some leading publications in India, including the Economic Times.


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