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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
Executive Summary
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
Number of private higher education institutes has risen from 10 in 2005 to 29 in 2012
20
29
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%
10
2005
2009
2012
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
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
97%
100%
100%
86%
55% 41%
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 doesnt look all that bleak
2011 Primary Source: UNESCO 2020 2011 2020 2011 Tertiary 2020
Secondary
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
11%
16% 12% 9% 9%
Local teachers are not qualified enough and not highly skilled, especially in the technical and engineering domains. Saudi
7%
4%
Education
Engineering
Healthcare, Medical
Science
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