Executive Education: Dubai's Woes Hit Education - Fewer Companies Want to Pay for Classes; Student Demand Falls
Thursday, 15 April 2010 | University News
Dubai in its boom years was a lucrative market for international business schools eager to set up shop in a region rich in oil money and short on homegrown management expertise. But while classrooms for the most part are still full, the B-schools that launched executive-education programs in the desert emirate before its economy tanked last year now find themselves working in a very different environment.
There's been a steep slide in interest from students based in Dubai, where many of the expats who might have enrolled in executive M.B.A. courses have lost their jobs and gone home, and the corporations that used to pay for employees to earn part-time degrees have slashed training budgets. Schools have started recruiting more heavily from neighboring areas whose economies are still relatively strong, particularly in nearby emirate Abu Dhabi and countries like Saudi Arabia and Qatar.
There's also been a shift in the business backgrounds students are coming from and the areas they choose to study. Finance and construction, once the Dubai economy's greatest strengths, send fewer students since the financial crisis and real-estate crash and, particularly in the case of finance, draw less interest in the classroom, program administrators say.
The city's troubles made headlines and shocked markets in November when the state-owned property company Dubai World said it sought to restructure $26 billion in debt. The local economy, though, had begun sliding months earlier, with the expats who had accounted for most of Dubai's executive M.B.A. students departing in droves.
London Business School, which began offering a Dubai-based executive M.B.A. two years ago, has cut its class size to 50 in one of the current cohorts and 60 in the other, down from more than 70 per cohort before the crisis. While application numbers have held steady, the proportion of highly qualified potential students fell, and administrators decided to trim numbers to maintain admission standards, says Prof. Naufel Vilcassim, the program's faculty director.
There are "fewer people who feel sufficiently secure in their jobs" to start an $88,000 degree, he says. "Fewer companies are willing to sponsor students, either financially or time-wise, and people who have financial resources want to keep their savings."
The steep decline in companies willing to foot the bill for employees' education has been a big factor, particularly in the hard-hit financial sector. "Corporate sponsorship is gone now in Dubai," says Ehsan Razavizadeh, the Dubai representative for London's Cass Business School. "It's not 100%, but I would say 90, 95% is gone."
Also down sharply is demand from Dubai companies for private programs tailored to their employees, Mr. Razavizadeh says. Such short courses were very popular when Cass opened up shop in Dubai in 2007, but the following year "the whole thing collapsed" there, although the market remains healthy in Abu Dhabi and neighboring countries, he says.
Dubai grew into an attractive market for international business schools over the past decade, thanks to the oil money flooding through the Gulf, a big expatriate population and strong government support for education.
Since the downturn, the decline in Dubai-based demand has been especially strong in finance, which has been hit in business schools world-wide. There are also fewer Dubai-based students from construction and real estate, once big boom areas for the emirate. Their numbers, though, have been largely made up by students from neighbors like Abu Dhabi and Saudi Arabia, where the building sector remains strong.
Foreign schools say they have stepped up recruiting from those markets in all subject areas, with Dubai's crash adding urgency to plans many say they already had to draw students from around the region.
"There's less of a pool in Dubai, there is no doubt about it," says Dr. Vilcassim. "We have had a need to aggressively market and take our message to those other markets in a way which may not have been done for the first few classes, or not with the same intensity."
Patricia McCall, Middle East and North Africa regional director for Duke University's Fuqua School of Business, says that while most of her program's prospective Gulf-based students still come from Dubai, Abu Dhabi, Saudi Arabia and even Lebanon and Jordan were becoming more important markets.
Nigel Banister, chief global officer at Britain's Manchester Business School, says he was surprised his program lost only a few students in the exodus of expatriates from Dubai, although like administrators from other schools, he says a number had lost or changed jobs.
In response, B-schools have boosted career services, adding resume-writing workshops, networking events and partnerships with recruiting firms to help students through the insecure times.
They've also tried to mine the crisis for lessons, and Dubai's woes have become an important topic of classroom discussion, in courses from finance and macroeconomics to marketing. Dr. Vilcassim says he'd talked to branding students about how to repair the city's battered image. And Ms. McCall says Duke's global M.B.A. students, who attend study modules around the world, had gotten a close-up look at the Dubai economy during their recent stint there.
"It would be very hard for a student who didn't actually come here to understand Dubai's role," she says. "In the end, they left with a much broader and more realistic vision" of the city.
By Beth Gardiner, The Wall Street Journal Europe
