Presentation is loading. Please wait.

Presentation is loading. Please wait.

Partners in Growth SAUDI ARABIAN GENERAL EDUCATION: THE PRIVATE SECTOR CASE.

Similar presentations


Presentation on theme: "Partners in Growth SAUDI ARABIAN GENERAL EDUCATION: THE PRIVATE SECTOR CASE."— Presentation transcript:

1 Partners in Growth SAUDI ARABIAN GENERAL EDUCATION: THE PRIVATE SECTOR CASE

2 Market Overview Partners in Growth Outline Saudi Education Sector Competitive Considerations Main Players Market Drivers 2 2

3 Market Overview Partners in Growth 3 3

4 4 Saudi Arabia Has The Largest Market For Educational Services In The GCC Region Saudi Education Sector Education is considered as the basis of future socio-economic developments and has the continuous support of GCC governments either through developing public schools or encouraging private initiatives This has led during the past years to an increase in the Education population Based on the latest available Official figures, total number of students in the GCC general education (K-12) are estimated at more than 6 million Saudi Arabia is estimated to account for circa 75% of total students, compared to UAE and Oman 9% and Kuwait 7% Saudi Arabia has the largest number of K-12 schools with some 24,881 establishments Bottom line: Saudi Arabia is an attractive market as it represents the largest education base in the GCC region million NUMBER OF SCHOOLS* IN THE GCC GENERAL EDUCATION NUMBER OF STUDENTS* IN THE GCC GENERAL EDUCATION *Exclude kindergarten 000s *Exclude kindergarten Sources: Local Ministries Of Education, Local Ministries Of Planning, GC Research 4 4

5 Partners in Growth Outline Of The Education System In Saudi Arabia Saudi Education Sector Kindergarten Primary School General Elementary School Certificate Intermediate School Intermediate School Certificate AgeGrade Secondary Education - General Track General Secondary Education Certificate Secondary Education – Religious Religious Institute of Secondary Education Certificate Secondary Education - Technical Track Diploma Al Madaaris Vocational Technical Training Secondary vocational certificate Postsecondary teacher education (Primary, 4 years) Baccaloreus 4 years of study Baccaloreus in Engineering and Veterinary medicine 5 years of study Baccaloreus in engineering and veterinary medicine 4 years of study General diploma in education 1 year Master degree 2 years Master degree 3 years Doctor of Medicine 8 years Doctorate 3 years Propagation Post-Secondary Education for Men University level Doctorate Field of Education only Masters 2 years Baccaloreus 4 years Post-Secondary Education for Women University level Higher institute Diploma 1 year Post-Secondary non-University technical education Technical college certificate 3 years Higher institute for finl and coml sciences, 1 year Certificate of completion 2-3 years General education 5 5

6 Partners in Growth General Education Has The Largest Share In The Sector Saudi Education Sector BREAKDOWN OF STUDENTS BY EDUCATION LEVEL IN SAUDI ARABIA Sources: Ministry Of Education, Ministry Of Higher Education, General Organization For Technical Education, GC Research Kindergarten General Education Elementary Intermediate Secondary Technical education Special education Adult education Other education Higher education Total Share 97,1371.8% 2,417, % 1,071, % 954, % 26,8140.5% 18,9580.4% 87,9781.6% 57,4811.1% 603, % 5,335, % Figures for the year 2005 Bottom line: General education in KSA represents a major investment opportunity with 83% of total students 6 6

7 7 Partners in Growth General Education Has Progressed At Mixed Rates During Past Years Saudi Education Sector The number of students enrolled in the general education has increased during the last 5 years at an average rate of 1.7% The elementary level progressed at 1.1% and the secondary level increased at a solid rate of 5.6%, against only 0.1% for the intermediate level These rates reflect a mixed evolution of enrolled students in the general education The latter is mainly due to the effort of the government to reach the 100% enrollment rate at the elementary level in particular, which translates in lower growth at the intermediate level; this is also accompanied with relatively high drop outs and repetition rates Bottom line: Despite the mixed performance, general education has historically registered prolonged growth 000s EVOLUTION OF NUMBER OF STUDENTS IN THE ELEMENTARY, INTERMEDIATE AND SECONDARY EDUCATION 000s Elementary EducationIntermediate EducationSecondary Education CAGR 1.1% CAGR 0.1% CAGR 5.6% Sources: Ministry Of Planning, Ministry Of Education, GC Research 7 7

8 Partners in Growth Strong Government Budgets Have Accompanied The Development Of General Education Saudi Education Sector The total government appropriations for education reached for the year 2005 around US$ 17.8 billion, with US$ 13.9 billion or 78% for the general education This education budget represents a share of 19% of the annual governmental expenditures estimated at US$ 92 billion and around 5.7% of the gross domestic product Public budget for education progressed during the past 5 years at an annual rate of 6.9% These size indicators, high by international standards, reflect the priority given by KSA to the education sector However, this is accompanied by a relatively high level of drop outs and repetition at all education grades, which reflects a relatively serious internal inefficiency Bottom line: The constant government attention to education is a clear indicator of its support for future growth PUBLIC SPENDING ON EDUCATION Sources: UNDP, Ministry Of Planning, GC Research Public Expenditures On Education / Total Government Expenditure Public Expenditures On Education / Gross Domestic Product Saudi Public Expenditures On Education By Agency 8 8

9 Partners in Growth The Public Sector Remains The Major Player In The Education Sector Saudi Education Sector Out of the 24,881 schools in the general education for the year 2006, the public sector represented 91.6% against 8.4% for the private sector Similarly, the public sector accounted for the majority of the 4.5 million students in 2006 with a share of 92.1%, against 7.9% for the private sector However, the government is willing to increase the private sector participation at all level of the general education as indicated in its actual strategic policies and, in particular, as elaborated in its 10-year plan In fact, the historical evolution of education reflects a rising role of the private sector in delivering educational services Bottom line: The public sector hegemony should progressively, but in limited amplitude, regress in the favor of private sector BREAKDOWN OF PUBLIC-PRIVATE SCHOOLS IN GENERAL EDUCATION BREAKDOWN OF PUBLIC-PRIVATE STUDENTS IN GENERAL EDUCATION Sources: Ministry Of Planning, Ministry Of Education, GC Research 9 9

10 10 Partners in Growth 10 But The Private Sector Is Expanding At Pronounced Rates Saudi Education Sector The total number of students in the private sector reached 356,733 at end-2006, rising at a 5-year CAGR of 6.6% Similarly, the number of private schools reached 2,099 at end-2006 with a 5-year CAGR of 5.1% At these growth levels, the private sector has outpaced the market averages, which were respectively 1.7% and 2.3% The highest growth rates in the number of private schools were registered in the secondary grade with a CAGR of 9.0%, followed by the intermediate grade 4.5% and the elementary grade 3.8% Similarly, the number of students in the secondary grade rose by 15.1%, followed by the elementary 4.0% and the intermediate 3.1% Bottom line: The private sector witnessed relatively high solid growth rates at all educational grades Sources: Ministry Of Planning, GC Research EVOLUTION OF STUDENTS IN THE PRIVATE SECTOR EVOLUTION OF SCHOOLS IN THE PRIVATE SECTOR 1,6342,099 CAGR 5.1% 259,676356,733 CAGR 6.6%

11 Partners in Growth Pronounced Growth In The Private Sector Is Present At All Educational Levels Saudi Education Sector Sources: Ministry Of Planning, GC Research EVOLUTION OF SCHOOLS IN THE PRIVATE SECTOR CAGR 5.1% Elementary CAGR 4.5% Intermediate CAGR 9.0% Secondary EVOLUTION OF STUDENTS IN THE PRIVATE SECTOR CAGR 4.0% Elementary CAGR 3.1% Intermediate CAGR 15.1% Secondary 000s 11

12 Partners in Growth Pronounced Growth In The Private Sector Is Present At The Male And Female Levels Saudi Education Sector Sources: Ministry Of Planning, Ministry Of Education, GC Research EVOLUTION OF SCHOOLS IN THE PRIVATE SECTOR Elementary Male Female CAGR 3.6% CAGR 3.9% Intermediate Male Female CAGR 2.6% CAGR 7.1% Secondary Male Female CAGR 5.8% CAGR 13.8% Elementary Male Female CAGR 4.3% CAGR 3.6% Intermediate Male Female CAGR 1.6% CAGR 6.4% Secondary Male Female CAGR 12.9% CAGR 19.6% EVOLUTION OF STUDENTS IN THE PRIVATE SECTOR (000s) 12

13 Partners in Growth Projected Steady Growth In Demand For General Education Saudi Education Sector The cumulative number of new entrants to the general education during is estimated at 4.5 million students The elementary level will account for around 38.2% of the total, the intermediate 34.2% and the secondary 27.6% New entrants to the general education should progress at an annual rate of 2.2%, during the considered period with the secondary level averaging 2.6% and the elementary and intermediate levels 2.0% These future growth levels remain greater than historical rates which averaged 2.0% for the period These projections are mainly based (1) on the full application of 100% enrollment rate at the elementary level and 95% at the intermediate, (2) on an enhancement of the success rates (repetition rates at 5% for elementary, 7% intermediate and 8% at secondary), (3) on a reduction of drop outs to 1%, (4) on the population growth rate Bottom line: Growth for the overall sector will remain greater than in the past, suggesting further opportunities for the private sector EVOLUTION OF THE NUMBER OF NEW ENTRANTS TO THE GENERAL EDUCATION Sources: Ministry Of Planning, GC Research 000s 969 1,025 1,090 1,0991,125 1,148 1,173 CAGR 2.0% CAGR 2.2% 13

14 Partners in Growth Market Size Estimates Saudi Education Sector We will approximately assess the market size of private schools in Saudi Arabia by estimating the total collected fees The available industry data assume the average private school fees between SAR 4,500 to SAR 20,000 per student In order to narrow our estimate range, we will (1) assume that the highest fees are charged by the largest schools and (2) calculate accordingly the fees for the smaller schools by a relative approach These estimates do not take into account the fact that many schools in Saudi Arabia do not collect their fees properly Our calculations will take into consideration, for the primary, intermediate and secondary, the following: - Industry reports estimate that around 70% of schools have an average fee of SAR 7,000-SAR 20,000 per student - We consider that these 70% of schools correspond to the largest schools and the 30% for the smallest - For the first group we will process to the relative approach with fees of SAR 7,000-20,000 and for the second group with fees of SAR 4,500-7,000 Based on the above, we estimate the annual private school fees at around US$ 1.4 billion and reaches US$ 1.6 billion when including estimates for transportation fees In order to check the accuracy of such calculations we will proceed with an other calculation: - Based on the Ministry Of Education budget for the general education, public spending is at circa US$ 13.9 and, taking into consideration private schools have a share of circa 7.9% of total students, we will have by iteration a market size of US$ 1.2 billion It is worth noting that the latter calculation omits the cost difference considerations of operating public and private schools MARKET SIZE ESTIMATES Based On Fee Calculations Sources: GC Research US$ million US$ 1.4 billion MARKET SIZE ESTIMATES Based On Public Spending Sources: GC Research US$ billion US$ 1.2 billion 14

15 Competitive Considerations Partners in Growth 15

16 Partners in Growth 4 Main Areas To Assess Saudi Private Schools Competitiveness Saudi Education Sector Differentiation is a key competitive advantage in the education market that could explain the actual overall picture of the public-private and private-private competition In the following slides, we shall examine the main domains that reflects lacks of private schools, in particular when compared to public schools Private education in the Kingdom has evolved, in the past, to provide qualitative services, with many private schools having developed and renewed their programs to meet student needs via adopting qualitative educational skills as: IT and enhancing and optimizing the human and financial resources These developments were mainly driven by the government support and by the intensified competition among private schools which increased in number and size However, Saudi private schools present in many cases several dilemmas which are decisive for their sustained competition in the market Bottom line: There are 4 main domains to assess the overall attractiveness of the Saudi private schools: - quality of school infrastructure - qualitative and quantitative selection of the teaching staff - school management evaluation - curriculum and student activities 16

17 Partners in Growth Quality Of Saudi Private School Infrastructure: Need To Build New School Infrastructure (1) Saudi Education Sector The quality of school buildings are an essential tool for differentiation as they represent the basic environment for learning Based on several industry surveys, it is estimated that a large part of private schools in KSA, on average between 55%-65% are not built for education purposes, with some differences across the different regions of the Kingdom Such situation occurred as many private education institutions acquired residential buildings and relatively modified them to meet minimal practical educational requirements These buildings remain below the prerequisites of an ordinary school infrastructure and cause many inconveniences for students, teachers and administrative staff among which we mention: (1) the incapability of principals to control the school as a result of the numerous entries/exits and of the disparate classroom locations, (2) the inconvenient aeration, conditioning, lighting of classrooms Within this context, the Ministry Of Education regularly controls and classifies the schools infrastructure and entail the concerned institutions to meet requirements in a given period of time In fact, many school owners can not afford the minimum required enhancements either via maintaining and improving the building quality or via moving to a new building and, in consequence, are left operating without a license In order to facilitate the building of new infrastructure, the Ministry Of Education provides the private schools with different loans covering up to 50% of the total cost with a 2-year grace period from the start of operations Bottom line: The status of the Saudi private schools points to a relatively high proportion of non-school building requiring on a one hand continuous maintenance funding and on the other the building of new infrastructure Sources: Industry estimates, GC Research BREAKDOWN OF PRIVATE SCHOOLS BY BUILDING TYPE* *Above estimated figures are for secondary private schools BREAKDOWN OF PRIVATE SCHOOLS BY LICENCE AVAILABILITY* Sources: Industry estimates, GC Research *Above estimated figures are for secondary private schools 17

18 Partners in Growth Quality Of Saudi Private School Infrastructure: Relatively Significant Student Concentration (2) Saudi Education Sector Availability of space for students are a complementary basic tool to ensure an adequate educative environment The evaluation of student concentration in private schools reflects some major characteristics combining a relatively low number of pupils per classroom and a relatively low availability of classroom and playground spaces per pupil In fact, for the year 2006, the average number of students per classroom in the private sector is estimated at 19 against an average of 23 in the public sector, with 17.9 for the elementary level, 18.4 for the intermediate and 21.7 for the secondary In parallel, the private establishments in KSA reflect lacks in the availability of spaces where estimates point to a majority of schools having less than 2 sqm of classroom spaces per pupil and less than 5 sqm of playgrounds and recreational areas per pupil These low levels of available spaces per student are mainly related to the Ministry Of Education regulations which, instead of linking between the available areas and the number of students, specify the minimum required overall classroom space and the minimum required overall outdoor space Within such a context, a private school should combine between the both absolute and relative availability of space Bottom line: Despite a low number of pupils per classroom, Saudi private schools are widely lacking indoor and outdoor space for students which will need further expansions with the increased competition Sources: Ministry Of Education, GC Research NUMBER OF STUDENTS PER CLASSROOM Sources: Industry estimates, GC Research PRIVATE SCHOOLS BY CLASSROOM AREA *Above estimated figures are for secondary private schools Sources: Industry estimates, GC Research *Above estimated figures are for secondary private schools PRIVATE SCHOOLS BY OUTDOOR AREA 18

19 Partners in Growth Quality Of Saudi Private School Infrastructure: Selected Inefficiencies In The Usage Of Education Equipments And Tools (3) Saudi Education Sector The qualitative and quantitative usage of educational equipments and tools in private schools are essential as they are considered as a major practical mean for the overall education program At the level of the KSA, libraries are widely present in private schools with estimates pointing to an average close to 100% However, some inefficiencies in managing these libraries are present: a number of schools especially in Riyadh have a student age-book mismatch along with a low quality in the library infrastructure and full-time personnel At the level of the laboratory availability, based on several Industry estimates and on our visits to schools, it is widely agreed that more than 90% of private schools have a laboratory However, when differentiating between different types of laboratories, the availability of laboratories with adequate equipments vary and an efficient usage of these tools relatively lacks in many cases In fact, when we consider separately the physics, chemistry and biology laboratories, the overall availability ratio reached on average less than two third of the schools along with some lacks at the level of full-time personnel Bottom line: Education equipments and tools, which are considered a source of differentiation for any competing private school, present some efficiency and quantitative lacks in a number of private schools Sources: Industry estimates, GC Research LIBRARY QUALITY IN PRIVATE SCHOOLS *Above estimated figures are for secondary private schools Sources: Industry estimates, GC Research PHYSICS, CHEMISTRY AND BIOLOGY LABORATORIES *Above estimated figures are for secondary private schools Sources: Industry estimates, GC Research *Above estimated figures are for secondary private schools CIVIL DEFENSE APPROVAL 19

20 Partners in Growth Quality-Quantity Issue Of The Teaching Staff: Existence Of A Relatively Low-Waged Non-Saudi Teacher Base (1) Saudi Education Sector The qualitative and quantitative availability of the teaching staff plays an essential role in a private school competitiveness Based on the 2006 statistics we gathered from the Ministry Of Education, it appears that private schools have in relative terms slightly more teachers than the public sector The student-to-teacher coverage ratio averaged 10.8 in the private sector compared to 11.2 in the public sector Furthermore, a breakdown of teachers by nationality show that private schools have on average of 52% non-Saudis compared to only 2.8% in the public sector In fact, as the private schools are profit-driven, they tend to: - hire more non-Saudis which have relatively lower wage requirements - hire less Saudis because of the higher wage they can have in the public sector Bottom line: Regarding the quantitative issue, private schools tend to hire relatively more teachers, with emphasis on non-Saudis which have in general relatively lower wage requirements than the Saudis SUDENT-TO-TEACHER COVERAGE RATIO BREAKDOWN OF TEACHERS BY NATIONALITY IN PRIVATE SCHOOLS Sources: Ministry Of Planning, Ministry Of Education, GC Research 20

21 Partners in Growth Quality-Quantity Issue Of The Teaching Staff: Need For Better Teacher Evaluation And Selection (2) Saudi Education Sector Regarding the qualitative issue, private schools present a dilemma: (1) the non-Saudis are constantly looking for better prospects elsewhere (2) hiring in return Saudis has its own inconveniences as they have less competencies and tend ultimately to go to the public sector In consequence, this leads to higher teacher turnover and negatively impacts the accumulation of experience and homogeneity within the considered private school with all its spillover effects on output Also, it is worth noting that private schools have flexibility in choosing and hiring teachers and releasing the non performing ones According to estimates, private schools did not profit from this flexibility and have not hired the best teachers In fact, industry surveys do not reflect pronounced difference between teacher performance in private and public schools This is mainly due (1) to the lack of specialized staff, within the school, capable of evaluating the teachers and (2) to the lack of care on the behalf of the school owner Bottom line: The private schools in Saudi Arabia do not relatively hire the better performing teachers, which can negatively affect the overall school competitiveness TEACHER PERFORMANCE IN PRIVATE AND PUBLIC SCHOOLS Based On Test Results For Teachers (Grades 0 to 100) Sources: Industry estimates, GC Research 21

22 Partners in Growth School Management Evaluation: Selected Conflicts Are Current Between Principal And School Owners (1) The principals status and the school owners status are decisive in the private sector The school principal plays an essential role in the education process and it is crucial to retain him the longest period of time It is widely believed that such permanent status (1) guarantees the stability of the ongoing school educational policy, (2) better assess the pros and cons of the school, (3) better understand the needs of the students, (4) better evaluate the teachers In parallel, it is highly important to assess the relationship between the principal and the school owner, as the former represents the link between the latter and the school management team It is commonly recognized that school owners oppose selected principal recommendations, in particular as these decisions are frequently against the owners personal interests For example, despite that school owners do not interfere in the principals function, the appointment of teachers by the principal is opposed in 45% of cases because: - the principal chooses the teachers based on competency, skills and experience - the school owners prefer to hire non resident teachers as they require lower wages than residents Bottom line: The principal-school owner relationships reflect, in many cases, fundamental conflicts in interest Saudi Education Sector Sources: Industry estimates, GC Research SCHOOL OWNERS DO PROVIDE ESSENTIAL EQUIPMENTS OWNERS OBJECT THE RECOMMENDED TEACHER APPOINTMENTS Sources: Industry estimates, GC Research PRINCIPAL DECISIONS IN CONFLICT WITH OWNERS INTERESTS 22

23 Partners in Growth School Management Evaluation: Educational Supervision Reflects Some Lacks And Inefficiencies (2) A pronounced number of private schools in KSA, estimated to a 1/3, are believed to lack a specialized educational supervision team In fact, regulations do not stipulate the existence of such supervision but the Ministry Of Education, as part of its continuous evaluation and supervision of schools, affects a budget in this respect In the remaining 2/3 schools, it is widely believed that, in more than 80% of the cases, the available education supervisors (1) meet weekly with the school management, (2) attend teacher courses, (3) present reports on the school operations, (4) supervise the application of their own remarks However, the supervision efficiency remains mixed with only 60% of the considered schools find that the educational supervisor (1) supplies schools with new educational developments, (2) supplies schools with selected furniture, (3) generalizes the inter-teacher visits in the school, (4) increase the teacher qualifications via conferences and researches, (5) sets criteria for educational supervision Furthermore, a large number of schools, estimated at a 1/3, consider the educational supervisor visits insufficient to solve the assessed difficulties and to evaluate the available specializations, with some 2/3 of schools recognizing that the visits supply the education establishments with knowledge and know-how Bottom line: The educational supervision, which is an integral part of assessing and controlling school performance, lacks in a non-negligible number of private schools in KSA and remains inefficient in many cases Saudi Education Sector EXISTENCE OF AN EDUCATIONAL SUPERVISION TEAM Sources: Industry estimates, GC Research BREAKDOWN OF SUPERVISION TEAM BY STATUS Sources: Industry estimates, GC Research BREAKDOWN OF SUPERVISION TEAM BY EFFICIENCY Sources: Industry estimates, GC Research 23

24 Partners in Growth School Management Evaluation: Teacher Wages Are Key In The Cost- Performance Tradeoff For Private Schools (3) The level of teacher wages has a crucial impact on the quality of the delivered educational services In Saudi Arabia, the majority of teachers in private schools are non nationals and have wages relatively low when compared to the public sector Such situation constrain teachers to considerably resort to private lessons or accept additional jobs Based on a industry estimates, the majority of principals recognize that teachers consider their wages as insufficient and clearly appear unsatisfied by the situation Therefore, it is believed these low revenues highly impact the teacher performances Bottom line: The teacher wages in Saudi private schools are in most cases relatively low which impacts negatively the school overall output and competitiveness Saudi Education Sector TEACHERS HAVE LOW AGES (Principals View) Sources: Industry estimates, GC Research TEACHERS ARE UNSATISFIED (Principals View) WAGES AFFECT PERFORMANCE (Principals View) Sources: Industry estimates, GC Research 24

25 Partners in Growth School Management Evaluation: Lack Of Selected Student Discipline (4) Private schools in Saudi Arabia present a lack of student discipline in particular at the secondary level when compared to the public sector In fact, it is considered that on average 45% of secondary schools present a problem with (1) irregular presence at school, (2) high student disturbance, which (3) affect the teacher performance Such situations are present despite that the majority of the principals (1) do not accept repeating exams, (2) seek to ensure equal student opportunities, (3) go through parent complaints Furthermore, secondary education in private schools reflect some lenience in exams and tests In fact, despite the availability of competent staff for supervising tests, more than 50% of considered schools have cases where teachers overlook cheatings and deliberately give additional grades Also, it is worth mentioning that, in general, students tend to remain in the same school for the longer possible period of time Bottom line: As the reputation of any private school goes along with its own discipline, it is essential to consider enhancements at this level Saudi Education Sector LACK OF STUDENT DISCIPLINE (Principals View) Sources: Industry estimates, GC Research PRINCIPAL SEVERITY (Principals View) TEACHERS SEVERITY IN EXAMS (Principals View) Sources: Industry estimates, GC Research 25

26 Partners in Growth Curriculum And Students Activities: A Needed Differentiation For Private Schools The private schools have historically been considered as the duplicates of the public schools as they delivered the same core curriculum This has been a main obstacle for the attractiveness of private schools, especially that they impose fees for supplying the same services than the public sector However, private schools used to differentiate by providing some additional services for students as sportive activities, arts, scouts, theatre, science and some supplementary courses These services are in many cases inefficiently provided and are a burden on the students already intense curriculum courses But, if private schools aim to further compete with the public sector, more improvements must be made at the level of the curriculum taught In fact, the Ministry of Education has allowed, during the past 2-3 years, private schools to adopt the international curriculum and began, in this respect, to grant the related licenses This initiative is expected to trigger investments in the private education as the quality of delivered services will be enhanced Bottom line: The Ministry of Education licenses for international curriculum should build on actual competitive advantages to further the private education role Saudi Education Sector MAIN QUALITY DRIVERS FOR FUTURE PRIVATE EDUCATION ATTRACTIVENESS Better quality-fee ratio International curriculum Special care given to students Better education level in many schools Additional services and activities Some better teaching staff Bigger potential in delivering education Availability and better hiring of teachers 26

27 Partners in Growth Main Considerations For Evaluating A Private School Saudi Education Sector Available space to number of students School building Available classroom spaces Available security tools Aeration, conditioning, lighting Available rooms for supervisory, teaching and admin. staff Toilets Indoor and outdoor spaces Available space for laboratories, libraries, sports, various act. Simple and adequate design of the buildings Availability of communication tools School seats and age/quality requirements Classrooms, libraries and laboratories Basic teaching tools in classrooms Adequate laboratories at education levels Rooms for various activities Other infrastructure Theatre Rooms for different teaching and technical activities Available stocks for teaching tools Cafeterias and health requirements Sport infrastructure with adequate equipments Available health infrastructure Parking for buses and cars Adequate laboratory tools and equipments Safety tools in labs Basic books in libraries Absorptive library capacity IT equipments Efficiency in using the school infrastructure as buildings, laboratories, libraries and others School management Info on school ownership Info on school BOD or management team Management-staff interaction School owner functions and roles Responsibility and function sharing system Supervisor availability, qualifications and role Principals nationality, competency and experience Staffs nationality, competency and experience Performance reports on the administrative staff Quantitative and qualitative aspect of admin. staff Overall wage and remuneration status Teaching staff Absolute and relative number of teachers Overall course burden per teacher Nationality, experience, qualifications of teachers Teachers activities beside teaching Performance of teachers Remuneration of teachers Availability of laboratory, library and IT specialists Qualification, experience and performance of these specialists Students Number of students and school absorptive capacity Student concentration indoor and outdoor Repetition and success rates Average years of students in school Overall performance of the school students Scholarships Student treatment and progress reports Bottom line: In the majority of the below items, private schools do not offer relatively better services to clearly boost a migration from public to private sector Overall performance of students relative to other schools 27

28 Main Players Partners in Growth 28

29 Partners in Growth Organizational Summary Of Education In Saudi Arabia Saudi Education Sector Ministry of Education Ministry of Higher Education General Establishment of Technical Education and Vocational Training Ministry of Civil Service Ministry of Health and Saudi Commission for Health Specialties Ministry of Defense and Aviation Ministry of Interior Royal Commission for Jubail and Yanbu Education Bodies General education supervises Day schools with the 3 educational levels: Primary, intermediate and secondary Night schools Quran memorization schools Arabic language education schools for non-Arabic speakers English language schools and institutes Calligraphy institutes Type Of Private Schools Supported by The Ministry 1, General education 333,109 9,398 14,226 SchoolsStudents Management School principal School deputy Clerk Typist Administrative cadre Technical cadre Teachers Student advisor Educational supervisor Librarian Laboratory technicians Principals for 2,099 schools 33,146 teachers 4,047 administrative staff 29

30 Partners in Growth Overview Of Private School Statistics In General Education Saudi Education Sector Education Aggregates 2006 figures Education Ratios 2006 figures 30

31 Partners in Growth The Geographic Concentration Of Private Schools Is In Big Regions Saudi Education Sector At the mirror image of the overall population, the private schools and students are relatively concentrated in the highest populated regions The regions of Riyadh, Makkah, Eastern Province and Madinah account for 87.2% and 90.4% of private schools and students respectively, compared to a population concentration of 71% This suggests that some regions are highly supplied with educational services relatively to other low populated regions Furthermore, we estimate the number of schools per 100,000 inhabitants in KSA is at around 6.0 with the largest 4 regions averaging 10.3 Bottom line: The degree of student and school concentration is in line with our perception that peripheral regions arent attractive for private investments given the low level of population Sources: GC Research PRIVATE SCHOOL AND POPULATION DISTRIBUTION Riyadh Makkah Eastern Madinah Tabuk Qassim Asseer Hail Jouf Northern 36.7% 30.3% 15.5% 4.8% 2.1% 4.1% 3.0% 0.9% 1.3% 0.5% Jizan Najran Baha 0.3% 0.4% 0.1% 24.1% 25.6% 14.8% 6.7% 3.0% 4.5% 7.4% 2.3% 1.6% 1.2% 5.2% 1.8% 1.7% Population distribution Private school distribution 12.6% 4.8% 0.7% -1.9% -1.0% -0.3% -4.4% -1.4% -0.3% -0.7% -4.9% -1.5% -1.6% Difference NUMBER OF PRIVATE SCHOOLS PER 100,000 INHABITANTS Sources: GC Research Average 6.0 schools per 100,000 inhabitants 31

32 Partners in Growth Degree Of Market Concentration And Fragmentation In The General Education (1) Saudi Education Sector In order to assess the degree of concentration/fragmentation of the general education market, we will proceed to: - a calculation of the top schools market shares in the corresponding segments - a calculation of the Herfindahl-Hirschman Index which sums (1) the sum of the squared differential between the individual school market shares and the average school market share (2) the average market share of the schools In fact, the latter indicator takes into consideration the absolute and relative size of schools to determine the degree of concentration of the market with: - a ratio of 100% for the monopoly status - a ratio of 0% for the infinite competition status The explanation of the above indicators is: - the higher value of the largest schools market shares is an indicator of higher concentration of students in top schools - the higher value of the HH index is an indicator of the lower degree of fragmentation of the general education market Bottom line: The combination of the concentration and the fragmentation indicators will reflect the potential of consolidation in the Saudi general education market via school merging and/or school expansions 32

33 Partners in Growth Degree Of Market Concentration And Fragmentation In The Private General Education (2) Saudi Education Sector Conclusions - Fragmentation is very high - Student concentration in top schools is high - Low grades are the most fragmented - Male schools are the most fragmented Day schools - Concentration is higher in female schools Quran memorization schools - Relatively low fragmentation, in particular in female schools - High concentration at different levels, except intermediate male Night schools - Low fragmentation compared to day schools - Mixed concentration rates Bottom line: Day schools represent a potential for consolidation as indicators show a relatively high number of schools with low market shares 33

34 Partners in Growth Major Male Day Schools At The Primary Level Saudi Education Sector SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Admin. 34

35 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Male Quran Memorization Schools At The Primary Level Saudi Education Sector 35

36 36 SchoolCityStudents % share students Class- rooms Teach. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Major Male Day Schools At The Intermediate Level Saudi Education Sector 36

37 SchoolCityStudents % share students Class- rooms Teach. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Male Night Schools At The Intermediate Level Saudi Education Sector 37

38 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Male Quran Memorization Schools At The Intermediate Level Saudi Education Sector 38

39 39 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Major Male Day Schools At The Secondary Level Saudi Education Sector 39

40 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Male Night Schools At The Secondary Level Saudi Education Sector 40

41 41 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Major Female Day Schools At The Primary Level Saudi Education Sector 41

42 SchoolCityStudents % share students Class- rooms Teach. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Female Quran Memorization Schools At The Primary Level Saudi Education Sector 42

43 43 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Major Female Day Schools At The Intermediate Level Saudi Education Sector 43

44 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Female Quran Memorization Day Schools At The Intermediate Level Saudi Education Sector 44

45 45 SchoolCityStudents % share students Class- rooms Teach. Admin. SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Major Female Day Schools At The Secondary Level Saudi Education Sector 45

46 SchoolCityStudents % share students Class- rooms Teach. Partners in Growth Female Quran Memorization Day Schools At The Secondary Level Saudi Education Sector 46

47 47 Partners in Growth Saudi Education Sector Valuation For Regional And Global Companies In The Education Sector Sources: Reuters, GC Research 47

48 Market Drivers Partners in Growth 48

49 Partners in Growth Demand Drivers: Population Growth DEMOGRAPHIC STATISTICS Demographics, via changes in population volume and structure, are a major determinant of demand for education Saudi population will be growing during the coming 10 years at an average rate of around 2.5% and over the next 30 years at an average of circa 2.1% In absolute terms, the age segment of 5-19 will be growing at 2.0% and 1.5% over the next 10 and 30 years respectively In relative terms, the share of the 5-19 year-segment in total population will decline from an actual 35.4% to 33.7% in 2010 and 29.6% in 2035 Bottom line: Demographics reflect a sustained growth opportunities for the private sector as there will be more demand for education and in particular for the most skilled and productive labor areas 30-y Population Forecasted Growth Forecasted CAGR Of Young Population (5-15 years) Dependency Ratios (5-15y/0-5 and 15+) Sources: World bank, GC Research Saudi Education Sector 49

50 Partners in Growth Demand Drivers: Income Levels GDP AND INCOME STATISTICS Sources: IMF, GC Research Saudi citizens are present in a burgeoning economy, with strong growth and increased wealth Everything being equal, such trend results in an increased demand for education in quantity and quality During the last 4 years, the Saudi economy averaged a real GDP growth rate of 6.0% and a cumulative nominal GDP growth rate of 85% As a result, the average GDP per capita in Saudi Arabia have grown at a 4-y CAGR of 13.8% Bottom line: Saudi citizens can increasingly spend on education and afford more costly and qualitative services, which translate in a prolonged demand for private sector Sources: IMF, GC Research Real GDP Growth Rates Nominal GDP Per Capita Growth Rates Nominal GDP Cumulative Growth Rates Saudi Education Sector 50

51 Partners in Growth Supply Drivers: Internal Efficiency GOVERNMENT TARGETS IN SUCCESS RATES Sources: Ministry Of Planning, GC Research The Saudi general education reflects an internal inefficiency marked by an inadequacy between the inputs and the outputs At the level of inputs, as reflected in a previous slide, the government has a relatively high budget for education, in particular when compared to developing and developed countries Such inputs are not met with satisfactory outputs which reflect high drop out rates and repetition in the schools along with a relative weakness of graduates academic standards Bottom line: The need for more efficiency can benefit from the private sector capability to ensure the most qualitative services in an optimized way Saudi Education Sector Reducing drop out to 1% at all stages Eighth Development Plan Targets ( ) Reducing repetition rate to 5% at the elementary stage Reducing repetition rate to 7% at the intermediate stage Reducing repetition rate to 8% at the intermediate stage 51

52 Partners in Growth Supply Drivers: External Efficiency The Saudi general education reflects an external inefficiency marked by an inadequacy between its outputs and the needs of the economy and the society for various skills At the level of the society, an effective education system should prepare students to create and achieve comprehensive social development for the community via forming highly skilled workforce At the level of the economy, the Kingdom actually requires a considerable number of skills and scientific specializations This entails proper preparation of students in the different fields of maths, sciences, languages and information technology Bottom line: The private sector can play an increased role in delivering the best services with the most developed techniques to meet the economy and, ultimately, labor market needs Saudi Education Sector 52

53 Partners in Growth Supply Drivers: Government Vision Sources: Ministry of Education 10-year plan, GC Research Saudi Education Sector The Ministry Of Education has developed a 10-year plan for the period with clear goals and objectives aiming at enhancing the education with the most practical and scientific means In particular, it has set a list 16 goals which we break down below by the number of objectives affected for each goal: 53

54 Partners in Growth


Download ppt "Partners in Growth SAUDI ARABIAN GENERAL EDUCATION: THE PRIVATE SECTOR CASE."

Similar presentations


Ads by Google