The Middle East's Fertile Ground

European business schools are expanding their offerings in the Mideast region, whose booming economy is raising demand for management education

For companies based or operating in the Middle East, uprooting executives and educating them abroad is no longer the preferred option. Increasingly, top business schools, many of them based in Europe, are putting down roots in the Arab world to gain a part of the emerging business education market in the Middle East.

Within the last two years, schools such as INSEAD, the University of Manchester, and London Business School (LBS) have set up full-time education centers in the region. And there are more on the way.

Many of the programs are executive education courses, short-term nondegree programs designed to bring managers up to speed in particular areas of study. In March, Oxford's Said Business School announced plans for an advanced management program in Saudi Arabia, while Cambridge will begin a program for 700 Abu Dhabi civil service workers in April. HEC School of Management in Paris and Instituto de Empresa (IE) in Madrid are both finalizing agreements for extensive programs in Saudi Arabia.

Stay-at-Home Trend

With a booming economy, the region now has the resources and demand to bring quality education closer to home. "It's all well and good to go to London and Paris and New York for an executive program, but as the Middle East develops a bigger management pool, you are not going to send your middle managers to New York," says INSEAD professor Randel Carlock, who taught a course in Abu Dhabi in February.

The trend is also being reflected in the composition of students who are taking the Graduate Management Admission Test. According to the Graduate Management Admission Council, which administers the test, schools in the Middle East, including Israel, drew nearly 42% of their domestic pool in the 2007 testing year, up more than 5% from the 2003 testing year. In 2007, the United Arab Emirates appeared for the first time among the top 10 countries by school location for Middle Eastern citizens.

While international expansion is nothing new—U.S. and European schools have been aggressively expanding programs in Asia—European programs have a number of ready-made advantages in the Arab world. One is physical proximity. Another is simmering anti-American feeling in parts of the region. Still, U.S. schools, including Penn's Wharton and Carnegie Mellon's Tepper School of Business, have opened programs in the region.

Schools Get Extensive Help

For the host countries, business programs are a sure sign of economic coming of age; hence the strong competition in the region to attract programs. For instance, when students attend Cass Business School's year-old executive MBA specialization in Islamic finance, the Dubai International Financial Center (DIFC) offers participants a 25% tuition scholarship. In addition to Cass, schools such as LBS and Canada's Queen's University, which are also located at the DIFC, are provided with free economic zone perks such as tax breaks and freedom from foreign ownership rules as Dubai strives to hit education quotas. Abu Dhabi also offers a free economic zone with similar benefits.

Besides the lucrative tax breaks, Faten Hani, the CEO of the Education Center at the DIFC, says the organization helps with marketing Dubai's international business programs, a significant startup cost for executive education programs. In addition, the organization also helps connect B-schools with companies and accompanies schools on corporate visits. Because of the support, Hani says, schools can just "come in and do their job" without getting bogged down trying to attract participants. It's also a way for schools to quickly meet the demand. "There are so many areas where we need help, the more [schools] the better," says Hani, whose office aims to attract the flagship programs of top universities.

Financial perks are just one of the factors schools are considering for their programs. For example, INSEAD decided on Abu Dhabi to be more "focused on the Arab world," says Carlock, who notes that Dubai programs tend to draw more expatriates.

HEC Senior Associate Dean Jean-Paul Larcon says the school's program is planned for Saudi Arabia for the same reason, and that it expects its classes to be "100% Arab."

Bridging the Cultural Divide

One of the challenges facing the European schools is translating their programs to the needs of a Middle Eastern clientele. INSEAD is building programs around family business. IE is discussing the possibility of establishing a longer executive education program aimed at Saudi women, a demographic that remains underserved. "We try to be original and fulfill the needs that are there," says Javier Amezaga, IE's director of development for the Middle East and Africa.

Another issue is the cultural divide. For the start of Oxford's advanced management program in December, the faculty will attend an orientation where representatives from the Saudi Embassy and the university's Center for Islamic Studies will make presentations, says Program Director Lalit Johri. Additionally, Johri's team will write eight case studies to help customize the program. Other B-schools take a different approach to bridge the cultural divide by partnering with local universities when expanding their presence in the Arab world. For schools that lease space at the DIFC, Hani says that her office helps guide professors on understanding the Arab world.

Even though the Middle East's business education market is much smaller than Asia's, European business schools say their efforts resemble that of their initial forays into Asia. Soumitra Dutta, INSEAD's dean of external relations, says the competition in the Middle East is just beginning and recalls that the school spent 15 years in Asia before opening a full-fledged Singapore campus. "We don't have that strong or long a presence in the Middle East; it's been a relatively low level of engagement," he says. However, he hopes the school will establish a position similar to that in Asia within the next decade.

Zeger Degraeve, faculty director of LBS's Dubai program, sees advantages to being an early player in a growing region. "More competitors will increase the awareness of business education in the region," Degraeve says. "We still enjoy a first-move advantage."

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