This is a best prospect industry sector for this country. Includes a market overview and trade data.
The Saudi Arabian government (SAG) allocated over USD 53 billion dollars in its 2017 budget for education and human resource development, the second-largest allocation (22.5 percent) of budgeted expenditures after military and security services/regional administration. This allocation supports SAG efforts to increase the labor participation rate of Saudi nationals in the local economy and reduce unemployment. Focus areas include: youth and female employment assistance, SME development, and enhancing productivity and technical skills necessary for a diversified economy. Components of the Ministry of Education’s budget include: public education, higher education and training, new projects, and expansion of existing projects such as:
King Abdullah Bin Abdulaziz Public Education Development Project
1,376 educational facilities and schools (411 new schools completed in 2016)
Renovation of female colleges across different universities
National Transformation Program (NTP) initiatives related to the sector
Saudi Arabia remains a promising market for U.S. colleges and universities seeking to recruit and attract international students. Over the last decade, Saudi Arabia has become the fourth-largest source of international students studying at the post-secondary level in the United States. Recently, however, due to the government’s increased drive to create opportunities for Saudi’s growing youth population (Saudization), there is enhanced interest in the provision of vocational and technical training in-country. The government’s efforts to build several new technical and vocational institutions reflects this desire.
“Saudization” is a SAG-mandated program to replace foreign workers with trained Saudi workers gradually. The program is expected to create increased opportunities for institutions and organizations engaged in workforce training, particularly skills and vocational training and development. Saudi job seekers previously sought mainly mid- or high-level positions within the private and public sectors, especially managerial positions. However, Saudis are increasingly willing to accept jobs at all levels, given economic challenges associated with high population growth and unemployment.
Vision 2030 and the NTP are aimed at diversifying the economy and reducing Saudi’s dependence on oil. All parts of the economy and society are expected to play a role in realizing the objectives of the program, including through public-private partnerships (PPP). Spending on NTP initiatives largely fall under the budgeted allocations of Education, Municipality Services and Public Administration. A key pillar of the transformation program involves developing Saudi’s human competency through improved education and training and by creating well-paying jobs in the private sector. Towards this end, the government plans to create 450,000 jobs in the non-government sector by 2020.
The Ministry of Education aims is to close the gap between the output of higher education (graduates) and Saudi job market requirements. By 2030, Saudi Arabia hopes that five of its universities will rank amongst the top 200 universities worldwide. In addition, by 2030, Saudi students are expected to achieve results that exceed international education averages.
One of the challenges of understanding the Saudi education and training system is the diversity of this large country, with many scattered villages and uneven resources. Another challenge sometimes faced by U.S. visitors is the comparatively difficult process of obtaining Saudi visas. U.S. visitors are encouraged to contact the Saudi Embassy in Washington, DC to familiarize themselves with the visa requirements and process.
Although it is possible for foreign companies to set up in Saudi Arabia without a partner, it is recommended that any U.S. company wishing to enter the Saudi market appoint a local agent or do so in agreement with a Saudi partnership or joint venture. New-to-market organizations are strongly advised to visit the country. Contact can initially be made with one or more training institutions. A joint venture with an institution would be a good entry method into the Saudi market. Also, offering short courses or seminars through an institution could be a good way to get a glimpse of the market.
The Saudi market can be very sensitive to course material content. U.S. companies are encouraged to familiarize themselves with Saudi traditions, customs, and strict observances of the Islamic faith to ensure that course materials do not unintentionally offend local norms and practices.
Vocational and Technical Training
There is a dynamic market for technical and administrative training in Saudi Arabia. Graduates of training programs in healthcare, agriculture and teaching are steadily filling professional positions throughout the country.
Most of Saudi Arabia’s vocational training centers are operated by the Ministry of Labor (MoL) and the Ministry of Education and follow the PPP model such as the case with the National Power Academy (NPA), National Maritime Academy (NMA), and National Aviation Academy (NAA), with several of the major Saudi companies such as Saudi Aramco, SABIC and Saudi Airlines being key stakeholders in these institutes.
The Institute for Public Administration, established in 1961 as a semi-independent public agency, provides basic training for civil servants through branches in Dammam and Jeddah, and a special branch in Riyadh for training women. It offers courses in administration, law, accounting, computer science, maintenance, personnel management, secretarial skills and management planning.
Several organizations, both government and private, are enhancing existing employee training courses with an emphasis on business, management, technical and language training. These efforts, however, are not fully addressing the demand and need assistance to fulfill their government mandate.
Opportunities in the Saudi market can be found in English language programs for professional development with focus on “Technical English” curricula as well as hands-on training in specializations such as machine tooling, metalworking, electro-mechanics and auto mechanics. The government’s priority is to provide young Saudis with skills that are in high demand and courses that are specifically tailored to meet the needs of industry and the unemployed. The most popular courses include computer technology, computer programming, technical and vocational training, office management, accounting and financial management, and marketing and sales. Opportunities in the Saudi market also include short and long-term training in pilot training and aviation maintenance. In addition, training in the medical field, such as in nursing, x-ray technician, emergency aviation, medical assistant, pharmacy and medical sciences (at both undergraduate and postgraduate levels) are in high demand.
The government approved a strategy to privatize 14 vital sectors and generate 35-40 billion riyals (USD 9 billion to USD 11 billion). In April 2018, Saudi authorities have ordered the transfer of 25 state-run schools to the private sector as part of the government’s economic reforms to ease the pressure on the state’s finances. A Saudi official overseeing the process said school buildings would be transferred in some of the first deals. The Ministry of Education announced a tender for long-term concessions to design, build, finance, and maintain facilities for 60 schools around the Kingdom.
With the official removal of the driving ban on women in the Kingdomas of June 24, 2018, the need for specialized driving schools for females has become an emerging opportunity. Several carmakers and other training companies in Saudi have already established driving schools for women, and several others are being planned for the next few years. According to the Financial Times, there had been over 165,000 female applicants to the Kingdom’s first female driving school in January 2018, with the demand outnumbering supply for the time being.
Distance learning is also becoming a very popular option in Saudi Arabia. Students are now increasingly interested in taking distance courses with reputable educational institutions in the United States. In addition, existing Saudi colleges see it as an opportunity to form a connection with U.S. institutions, which could result in accredited Saudi/U.S. qualifications. Frequently, government and private sector employers also require technical courses tailored to their specific needs.
U.S. training and educational institutions can successfully compete in the provision of English language courses, particularly “Technical English”, vocational and technical training, business management, accounting, and computer operation and management courses. Training can be provided by visiting professionals, consultants, and/or through the development of training materials and curricula in collaboration with local educational and technical and vocational training institutions. Many Saudi organizations also value the quality and recognition of short-term courses held provided by United States institutions.
There is tough competition for companies from the U.S., UK, Australia, New Zealand and Japan. Saudi training experts are sometimes invited to visit the UK and to provide presentations to groups of educational organizations interested in entering the Saudi market. The British, Australian and Japanese governments offer scholarships to Saudi government officials to attend courses specializing in management, business skills development, and other suitable courses. However, because the American education system is widely considered to be superior, U.S. training institutions and organizations have an advantage entering and operating in the Saudi market. A few U.S. training programs, franchises and U.S. universities have already entered the Saudi market. Other training joint ventures and partnerships are under discussion between American and Saudi organizations.
The Technical and Vocational Training Corporation (TVTC), which falls under the jurisdiction of the Ministry of Labor (MoL), oversees the Saudi national technical and vocational training programs, and carries out workforce development through technical colleges, industrial institutes and Colleges of Excellence. These industrial training organizations provide vocational education to high school students to meet the needs of the labor market in technical specialties and are a growing alternative to traditional university programs and degrees.
The government-owned and newly-established Colleges of Excellence program provides courses designed in consultation with the private sector to develop skills needed for the local job market. Courses encompass: business administration, hospitality and tourism, fashion and beauty, and IT and electrical technology.
MoL and the Human Resources Development Fund (HRDF) are also key players in this sector. The MoL is driving the expansion of technical education outside the university system through several subsidiaries including the HRDF and Takamol, which is the MoL’s vehicle for public-private partnerships. HRDF provides qualified manpower to the private sector by funding training programs that fit the needs of the labor market and by publishing studies that address barriers to employment. These programs include job placement centers, job fairs, online training platforms, and job preparation programs.
Saudi Aramco, Saudi Basic Industries Corporation (SABIC), the regional offices of the Saudi Electric Company (SEC), Saudi Arabian Airlines, the Saline Water Conversion Company (SWCC), the Royal Commission for Jubail and Yanbu, several branches of the military and large organizations such as banks have been providing training to their employees. These organizations have their own training centers. They also constitute the largest users of U.S. and European training packages. In addition, some of these companies and organizations contract out some of their training needs, which cannot be handled in-house.
Private sector companies also provide training for their employees. Those companies usually set a limited budget for training purposes. When training is essential, they typically train in-house, or use the services of local training facilities that can provide training as needed.
The following trade events in Saudi Arabia offer excellent opportunities for U.S. vocational and technical training and educational institutions:
International Conference on Science Engineering & Technology (ICSET)
Date: August 15-16, 2018
International Conference on Social Science and Humanities (ICSSH)
Date: September 13-14, 2018
Higher Education & Career Fair (HECF)
Date: September 28-29, 2018
Linden Educational Services Fair
Date: October 17, 2018
Access MBA One-to-One Event
Date: November 20, 2018
International Exhibition & Conference on Higher Education (IECHE)
Date: April 2019 (TBD)
For more information, contact the following Commercial Specialists at the U.S. Commercial Service in Saudi Arabia:
Tareq Ghazal, U.S. Consulate General Dhahran, Email: Tareq.Ghazal@trade.gov, Tel: +966-13-330-3200, Ext 3147
Zaina Konbaz, U.S. Embassy Riyadh, Email: Zaina.Konbaz@trade.gov, Tel: +966-11-488-3800, Ext 4119