KSA: Rising demand for quality education providers
The Kingdom of Saudi Arabia (KSA’s) 2016 budget projects a spending of 840 billion riyals, while the revenues are forecasted at 514 billion riyals. It is noteworthy that the budget allocates 191 billion riyals to education. The allocation of such nature clearly depicts that the budget prioritizes education and development funds, thereby not letting the oil prices affect the welfare-centric vision of KSA.
Such human resource development focused decision making for 2016 budget allocation can also be directly linked to the idea of Saudization which KSA aims to promote and execute at a larger scale. For instance, the Technical and Vocational Training Corporation (TVTC) recommended Saudization of 150 professions in the coming three years.
According to the IMF, expatriate workers are currently about a quarter of KSA’s total population of some 30 million, and about three-quarters of the private-sector workforce, of which 85% is deemed to be low-skilled. Thus it is essential for the KSA to equip its youth with the required skills as opening up of any market, especially of financial nature requires quality people.
Additionally, KSA is grappling with falling income from oil as government revenue, mainly from oil, fell nearly a third to 715 billion Saudi riyals ($190 billion) last year and the trend is expected to continue this year as well. This phenomenon clearly exhibits that there shouldn’t be any over reliance of KSA on the oil and gas sector, thus creating an urgency to develop a pool of skilled, knowledgeable workers who play a key role in economic sustenance and revival.
The Gulf region is expected to create 600,000 jobs for nationals by 2019, but those jobs will provide work for only about a third of the population due to enter the labor force, according to the IMF
In addition to this, research has shown that the youth of KSA are frustrated that their education does not adequately prepare them for the workplace.
This survey of Gulf residents between the ages of 15 and 24, including KSA nationals, found that only 19 percent believed that their education has prepared them to find a job “to a large extent”. Hence owing to Saudization and the youth being dissatisfied with the quality of their education, one can estimate an emergence of a gap between supply and demand of skilled workers. And this gap is an excellent opportunity for the education sector as the demand for quality learning and development will be on the rise.
Looking at the big picture, to increase the productivity of an economy, it is not enough to invest in new technology and new machinery. KSA needs to invest in and develop their most important asset: Human Resources
And for this, the country needs to have access to adequate number of quality training and skill development providers which is why the education budget allocated this year is of prime importance.
Hence if we are to meet the skill training needs of this large slice of the population (the youth), market-driven discipline is needed to reform the KSA’s skills training sector. The implications will be positive: students will only pay for courses which lead to meaningful employment which will weed out low-quality training providers and employers will respond positively to students with a robust set of relevant, employable skills.