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A
New Business Model and Value Creation
Dynamic for Saudi Arabian Higher Education
Brandon Bretl
Taibah University, Saudi Arabia
Email: bretl.b@gmail.com
Saudi Arabia has
allocated for education $36.5 billion
of its $144 billion 2010 national
budget (Baxter, 2009), and as a result
of budgets like this, Saudi Arabia's
higher education infrastructure has
seen unprecedented growth over the
past ten years. Recently signed contracts
include a building contract at Hail
University for 737 faculty residence
villas and 98 additional buildings
and at Taibah University for the construction
of 629 villas and 24 additional buildings
(MEED, 2009). This is only two of
the 11 new universities created in
the past three years and 120 higher
education institutions created in
the past seven years (Al-Rashidi,
2007).
What does this mean for the business
models of Saudi Arabia's learning
institutions? It is tempting to assume
that strategic business planning and
money management are the least of
concerns for a network of government
funded learning institutions in such
an affluent country, and it is just
as easy to be blinded by their seemingly
anti-democratic social structures
and therefore to assume they somehow
function outside the laws of contemporary
economics anyway. But, as the country
prepares to enter the second year
in a row with a deficit, Saudi Arabia's
education system-especially its higher
education system-can't afford to ignore
the importance of intelligent business
planning. If proper value-creation
and quality assurance measures aren't
put in place soon to compliment their
physical, state-of-the-art education
infrastructure, billions of dollars
in investments could be lost.
From the perspective of business,
this unique situation can be split
under two headings: special challenges
and special opportunities, and many
of the opportunities arise precisely
from the challenges. A special challenge
is how to encourage progress, spurn
neglect, and maintain a certain level
of quality throughout such a large
number of seemingly homogenous, government
run schools. Although the universities
are more or less free to implement
the ideas of the administrators, faculty,
and students, the Ministry of Education
has the real power, and the King always
has the final say (Ministry of Education,
2010). Therefore, diversity amongst
Saudi Arabian universities is not
great, and almost everything truly
"western" is concentrated
in only one university-the new, coed
King Abdullah University of Science
and Technology (King 'Abd All?h University,
2010). This lack of diversity could
be a problem, as Magretta (2002) states:
…doing better, by definition,
means being different. Organizations
do better-they achieve superior performance-when
they are unique, when they do something
that no one else does in a way that
no one else can duplicate. When we
cut away all the jargon, this is what
strategy is all about: how you are
going to do better by being different.
However, Saudi Arabia's collegiate
homogeneity on a national level may
be what makes them unique and competitive
on a global level. Certainly, no other
country is going to be able to replicate
such a broad range of studies under
one religious mindset in a sexually
segregated, energy-focused environment
with so much money at immediate disposal.
Therefore, it seems that Saudi Arabia
may be at the leading-edge of a new
global competitiveness, creating a
new business model and value-creation
dynamic-one not hindered by local
competition and instead based on widespread
and strict conformity and standardization
on a national level to funnel the
best and the brightest into one, centralized,
mega-university-a model which can
easily be translated into a highly
regulated supply chain system for
all sectors of the workforce and economy
(Turki, Duffuaa, Ayar, & Demirel,
2008).
References
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