Proceedings of 35th International Business Research Conference
30 - 31 May 2016, American University in the Emirates, Dubai, UAE
ISBN: 978-1-925488-06-7
What Are The Impacts of Economy on Education? How
Did Economy Change The Structure of UAE?
Sed Saad and Fatima AlKhayyal
As every other developing economy, UAE has invested its resources on developing
a prosperous economy that will help in reducing inequality and having a
monogamous and creative society. The reason why economy is increasingly
growing is merely based on knowledge and creative mentalities that helped in
evolving the service offered to educational system. Innovation in a business model
that consists of changes that occur in a business product or service and the way it
advances or the way it is introduced to the market regardless of it being the same
over the years. Based on this, the study will discuss the impact of economy on
education and how did it changethe structure of UAE overall. To do so, we will use
Data analysis in order to determine the effect of economy on education. This data
will include previous years with the current ones in order to differentiate the impact
that occurred since then. The research findings will be able to determine the big
difference between education in the old era and education after the introduction of
Internet and social media to the marketindustry and the way technology evolved
through all these years. It will contain review of literature to determine previous
studies and to analyze whether the studies agrees with the analysis gathered from
interviews, surveys and simple sampling method. As a conclusion, the study will
propose recommendations on areas that need to be advanced in the writer’s point of
view.
Keywords: Education, Innovation, Business Model, Knowledge economy
Introduction
Education has become increasingly related to economic growth. It is discussed that when
a country spends more on education, their expenditure increases, which in return affect
the growth of economy. This occurs because income of individuals will increase as their
educational level increase. For this dilemma to be addressed and solved, developing
countries like UAE are working on making their capital and labor force more productive
in order for them to produce more income which in return will help in increasing the
investment on education that adopt technological innovations.UAE helps in promoting
higher education, one because they have a strong belief that education is a right not just a
privilege and second production and services are becoming more innovative and
complexwhich makes the market demand alter. To attract individuals towards higher
education, the country worked on providing incentives which both perceived as balanced
and equal opportunities for each and every one in the population. Individuals who attain
higher education will have a high opportunity of
________________________________________________________________
Sed SAAD and Fatima AlKhayyal, American University in the Emirates, UAE. sed.saad@aue.ae
gaining high earnings and a flourishing employment status, which leads to prosperous
status among population. UAE are putting an enormous effort on introducing new
technologies in order for students to be able to choose the field they see themselves
strong in. By doing so, UAE is actually helping economic growth as they are allowing
new industries to be created due to new innovative minds that will develop in each area
whether it is in architecture, engineering, IT, business…etc. As old industries are
becoming less competitive, creating new industries will help in developing economies
that will change and dominate the market/industry structure.
RESEARCH QUESTIONS
I. What are the impacts of economy on education?
II. How did economy change the structure of UAE?
The research will include collection of data either by using primary (interviews) or
secondary method (Journals and articles). There are two types of research method,
quantitative and qualitative. In this research we will be focusing on qualitative analysis,
as we will be using a questionnaire that will include the above research questions and will
be submitted to selected sample in order to reach the conclusion desired.
LITERATURE REVIEW
2009, Sheikhalubna Al-Qassimi recognized the major role of education and its policy in
advancing economic growth. She stated that UAE is considered one of the world’s active
economies, she further discussed that for UAE to attain a sustainable economic growth,
there will be a major effort in evolving and binding human capital as education is
considered one of the most important factor of economic well-being. She proceeded by
stating the commitment that UAE has towards education that helped in creating a strong
bond between the country and well-respected institutions in the U.S like Harvard, John
Hopkins and New York University. (© 2009 Emirates News Agency (WAM))
In Khaleej Times 2014, an article by the title “ The changing face of education in the
UAE” discussed how education is a vital part of development in UAE. Dr. Mugheer Al
Khaili, Director-General of Education Council addressed the issue by stating that the
country is in need of the society in order to develop more, he added that UAE cannot
focus its whole developing strategy on oil as it is a variable but must focus on expanding
knowledge based economy. By doing so, a student can learn quickly and effectively new
technologies. (2014 the Khaleej Times (Dubai, United Arab Emirates)
Relationship between education and economic growth
Education plays an important role in developing social and economic factors of any
society. In order for an economy to prosper, there must be a huge investment in
education as well as human capital.Individuals are encouraged to continue their higher
education because they relate education to a better life, which means high wages. This
tendency increase the rate of educated individuals which helps in growing the economy
1
as production and service rate increases by the diversified and extensive rate of people
willing to get higher educations.
Nowadays, it has become much easier for an individual to work on attaining higher
education, the introduction of the Internet played an important role in upgrading the
educational systems around the world. An individual could get all the information he
needs by a click of a button. The only problem that face an economy is undeveloped
countries as they lack all technologies presented to developed and yet developing
countries, their education is declining rather than inclining which mean that their
economy will never be flourished and this effects the rate at which undeveloped countries
might think of joining the developing countries as their focus are neither on human
capital nor economic growth.
Factors affecting Economic growth
Economic growth is defined as an increase in the size of an economy to produce
products/services within a time frame. Sustained economic growth could have a positive
effect on income and level of employment; these two factors raise the status for
individuals in the country. Some of the important factors that affect economic growth of a
country are natural resources, Human resources, Capital formation, Social and political
factors and finally Technological Development. Countries that adopt technological
development expand much more than other countries because they select a technology
that is unique and have a major affect in expanding their economic status. According to
Professor Lewis, he stated that a country with poor resources may become a rich country
due to the introduction of new resources that help in increasing the wealth of the country
creating high standards of living due to increase in national income and employment rate.
Japan is considered a good example of a country that have a low rate of natural resources
but they are considered one of the most advanced countries in the world because they
utilized their use for limited resources rather than discarding it.
Factors affecting education
Education could be affected due to lack of incentives, low standard of education and the
absence of the regress training for employees, it is also stated that not all Emirati citizens
speaks proper English and some do not know a word of English which is considered a big
issue in todays world as English is considered a communication tool between countries
around the world. Due to lack incentives, employees find it hard to progress in their work
due to lack of trust among them, they tend to keep their work private, they do not have
the proper motivation to pursue a higher education as their jobs are minimal and the
wages may not jump to a major leap especially in private sectors where the wages are
considered low considering the private sector.
Methodology
This research paper will aim on providing results on the field of investigation, which is
the effect of education on economy. This paper will show the indication based on
individuals perspectives and general knowledge.
2
The chosen methodology for this paper is Qualitative method. This method was chosen
because it relates to people’s views and opinions. Qualitative research is defined, as “a
situated activity that locates the observer in the world It consists of a set of interpretive,
material practices that makes the world visible (Denzin& Lincoln, 2005).”
Data collection
Sampling method that will be used in this research paper are Interviews and Survey.
Interview are used because it helps in gaining information that are hard to be collected
otherwise and it helps in gaining more knowledge on the subject as people tend to be
more vocal when interviewed in person.
Survey is used to gain more perspective on the topic from anonymous individuals from
different genders and different educational backgrounds to test their knowledge on the
subject and their point of view on it.
Primary Data collection methods and procedures
The two methods used in Qualitative method for this research are surveys and interviews.
The Interview is performed in order for the interviewer to know the perspective of the
interviewee in-depth. Due to face-to-face interaction, the interviewer would be able to
assess the reaction of the interviewee, which will make it much easier to analyze the
finding acquired by them. Unstructured interview format is chosen for this paper because
it helps the interviewer to feel more relaxed when answering as he can elaborate and
discuss the subject he is interested in more precisely. This helps in assessing his answers
and having an elaborate answers to the questions asked to him.
Survey is used to help collect responses from individuals of different backgrounds.
Unlike Interviews, Survey are much more elaborate and can be done based on a person
preferences, at any time and anywhere. Due to the presence of social media, it became
much easier for the researcher to submit an administrated survey and finish other
missions while he’s waiting for participant’s responses on the matter. Surveys save time
on the research and the participants as well as it give the researcher the precise response
of the participant.
There are 120 survey questionnaires that were submitted on participants from college of
Business administration and College of Mass media and communication. The participants
range from 19 to 28 years old.
102 students where of Business Administration who have experience on economy being
familiar with the subject because they were taught the subject and 18 of Mass media,
giving an open opinion about the matter due to unfamiliarity of the subject.
5 of the students who are taught this subject were interviewed to assess their knowledge
on the matter and to assess their education status in AUE.
Activities of Primary Data collection
3




Below are the list of activities the researcher conducted in order to assess the
results of the interview and survey:
Interview process
Random sampling to choose survey participants
Asking for permission for the interview to minimize the interviewee to five from
college of Business Administration.
Secondary Data Collection
Data from formal studies are also included in the research to broaden the information that
will occur in the survey and interview process. It is used to allow the researcher to
explore the subject in a wide range. Secondary data such as journals, articles, brochures
and website such as ProQuest are used to support primary data.
The brochure designed by the researcher were submitted amongst students to help them
be more motivated to proceed in gaining a Master degree by using incentives that was
beneficial in their career paths.
Results
1. What age group do you belong to?
a. 19-21
b. 22-25
c. 26-28
50
40
30
20
AGE
10
0
a.
1921
b.
2225
c.
2628
2. What is your educational level?
a. High-School
b. Higher Diploma
c. Bachelor
4
d. Master
70
60
50
40
30
20
10
0
education
level2
3. Which College do you belong to
a. COBA
b. CMM
120
100
80
60
College
40
20
0
COBA
CMM
4. How well you know the subject “ Impact of economy on education”?
a.
b.
c.
d.
Excellent
Very good
Satisfactory
Poor
5
80
60
40
Impact of
Economy on
Education
20
0
5. Do you think that by achieving higher education your status will increase in
your current/future career?
a.
b.
c.
d.
Excellent
Very good
Satisfactory
Poor
60
50
40
30
Sales
20
10
0
a.
Excellentb.
Very good
c.
Satisfactory
Poor
6. Do you think of continuing your education in the future?
e.
f.
g.
h.
6
Excellent
Very good
Satisfactory
Poor
45
40
35
30
25
continual of Education
20
15
10
5
0
a.
Excellentb.
Very good
c.
Satisfactory
Poor
7. Do you prefer working in a public sector or private sector?
a. Private
b. Public
c. Neutral
80
70
60
50
40
Career
30
20
10
0
Private
Public
Neutral
Interview
The result presented in the interview reflected how well students know about the impact
of economy in education; they referred to the innovation in the field of technology that
helped in advancing the rate of education. The quality of services presented in education
and the awareness that occurred in social media regarding the offers that occur in private
as well as public sector give the perfect idea for the student applying for higher education
on the high standards he’ll be living when he gain a graduate degree. By graduating from
7
a high education level, an individual will help economy to gain high national income due
to the presence of new technology in the country,
Conclusion
Primary research conducted was Qualitative research, which included an interview and a
survey process. This research was conducted to assess people’s knowledge on economy
and how it effected education. It allowed the researcher to assess the big influence the
media have on changing people’s perceptions of ongoing trends that occur in educational
level. The interview process helped in recognizing each individual’s point of view and
helped in assessing the importance of economy in today’s education. Secondary research
was also conducted to assess the benefits of having major incentives in education sector
and the challenges it takes for students to be more encouraged to pursue graduate
programs.
Discussion of Findings
The findings suggested that students are well aware of the situation of economy and
education. They clearly know the rate at which economy affects education. Their answers
were relatively adding education to economy as they consider it as a vital part of
economy. Education increases the rate of income, which in turn raise the standard of
living fro them. all people willing to have a high standard of living are willing to consider
attending a graduate program as it helps them in attaining a high career opportunity.
Although individuals working in private sector find it hard to attain a high income at their
careers but they are willing to expand their horizon to the idea of having an alternative
that will help them in increasing their wealth.
Limitations



Some students find it hard to juggle education and their careers as they work full time,
which may conflict with their study schedule.
Quality of answers: some people perceived knowledge as a degree instead of having the
full knowledge on the matter and their answers were considered invalid.
Survey: the survey was minimal which did not help in attaining a full understanding on
the matter and some just checked the same boxes in order to finish the suvey as they have
a poor English skill.
Recommendations
For the matter to be more addressed, students even from other colleges should gain the
knowledge of economic standards. They should know the importance of achieving high
8
educational level. The incentives should be addressed clearly for them to be able to
address the issue broadly. New technologies must be presented in a wide range in order
for students of different ages to benefit from and people should be able to innovate more
in education sector rather than thinking of it as a degree and that’s all.
Answer to Research Questions
The research questions were what are the impacts of economy on education. All answers
were from the perspective of students. All five students agreed that economy impact
education or in other words education impacts economy, one student stated “ if I want to
gain more income, I should work hard on obtaining an excellent GPA”, this assess that
even though his answer involved income, which is the impact of gaining high education.
Other student stated, “ I will finish my masters degree as it is a requirement in my work,
as a manager I wish to gain a higher status and income, by gaining a Master degree I will
be able to upgrade my status to be a senior manager”.
I. The other research question was how did economy change the structure of UAE,
one student discussed this issue intensively by stating that UAE used to be an
uneducated country but nowadays due to the presence of new technologies and
the advance in people cultural views and standards, Individuals whether they are
women or men are striving to gain education in order to advance the economy by
introducing new technologies, (products and services) which help the economy
flourish in the country due to presence of new market/ industry which will help in
changing the structure of the market to an advanced level.
Conclusion
Economy and education will always have a relation between them. Even though views
may be different among people but as discussed above, in my point of view I believe that
education may change economy. I believe that by attaining high education in different
fields, they contribute in developing the economy because when they gain new
knowledge, they might contribute in producing new knowledge and technology which
may produce innovative business models that when introduced to market might change
the structure of the industry as a whole like in the case of Apple Inc. Steve Jobs created a
software that changed the whole communication industry when he created a smartphone
that had a touch screen, this contributed in developing a stamina to Apple Inc. which is
till today considered a dynasty. To conclude, UAE have committed to the education
sector and will continue to provide the tools needed to advance education in all aspects.
REFERENCES


OECD (2012),How does education affect the economy?,Education at a Glance
2012: Highlights, OECD Publishing.
U.S Treasury Secretary, UAE officials discuss role of education policy in
economic growth
9







10
Emirates News Agency (WAM) [Abu Dhabi] 15 July 2009.
Muazm, Shabandri. McClatchy ,Tribune Business News [Washington],(2014),The
changing face of education in the UAE
Salgür, SelamiAhmet(2013),The Importance of Education in Economic Growth,
The Importance of Education in Economic Growth:47-52.
http://www.yourarticlelibrary.com/economics/factors-that-influence-theeconomic-development-of-a-country/5942/
Schmieder, I,(2014), Factors Influencing Economic Growth,World, 1(1).‫‏‬
Mankiw, N. G., Romer, D., & Weil, D. N,(1990), A contribution to the empirics of
economic growth,National Bureau of Economic Research.‫‏‬
Al-Ali, J (2008), Emiratisation: drawing UAE nationals into their surging
economy, International Journal of Sociology and Social Policy, 28(9/10), 365379.‫‏‬