It may come as a surprise to some that the tiny and oil-rich United Arab Emirates has attracted eleven American universities and seven European ones to its desert land, while at the same time building and planning seven of its own.

Palm Island Dubai UAE

One of its Emirates, Dubai, has bought its way into every luxury market, from racing –horses, cars, sailboats–, to beachfront property –Palm Island, The World Islands, etc.  The UAE also competes in tourism, transshipment of goods by sea and now, of course, higher education. If you are an American university of some prestige, it is very tempting to open a campus in Dubai; the land is almost free, financial incentives are generously offered by the governments as well as all those who may benefit from your being there and yes, it can all happen in English, the only language most American academics speak. But is it sustainable?

Like the expensive real estate, which has been built and remains vacant and this year nearly brought Dubai World into bankruptcy, Dubai has produced far too large a supply for the occurring demand in almost every area. In Higher Education, the numerous foreign campuses, those which are there now and those that are coming soon, are not all likely to enroll enough students to make them break even.

Operating a university in the UAE is very expensive. First you need Western faculty. That’s what the student is paying for, British, American, Canadian or Australian faculty. The costs of maintaining an expatriate faculty member in the UAE will have to include free housing, richer benefits such as trips back home every year, the cost of educating dependents and the premium salary one must pay in order to entice the best and most senior faculty to relocate there and this would bring faculty costs to 300% above that of the American counterpart. You must also consider that trips to conferences, lab workers and other academic expenses will double. So in order to keep a campus going you need to charge a much higher tuition to cover the much higher costs and a critical mass of students –estimated at about 2.500 at the undergraduate level and 500 at the graduate level–, before you can break even. Most foreign universities there have fewer than 300 students now.

In relative terms, the UAE plans to have more universities and research centers in their soil than the Boston Bay Area with its 50 campuses. That’s the idea behind the national investment, to create a critical mass of scholars, researchers and students that would propel the UAE economy for years to come. That is great for the UAE but no so great for the institution of higher education that ventures there.

The United States is the world’s leading exporter of education but it does so by attracting students to the U.S. campuses, it rarely ventures abroad successfully. A presence in the UAE maybe be prestigious back home, but not for long, as the issues and costs multiply.

One way to enter this market is with a very good distance-learning program for lower division students coupled with an upper division program on the U.S. campus, which would result in an American degree. This will effectively lower the cost of operating a campus. But you must also keep in mind that Arab students are not at all like American students, so a very extensive program of academic support would have to be built which would prepare, support and mentor students through a successful transition to the U.S. campus.

More next week…