The relationship between Education and Economic Development: A case study of Saudi Arabia and the Prospects of Vision 2030

Abstract

This research examines the dynamic between education and economic development in Saudi Arabia, paying specific attention to Vision 2030 as a catalyst. Grounded in Human Capital theory and the Triple Helix framework, this study employs time-series data from 1970 to 2022 obtained from the World Bank database and uses regression and Pearson correlation data analysis techniques. The findings of this study reveal a positive correlation between government educational expenditure and economic development in Saudi Arabia. However, the causative strength of this relationship was found to be modest, with only 6% of the variability in economic development accounting for education spending. Nevertheless, Vision 2030's emphasis on human capital highlights the potential of education in promoting sustainable economic development. Although the time lag between education and its effect on economic development means that tangible returns might be witnessed in the future. Moreover, the empirical results illustrate the encouraging effects of governmental educational spending on metrics like school enrolment and female participation in education and the workforce. Nonetheless, challenges in tertiary education, particularly the quality dimension, remain salient. Key recommendations from the study include the need for a qualitative shift in the educational landscape in Saudi Arabia. Beyond focusing on tertiary enrolment, the focus should be on enhancing the quality of tertiary education, underscored by reduced student-to- teacher ratios and contemporary pedagogical methods. Additionally, greater collaboration between academia and industry is vital. This entails curriculum co-creation with industry experts, emphasising skills-based training, and continuous realignment of educational outcomes with evolving labour market needs. Such strategic shifts which are anchored in global best practices and theoretical frameworks are crucial for Saudi Arabia's journey towards realising the aspirations of Vision 2030.