An Economist article from April 2013 noted that the number of young people out of work globally is nearly as big as the population of the United States, with OECD figures suggesting that 26m 15-24 year olds in developed countries are not in employment, education or training (NEETS). The number of young people without a job has risen by 30% since 2007. Regional analysts predict that the Middle East will require around 100 million new jobs by 2020, a doubling of the current level of employment in the first two decades of the 21st century - a tall order for even those regional markets with healthy growth rates such as the UAE which is predicted to grow its growth domestic product (GDP) by 4.5 % in the year 2013.
According to the World Bank and the IMF, MENA public sectors employ between 14% and 40% of all workers in the region. Historically, the public sector served as a political solution to the economic problem of unemployment.
Reflecting on the legacy of the public sector being the engine of job creation, youth participation in the private sector is very low in the Middle East – in the UAE alone it is less than 1% reflecting the situation worldwide driven by the economic crisis that is isolating young people from the work place. Emirates Foundation's recent Philanthropy Summit united experts from across the region and the world to look at specific ways in which the private sector can help.
Speaking at the summit, Jasmine Nahhas Di Florio, the vice president of education for employment, framed a discussion around the need for governments and private sectors to lobby to support private sector-led youth employment. Three eminent experts from diversified fields discussed the roles that leaders in both sectors play in bridging the skills mismatch in the region, as well as the ways in which entrepreneurship might help MENA youth to overcome the region's sobering unemployment rates.
Di Florio kick-started the conversation highlighting the paradox among two major crises faced among youth and employers in MENA region. The former is the unemployment crisis; where youth in some countries are three to four times more likely to be unemployed than their adult counterparts. The latter is a workforce crisis; where employers are experiencing a talent crunch. They fail to recruit the right people, with the right skills, at the right time.
According to the results of a survey undertaken by Qatar's Silatech along with other entities in the region, Arab youth employment in the public sector varies depending on the country and ranges from 35% in Morocco and Lebanon to 89% in the Gulf. Dr Nader Kabbani, the director of research and policy at Silatech elaborated extensively on young people's transition from school and the structure of the education system: "To some extent, people are aiming to absorb knowledge in order to pass tests and get the credentials to help them get a public sector job". Dr Kabbani added "This is reinforced by parents and teachers. So when young people leave school, this is what they are ready for – a job not a career".
The skill matching challenge is also exacerbated by the mismatch in young people's expectations. A recent study published by the Ashridge School of business on 'Cultural Shock - Generation Y and their managers around the world', highlighted that Gen Y is the same across the world. It is the gap with their managers that creates the differences. 16% of graduates in the Middle East describe their managers as invisible. Creating a national dialogue of what our future generation should be like, and understanding why young people have such high preference rates for public sector jobs is a key element to understanding how to secure a more attractive private sector environment for them.
Echoing similar concerns, Dr Bessma Momani, associate professor at the University of Waterloo stressed the need for a cultural shift. "It's about how to harness critical thinking – a skill that can't be gained through testing people's rote memory". There is no disagreement when thinking that society is in need of a culture shift; this doesn't mean changing the essence of the Arabic culture but adopting some new mind-sets for the way youth is being raised when talking about their careers and goals." As an observer of the region and an optimistic one at that, Dr Momani confirmed that she can detect young people's cultural attitude change. "With their strong desire to achieve more and be recognised as independent individuals, cultural attributes are needed to create a creative society.
A macro-economic analysis of the Arab region shows that countries have to focus on being effective players in the service industry and the creative sectors noted Dr Momani. "Talent in this region is being recognised as a valuable part of the economy," she said concluding that "forming mini-startups within the government could jump start creativity and fuel jobs".
Most of the ideas proposed not only by the speakers but also by the participants included targeting youth at an early stage by offering career guidance and by encouraging teens to pursue their passion and choose a career/skill set that would be in demand by the time they graduate. There were also encouraged to think creatively and assess professional opportunities outside of traditional sectors. Ameera Horriyat, the manager of special projects at the Khalifa Funds for Small and Medium Enterprises, Abu Dhabi's hub for enterprise development, raised the issue of entrepreneurship. The UAE government has done a great job starting such organisations that work as a platform to help young people start preparing to become entrepreneurs.
At the government level, policies are already being introduced to achieve that objective, but further efforts are needed to limit incentives for public-sector employment. Raising educational quality and making nationals more competitive in the private labour market are also crucial to generate jobs. On the other and, the private sector has to be incentivised to increase the level of Emiratis working for their companies by giving the right meaning to the Emiratisation, through providing more entry level opportunities for youth to gain working experience. The educational system and curriculum should also undergo a significant change to empower youth with necessary soft skills necessary for team playing and right work principle.
Participants concluded that overcoming the challenge of unemployment and skills mismatch requires participation from all members of society - educational institutions, government, private sector and youth. Only through collaboration and comprehensive outreach can long-term effective solutions be achieved.
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