Technology will be a game changer in tackling youth unemployment in the Middle East and North Africa region’s emerging digital economy, but only if the government, private and people sectors collaborate effectively, according to a report released at the World Economic Forum on the Middle East and North Africa (MENA) 2015.
The report, titled “Re-Dynamizing the Job Machine: Technology-Driven Transformation of Labor Markets in MENA,” has been produced jointly by INSEAD Business School, the Center for Economic Growth in Abu Dhabi and SAP. The report was launched at the Dead Sea, Jordan, at a high-level event attended by government ministers, senior government officials, business leaders and academics from the region and worldwide.
With 40 million under-unemployed youth and 27m without education, employment, or training, the Middle East and North Africa region has the highest rate of youth unemployment in the world at 27.2 percent, according to the World Economic Forum, presenting a serious problem for a region where more than half the 369m inhabitants are under 25.
As Internet penetration in the region jumped 294 percent between 2007 and 2012, technology has the potential to impact every aspect of labor markets, including better matching of jobs across all sectors, facilitating up-skilling, empowering entrepreneurs and providing actionable data to decision-makers. The Millennial generation of people aged under 25 are digitally connected like never before, according to the report.
Demonstrating the growing demand for Information and Communications Technology (ICT) jobs, the Middle East’s ICT industry value is set to reach $173 billion in 2015, more than double the value in 2010 and projected to create nearly 4.4m jobs by 2020, according to research firm Strategy&.
However, enabling youth employment will require decision makers from the government, the private sector, academia and civil society to collaborate on adapting academic curricula to better integrate ICT learning, up-skill students and workers with ICT and e-business skills and create an environment that encourages entrepreneurship and small-business job creation, according to the report.
Emerging Digital Economy Requires ICT Skills
MENA companies are increasingly generating ‘IT-intensive’ jobs that produce information or knowledge for increasingly digitized business processes, across mobile platforms, cloud-based services, analytics and citizen-centric applications – all of which require new skills.
“New information and communication technologies are indeed creating more jobs in the ICT sector itself in the form of digital jobs and digital entrepreneurship. Yet, these effects will be felt far beyond the sector: e-skills are now required in all sectors,” said Bruno Lanvin, Executive Director, INSEAD Global Indices.
“ICTs enable employment in all other sectors of the economy by facilitating job search and a better matching of jobs, facilitating up-skilling, empowering entrepreneurs in diverse sectors of the economy and providing decision makers with actionable data,” he added.
“By combining data from INSEAD’s three indices on talent, innovation and network readiness, the report was able to develop a framework for analyzing these three critical components and assessing the impact of digitization on countries and societies,” said Patricia McCall, Executive Director, Centre for Economic Growth in Abu Dhabi.
Online technologies support the process of up-skilling as they can reach more segments of society and allow people to self-educate, according to the report. Once people acquire skills they can search for jobs online, which offers diverse efficiency gains to the economy, such as reduced transaction costs, speedier clearing of the job market and better matching between workers and vacancies.
ICT companies in the region are already actively supporting education for employment initiatives. For example, SAP MENA’s Training and Development Institute integrates ICT in university curricula and trains students as well as unemployed university graduates in ICT skills.
Countries can encourage and support digital entrepreneurs by removing obstacles, including restrictive legal frameworks, while governments should support incubation centers to educate entrepreneurs and innovators and provide them with the needed skills and support to help them succeed.
“Governments in the region have a critical role to play in leading national initiatives for employment: putting in place policies; raising awareness and articulating a clear strategy and messaging to enthuse communities and, finally, providing an ICT platform where all the stakeholders – especially youth – can connect, massively collaborate and co-innovate to create the jobs of tomorrow,” said Selim Edde, Vice President, Government Relations, SAP MENA.
“Big Data, mobility, social media, youth centric applications and actionable data will have a transformational effect. The key component will be in the implementation and execution on that vision and strategy,” he added.