Archive for the ‘Research and Insights’ Category

The Frankfurt Book Fair is one of the world’s most important and well visited book fairs. It has emerged as a key forum to define the agenda for the global publishing industry. This year, the United Arab Emirates (UAE) will be a featured market. As a featured market, the UAE will have the opportunity to showcase its growing publishing industry, expand trade links, and attract foreign investment from international publishers and retailers.

In the run up to the event, Tahseen Consulting was asked by the Frankfurt Book Fair organizers to contribute its thoughts on the key challenges facing the UAE publishing industry. For over a decade, Tahseen Consulting has been involved in many of the Arab region’s initiatives to enhance the competitiveness of domestic publishing industries. We have conducted several regional and country level analyses on the challenges facing domestic publishing industries in the Arab World such as our landmark publication on Saudi Arabia’s publishing industry which supported the Saudi Publishers Association’s promotion as a full member of the International Publishers Association.

We are honored to have contributed our thoughts on the key challenges the UAE publishing industry must address to consolidate and build on the significant growth the industry has experienced over the last several years. At Frankfurt Book Fair, Tahseen Consulting’s Chief Executive Officer Walid Aradi will be discussing these challenges as well as potential market opportunities in more depth.

Key Challenges the UAE Publishing Industry Must Address in its Next Growth Phase

Just four decades ago, 48% of Emiratis were illiterate. Today, the illiteracy rate has dropped below 1% due to the United Arab Emirates’ focus on improving access to quality education for all. The United Arab Emirates’ significant educational, social, and economic gains, have produced an increasingly globalized and educated population eager to consume more locally produced and culturally-relevant content, particularly in Arabic. In the last decade, a small, enterprising national publishing industry has sprung up to meet this growing demand.

The United Arab Emirates’ publishing industry is evolving at a transformative time –publishers are faced with the challenge of redefining an industry which has traditionally focused on ink-to-paper content by finding new and innovative ways to merge high-value Arabic content and technology to meet evolving reader demand. Despite the youth of its publishing industry, the United Arab Emirates has the potential to become a global hub for international and regional publishers, distributors, and other complementary creative sectors. The industry is projected to grow at a compound annual growth rate of 12% to 2030. However, additional growth could be achieved if several industry concerns are addressed.

Enhancing export competitiveness of Emirati publishers

In 2014, book exports from the UAE were $40 million versus imports of $126 million based on the most recent customs data available. Over the last decade UAE book exports have grown at a compound annual growth rate of 1%, while imports have grown at a compound annual growth rate of 8%. Book publishing has so far failed to contribute to the diversification of the United Arab Emirates’ exports. These statistics show that the UAE publishing industry remains insular and inward looking primarily due to its youth. The low number of titles produced in the UAE, estimated at approximately 500 titles per year and unique demographic structure, partially explains the imbalance between book import and exports, but the industry faces a range of other significant challenges that reduce export competitiveness.

Though changing due to increased participation in international book fairs, the international publishing community still has little awareness of the emerging UAE publishing industry. A growing portion of UAE titles are of sufficient quality and appeal for global export. For example, Emirati-authored books now make up 11% of the top-selling Arabic books in the UAE, and Kalimat’s children’s book Tongue Twists was recently awarded the Bologna Children’s Book Fair Award. However, international publishers and literary agents still remain largely unaware of UAE published titles. An interesting initiative by Spain, called New Spanish Books, which provides an online guide of titles from Spanish publishers and literary agents available for foreign rights sales, is potentially a program that could be replicated in the UAE to increase awareness of the titles of Emirati publishers with export potential. At the most foundational level, enhancing export competitiveness of publishers will require an industry wide effort that brings together government entities that are concerned with the promotion of cultural industries and economic diversification as well as civil society institutions like the Emirates Publishers Association, and publishers.

At the publisher level, two significant issues must be addressed: enhancing the market responsiveness of domestic publishers to operationally respond to the internationalization and globalization of the publishing industry and building the capacity of domestic publishers to access international markets through translation, selling foreign rights, and international marketing and promotion. While use of Arabic is a common denominator which promotes export to other countries in the Arab World, export statistics show that UAE books also have a broader appeal in countries such as the UK, US, Germany, Spain, and Italy. Though there are several government backed industry support initiatives, such as translation and rights trading grants, more comprehensive publishing industry support programs, potentially similar to the Canada Book Fund, could be more impactful in increasing the export competitiveness of domestic publishers and addressing firm-specific challenges that limit export capacity.

Strengthening the domestic production of learning materials

Approximately 54% of UAE book imports are textbooks primarily from the UK and US. Imported textbooks generally cover science and mathematics subjects while domestically produced textbooks, which are primarily published by the Ministry of Education, cover humanities and religion subjects.

Emerging research on textbooks and their relationship to learning outcomes suggests a link between textbook design features, student reading levels, and student performance – engaging textbook content with practical application to students’ lives influences reading of textbooks which ultimately affects student learning outcomes. In this way, the high portion of imported textbooks and regional textbooks which lag socio-cultural development, combined with other factors like poor quality teaching, may ultimately be having a significantly negative effect on student learning outcomes.

Evidence of this complex linkage is potentially found in the UAE’s performance on the 2011 Progress in International Reading Literacy Study in which the UAE ranked 40th out of 45 countries in terms of average reading achievement at the 4th grade level. Because of the influence that learning and teaching materials have on learning outcomes and reading skills, a key challenge which must be addressed is ensuring that educational materials are appropriate to the local context and do not perpetuate cultural and gender stereotypes which are at odds with evolving national values.

The production of quality, Arabic children’s books and digital content is also essential to complement Arabic teaching with age-appropriate, culturally relevant material to inspire children and help educators teach more effectively. While recent studies have shown that children would prefer to read in Arabic, the lack of genre diversity available in Arabic children’s books and online content forces children to consume English publications and media. For this reason, many children have come to perceive reading in Arabic as difficult and boring.

Many UAE publishers have begun to focus on publishing books and digital content for children, but there still remains a shortage of children’s publications in genres such as fairy tales, fantasy, suspense, action, and science fiction. The lack of engaging Arabic children’s books and online content reinforces the use of English and consumption of English language media in the classroom and at home which serves to further erode Arabic proficiency. More diversity in Arabic children’s books can enrich learning, allow children to build on what they learn at school through self-directed reading, and enable parents to complement the role of teachers by reading to their children and encouraging reading for pleasure.

Enhanced capacity of domestic publishers to compete in the educational publishing market is critically important to ensure that Arabic retains its role as a foundation of national identity and to ensure future generations are capable and proficient at leveraging Arabic as an effective tool. Publishers have a very important role in reversing the deterioration of Arabic skills by developing quality Arabic teaching and learning materials that engage students and support teachers in developing Arabic proficiency.

Building a national culture of reading

Though improving, several studies have found that a national culture of reading for pleasure is still in its early stages. These studies point to a range of issues from household access to books to low involvement of parents in building early childhood reading skills. Beginning in the late-2000s, a number of emirate-level initiatives sprung up to address national reading challenges. While the extent and breadth of these initial efforts to address national reading challenges was ambitious, collaboration and coordination across the many entities and initiatives was lacking. For this reason, the National Reading Law was passed in 2016 to ensure the sustainability of government efforts to build a reading culture and clarify the objectives of government agencies in promoting reading.

The National Reading Law is the foundation for the National Reading Strategy which is backed by $30 million in funding earmarked for 30 national initiatives to support reading and lifelong learning as national values. The National Reading Strategy also deemed 2016 the Year of Reading. The Year of Reading Initiative involves more than 340 major reading initiatives and activities taking place across the country involving over 100 local government entities working in co-ordination with the Higher Supervisory Committees for Year of Reading. The UAE has come a long way in defining a common agenda for promoting a national culture of reading based on localizing promising international best practices.

Best PracticeIndicative UAE Programs
Giving readers choice* Knowledge Without Borders’ Home Libraries Initiative
* Mohammed bin Rashid Al Maktoum Foundation My Family Reads Program
Incentives and awards* Arab Reading Challenge
* Ministry of Culture and Knowledge Development Reading Creative Award
Ensuring an enabling home environment* Ajman Department of Culture and Community Development My Family Reads Initiative
* Fujairah Department of Economic Development‘s Book in Every Home Initiative
Support from schools* Abu Dhabi Reads Campaign
* Knowledge and Human Development Authority’s #10Minutes10Days challenge
Accessible, modern school and public libraries* Knowledge With Borders and Abu Dhabi Tourism and Culture Authority mobile library programs
* Mohammed bin Rashid Library which will be the biggest library in the Arab World
* Ministry of Education’s reading corner, reading club, and Darfa platform

Ensuring that implementation of GCC VAT does not negatively affect the industry

In February 2016, the Gulf Cooperation Council countries agreed to introduce a Value Added Tax (VAT) at a rate of 5% in January 2018. While the education sector will be exempt from VAT, which will presumably be extended to textbooks and educational materials, it remains unclear how trade books and the raw materials for publishing will be treated under the new VAT system.

Currently, the UAE does not impose customs on imported books and printed goods. A key question that must be addressed as e-commerce grows in the UAE and global and regional online marketplaces increase book and digital content sales is how VAT and customs should be imposed on online transactions in the UAE. A still larger question is whether trade book imports and sales should be exempted from VAT altogether. Another issue that warrants discussion are potential customs and VAT exemptions for critical publishing industry inputs such as paper. Despite these large uncertainties facing the publishing industry surrounding VAT, there have been no policy impact studies conducted by the industry. There are several significant questions surrounding the imposition of VAT on the publishing industry and e-commerce transactions that remain unanswered.

When it comes to news on socio-economic trends in the Arab World, government and business leaders turn to Trends Magazine. Tahseen Consulting is honored to have its insights on regulating the emergent sharing economy in the Arab World in the publication’s October issue. We have posted the full article below.

Tahseen Consulting’s Chief Operating Officer, Wes Schwalje, spoke with Nikhil Inamdar, a leading voice on key business trends in the region, regarding the evolving role the sharing economy is playing in meeting the region’s youth employment challenge. In a wide-ranging discussion, Schwalje warns of avoiding heavy-handed regulatory approaches that might limit the socio-economic impact pioneering companies in the sharing economy such as Uber and Airbnb can have on the Arab region.

Despite the negative press attention the sharing economy has received, the Arab World has largely shied away from public and government debate over the policy issues that this major growth sector highlights as it disrupts mature industries. As the sharing economy has grown, it has puzzled global policy makers who are faced with the challenge of embracing innovative, digital services which can lower costs and increase convenience for consumers while balancing the continued competitiveness of incumbent industries.

The Rapid Growth of the Sharing Economy in the Arab World

The sharing economy includes a wide range of online platforms that help people share access to assets, resources, time, and skills. While there are a growing number of regional companies that have entered the sector, the dominant players in the Arab World remain well-funded, Silicon Valley-based startups. From Marrakech to Beirut, and many cities in between, sharing economy firms have rapidly scaled their operations across the Arab World due to strong consumer demand. However, regional policymakers, for the most part, have yet to consider how to regulate the sharing economy.

The Importance of Travel and Tourism to Regional Economies and Employment
CountryTravel and Tourism Total Contribution to GDPTravel and Tourism Total Contribution to Employment
UAE8.40%9.20%
KSA7.70%11.10%
Egypt12.80%11.60%
Morocco17.90%16.00%
Lebanon21.10%20.30%
Source: World Travel and Tourism Council

Early Attempts At Regulation

In considering how to regulate the shared economy, Arab policy makers face two options: dismiss new sharing economy platforms by regulating them out of existence and retaining legislation that favors market incumbents or embrace the efficiencies the sharing economy  can bring to increase innovation and harness the growth of the shared economy to promote socio-economic growth.

Dubai is ground zero for how regulation of the sharing economy might unfold across the region. For example, in the run up to Expo 2020, Dubai is attempting to broaden its range of accommodations. One market segment that has surged in the past several years is short-term apartment rentals. Until 2013, when Decree Number 41 was introduced, short-term rentals of holiday homes were largely unregulated. The Decree made it mandatory for operators and owners who lease out their apartments on a short-term basis to attain a license from the Dubai Department of Tourism and Commerce Marketing. (DTCM) In mid-2014, DTCM started accepting license applications from operators and owners. As of July 2015, a total of 37 operators and owners were licensed to rent out holiday homes in Dubai with 800 units registered.

It is unclear how Dubai’s renewed push to register holiday homes and impose fines on offenders who rent their properties without a license will ultimately affect sharing economy players operating in the short term rental sector. The licensing of holiday homes in Dubai is an example of a reactionary public policy response that could potentially erode the supply base of shared economy players in the short term rental sector by imposing a licensing process on landlords. A win-win solution which would have supported the growth of the shared economy as well as maximized government revenues would have potentially been to meet with sharing economy companies and short term rental agents to discuss how the Dubai tourism tax could be collected from intermediaries and paid directly to authorities. In France, Amsterdam, India, and the United States, sharing economy companies work with authorities to do exactly this.

A recent study suggests that the market presence of sharing economy players operating in the short term rental sector negatively impacts hotel room revenues. However, the competitive response from incumbent hotels often results in price reductions by lower-end hotels and hotels not catering to business travelers. In this respect, short term rental sharing economy firms have the potential to lead to lower consumer prices for hotel rooms as well as more flexible accommodation offerings. In so far as, lower accommodation prices can drive tourism numbers even higher, Dubai’s introduction of licensing requirements as a mechanism for regulating the sharing economy may ultimately have the unintended effect of reducing tourism by reinforcing higher accommodation prices.

Across the Arab World, overlaps between regulatory and operational functions of government institutions can result in significant inefficiency. When government entities provide a service, set delivery standards, and monitor compliance with standards, an unintended outcome is often reduced quality of public service delivery and lower service standards. This governance tradition in the Arab World has produced a number of cases in which regulatory agencies, which should be accountable to Ministries and focused on setting standards to ensure high quality public services, have become too involved in commercially motivated, operational functions. Over involvement of government institutions in operational activities has the potential to reduce the growth of the sharing economy and ultimately negatively impact consumer convenience and choice.

In association with the United Arab Emirates’ Smart Government Initiative, government agencies have been called upon to make their services accessible via smart technologies such as smart phones. The Dubai Road and Transport Authority’s (RTA) recent announcement of its e-limo system, which will require private hire vehicle operators to route transactions through its booking and dispatch system, is a potential example of a case where a government entity with a regulatory and policymaking mandate is extending itself too far into an operational role. By introducing their own limo application, which essentially competes with sharing economy transport networking companies and erodes market supply, RTA risks crowding out private sector innovation that can fuel entrepreneurship, private investment, and job creation.

Embracing the Sharing Economy for Regional Socio-economic Development

According to the World Travel and Tourism Council, travel and tourism contributes approximately $283 billion to Arab economies and employs 11 million people. This means that the contribution of the travel and tourism sector to regional gross domestic product is on par with the banking, chemicals, agriculture, and automotive sectors. It is clear that travel and tourism will play a strong role in generating economic growth and employment in the Arab World over the next decade.

The sharing economy, in so far as it is a key driver of travel and tourism, has the potential to contribute significantly to regional socio-economic development. While there have been no rigorous attempts to determine the socio-economic impact of the shared economy in the Arab World, limited data suggest that the sharing economy has a growing importance in driving the travel and tourism sector in the region. For example, 40% of Uber’s riders in Dubai come from outside the country. Statistics such as this indicate that sharing economy trends and penetration rates globally can have a significant impact on economies regionally.

A recent report on the sharing economy workforce in the United States found that 67.5% of sharing economy jobs are occupied by workers in the 18-34 age demographic. The youth employment impact of the sharing economy globally suggests that embracing the sharing economy in the Arab World could play a key role in government socio-economic development programs to address the Arab World’s youth unemployment challenge. This insight has important implications for how Arab governments should approach regulating the shared economy.

The Age of US Sharing Economy Workers
Age% Sharing Economy Workforce
18 - 2438.70%
25 - 3428.80%
35 - 4416.30%
45 - 5411.00%
55 - 644.30%
65 +0.90%
Source: Requests for Startups 2015 1099 Economy Workforce Report

The Future of the Sharing Economy in the Arab World

The future of the sharing economy in the Arab World is heavily dependent on how governments approach sector regulation. Knee jerk approaches to public policy will prevent the likely considerable positive socio-economic development impacts that can be generated by the sharing economy. In the GCC countries, entrepreneurship programs and wage subsidies offer significant potential to attract nationals and private investment to emerging sharing economy sectors that can reduce public sector employment. While in middle income Arab countries, the sharing economy can offer employment options for youth that can be combined with government finance and training programs that eventually lead to business ownership. Where other countries are limiting consumer choice by over-regulation of the shared economy, the Arab World has the opportunity to distinguish itself as a region that embraces the sharing economy through a well-considered public policy response that harnesses the sector’s potential growth for regional socio-economic development.

Unemployment By Age Group in Selected Arab Countries
AgeUAEKSAEgyptMoroccoLebanon
18-2433%52%63%42%45%
25-3432%45%36%40%32%
35-4415%3%1%12%8%
45-5412%0.50%0.06%5%8%
55-648%0.09%NA0.22%4%
65 +NANANA0.22%2%
Source: Latest available statistics from the International Labor Organization

The embrace of the Smart City concept is a key cornerstone of the UAE’s national development policy. Strong government commitment has been made to the use of Information and communications technology (ICT) to transform life and work in the UAE in fundamental ways. These investments in human capital and ICT infrastructure are expected to generate sustainable economic growth as well as lead to a higher quality of life.

Developing an affordable, high-speed communications network as an infrastructure backbone to enable smart cities has long been an objective of the UAE government. In 2006, the General Policy for the Telecommunications Sector in the State of the United Arab Emirates set out the goal of providing universal, affordable access to ICT services. Though the UAE has not set specific targets for ICT access and use at the national level or specific targets for gender equity, evidence suggests that the UAE is targeting 100% access for all individuals. Based on a recent household survey conducted by the UAE Telecom Regulatory Authority, 99% of UAE nationals have mobile phones, 95% of households have computers, and 84% of households have an internet connection. These statistics point towards a universally high level of ICT access and use in the UAE with sufficient resources and will to achieve full national ICT penetration.

Broadband Affordability is An Emerging Policy Imperative

While nearly universal internet access has been achieved, an additional imperative for public leaders remains ensuring affordability. This challenge is particularly critical in enabling entrepreneurship and ensuring the global competitiveness of the nation’s small and medium-sized businesses. In a global comparison of the prices of entry-level fiber broadband packages for small and medium-sized businesses, Tahseen Consulting’s analysis shows that UAE businesses are being charged significantly more than small and medium-sized businesses globally.

Global Comparison of Entry-level Fiber Broadband Packages for Small and Medium-Sized Businesses

Doing Business RankingCountryCompanyPackageDownload SpeedCost per monthData Limit
1SingaporeSingteleVolve for SMEs30 Mbps$69.70Unlimited
2New ZealandSparkBasic Business12 Mbps$52.11200 GB
3DenmarkTDCTDC BizBase15 Mbps$43.06Unlimited
4KoreaSK BroadbandOptical LAN100 Mbps$28.62Unlimited
5Hong KongHong Kong Telecom@Work Broadband30 Mbps$38.45100 GB
6UKBritish TelecomBT Infinity Unlimited38 Mbps$48.16Unlimited
7United StatesComcastStarter16 Mbps$69.95Unlimited
8SwedenTeliaTelia Office10 Mbps$57.21Unlimited
9NorwayTelenorBroadband Enterprise6 Mbps$40.27Unlimited
10FinlandSoneraSmall BusinessUp to 200 Mbps$37.60Unlimited

An analysis of entry-level fiber broadband packages for small and medium-sized businesses in the top 10 highest ranking countries on the World Bank’s Ease of Doing Business Ranking shows that the average price per megabyte of download speed is $3.61 (excluding Korea and Finland which have national broadband policies that have promoted extremely fast broadband access at prices that are far cheaper than global comparators). At an average price per megabyte of download speed of approximately $18, the common entry-level fiber broadband packages offered in the UAE to small and medium-sized businesses cost 5 times more than similar packages offered in the leading countries in the World Bank’s Ease of Doing Business Ranking. Businesses in the UAE also pay up to 2 times more than similar broadband packages offered to residential consumers.

Making Broadband More Affordable for Small and Medium-Sized Businesses

The price of broadband access for small and medium-sized businesses is critical to realizing the UAE’s smart city ambitions as well as enabling the nation’s entrepreneurs to compete effectively on a global scale. According to the International Telecommunication Union (ITU), increased competition is an effective mechanism to lower prices. ITU research shows that   duopolies lead to limited price competition which can reduce prices, but markets with more than three licensed operators experience the greatest falls in prices. Policy makers can also address affordability by regular monitoring, price regulation, and tiered services that ensure the revenue maximization objectives of telecom operators are aligned with broader national development strategies. Based on an international benchmark average price per megabyte of download speed of $3.61, implied monthly fees for entry-level broadband services for small and medium-sized businesses which would align the UAE with the most business friendly countries globally are shown below.

Implied Monthly Fee Schedule for Entry-Level Broadband Packages for Small and Medium-sized Businesses Based on International Benchmarks

Download/Upload SpeedImplied Monthly Fee (AED)
10Mbps/2MbpsAED 132.49
12 Mbps/3 MbpsAED 158.98
20Mbps/5MbpsAED 264.97
24 Mbps/6 MbpsAED 317.97
40Mbps/10MbpsAED 529.95
50 Mbps/12 MbpsAED 662.44
60Mbps/15MbpsAED 794.92
72 Mbps/20 MbpsAED 953.91
100 Mbps/25 MbpsAED 1,324.87

What’s At Stake

There are a growing number of SMEs using ICT to establish and grow their businesses. The UAE is the home to several ICT-based startups in the fields of internet search, employment, group buying, payment gateways, online retail, and real estate. While national studies such as the Global Entrepreneurship Monitor have quantified the approximate rate of entrepreneurship and employment impact in the UAE, they have not focused specifically on the additionally of ICT-based businesses on economic growth and employment generation.

The Global Entrepreneurship Monitor shows that the UAE has one of the lowest rates of total entrepreneurship activity of innovation-driven economies, and only 2.3% of new ventures are medium-tech or high technology ventures. Only 14% of entrepreneurial ventures created more than 20 jobs. These rather incomplete statistics suggest that the majority of firms in the UAE do not leverage ICT as the basis for their businesses, and the low number of such technology-driven ventures may not have a significant impact on employment creation without more focused government support. A good place to start is increasing affordability of entry level broadband packages to support the nation’s emerging entrepreneurship ecosystem.

Sources for Pricing Information
Singtel (Singapore): https://smemobile.bizportal.singtel.com/business/broadband/index.jsf
Spark (New Zealand): http://www.spark.co.nz/business/shop/internet/plans-and-pricing.html
TDC (Denmark): https://erhverv.tdc.dk/loesninger/internetabonnementer
Comcast (United States): http://business.comcast.com/internet/business-internet/plans-pricing
SK Telecom (South Korea): https://biz.skbroadband.com/data/data/Page.do?retUrl=/data/data/OpticLan
Hong Kong (Hong Kong Telecom): http://www.biz.netvigator.com/eng/bc_at_work_broadband_services.php
United Kingdom (British Telecom): http://business.bt.com/broadband-and-internet/fibre-broadband/
Sweden (Telia): http://www.telia.se/foretag/losningar/produkter/telia-kontor?intcmp=foretag-telia-kontor-host2015
Norway (Telenor): http://www.telenor.no/bedrift/bredband/
Finland (Sonera): https://www.sonera.fi/yrityksille/tuotteet+ja+palvelut/internetyhteys+toimistoon/yritysinternet/
UAE (DU): http://www.du.ae/smallbusiness/fixed/broadband/broadband-professionals
UAE (Etisalat): http://www.etisalat.ae/en/business/products-and-services/products/internetdata/business-super-overview.jsp

When it comes to news on socio-economic trends in the Arab World, government and business leaders turn to Trends Magazine. Tahseen Consulting is honored to have its insights on emerging trends in Arab philanthropy featured in the publication’s September issue.

Tahseen Consulting’s Chief Operating Officer, Wes Schwalje, spoke with Nikhil Inamdar, a leading voice on key business trends in the region, regarding the region’s transition from charity to strategic philanthropy. In a wide-ranging discussion, Schwalje discusses recently launched large scale philanthropic initiatives, emerging trends in strategic philanthropy, and what the future holds for Arab philanthropy.

Tahseen Consulting's insights on emerging trends in Arab philanthropy are featured in Trends Magazine's September issue

Tahseen Consulting’s insights on emerging trends in Arab philanthropy are featured in Trends Magazine’s September issue.

Nikhil Inamdar: What are the latest trends being witnessed in Arab philanthropy?

Schwalje: The three most transformative trends I see now are as follows:

High Net Worth Individuals Are Playing an Increasing Role: In 2010, Berkshire Hathaway CEO Warren Buffet and Microsoft co-founder Bill Gates established the Giving Pledge to persuade American billionaires to donate at least half their wealth to philanthropy or charitable causes either during their lifetime or after their death. This initiative has since been broadened to include philanthropists globally. In 2012, Tahseen Consulting conducted a study in which we looked at the potential impact of Arab billionaires signing the giving pledge. At the time, we estimated that $24 billion could be mobilized if Arab billionaires signed a pledge to donate their wealth to philanthropy. While many high net worth individuals have a strong tradition of giving informally, we are witnessing more wealthy Arab individuals making large scale philanthropic contributions transparently and publicly. Their motivations are no different from philanthropists in other parts of the world – wanting to give back to those less fortunate, gaining public recognition and social capital, establishing a legacy, and playing a greater role in shaping their country’s or region’s future. The $1.1 billion donation of Abdullah Ahmad Al Ghurair to capitalize a private foundation and Prince Al Waleed bin Talal’s pledge to direct most of his $32 billion in wealth to philanthropy, we are potentially witnessing a new phase of Arab philanthropy. We are likely to see several more of the Arab World’s approximately 36 or so billionaires making sizable pledge to philanthropic initiatives to strategically manage their wealth for the greater good.

The Transition from Charity to Strategic Philanthropy: In the past, charity in the Arab World was motivated by individual, unpublicized initiatives to give back to local communities. Giving was often focused on societal issues affecting local communities like poverty, housing, and heath care. Arab philanthropy historically has been individually motivated acts of kindness that did not typically address the root cause of societal issues. In the late 2000s, we witnessed a significant push in the region to institutionalize charity, philanthropy, and corporate social responsibility to make philanthropic efforts more strategic. This push towards philanthropic investment and strategic philanthropy remains rooted in the region’s religious traditions of Zakat and Waqf. In the early 2000s, many philanthropic efforts could still be characterized as donations to fund program execution by nonprofits. Philanthropists were primarily concerned about programmatic execution commensurate with the size of their donation with little regard for measuring impact and enhancing institutional capacity. A pivotal watershed occurred in 2007 when Sheikh Mohammed donated $10 billion to endow his namesake foundation the Mohammed bin Rashid Al Maktoum Foundation. The scope of this philanthropic gesture catalyzed a number of dialogues in the region about strategic philanthropy. The late 2000s saw the emergence of a number of endowed foundations in the region that began investing resources into nonprofit enterprises in order to increase their capacity to address the root causes of regional development challenges. By 2015, a number of the initiatives launched in the early 2000s and earlier have adopted strategic approaches to philanthropy which involve building internal capacities to deliver programs, developing the institutional capacities of nonprofit partners and grant recipients, pursuing programs with well thought out approaches that address the root causes of development issues, and strong systems of monitoring and evaluation to measure impact and value for money.

Arab Philanthropy is Playing an Increasingly Important Role in Global Development: Many of the region’s philanthropic institutions have become involved in international development and engage regularly with multilateral institutions and bilateral donors. Increasingly large Arab philanthropic initiatives have been able to shape the policies of multilaterals and bilateral institutions through their funding, provide input on program design and development, and contribute funding for scaling up successful initiatives.

Nikhil Inamdar: What distinguishes Arab philanthropy from global philanthropy?

Schwalje: In addition to the relationship between philanthropic giving and religious traditions, a unique aspect of philanthropy in some of the Arab countries is the emergence of hybrid foundations which are funded by government or quasi-governmental funds and private donors. In other regions, public charities generally receive their funding from the public through grants from individuals, government, and private foundations, while private foundation generally receive funds from a single source, such as an individual, family, or corporation. In this respect, the definition of what constitutes a charitable organization and to whom it should be held accountable is not as clear cut as elsewhere. Adding to this confusion is the fact that many of the region’s philanthropists wear multiple hats in business and government.

Nikhil Inamdar: What will need to happen in terms of regulation etc. for this segment to mature like the way it has in Western economies like the US?

Schwalje: In many Arab countries, civil society laws make the registering of philanthropic organizations immensely difficult and can preclude fund raising. Such laws have the potential to negatively influence the development of civil society. Laws which might also serve to motivate individual giving and corporate philanthropy, such as tax deductible charitable giving, are also lacking. Emerging forms of philanthropy, such as venture philanthropy and crowdfunding, currently exist in regulatory grey areas which require regulation to ensure they can thrive in the region.

Nikhil Inamdar: Does philanthropy need to become more organized in terms of impact assessment, audit etc. so as to give the sector a more formal structure?

Schwalje: Several elements are required to Advance Arab Philanthropy:

Mapping Giving Patterns: More effort is needed to map philanthropic giving to determine what entities are giving and to whom in order to identify unmet needs. An interesting initial attempt to map private philanthropic contributions is the UAE’s Annual Foreign Aid Reports which included information on giving by many of the UAE’s philanthropic organizations. More information on giving patterns with promote coordination and reduce overlap of efforts.

A Focus on Improving Delivery Capabilities of Beneficiaries Linked to Funding: In many cases, regional nonprofits lack the capabilities and internal controls to absorb and manage large-scale donor contributions. This has promoted a tendency of Arab philanthropists to work with international organizations over home-grown Arab institutions. Capacity strengthening of Arab donor recipients linked to philanthropic contributions will be required to strengthen the region’s civils society institutions to deliver more effectively on large-scale initiatives and attract larger philanthropic donations.

Improved Capabilities to Analyze Value for Money: Because of the youth of strategic philanthropy in the region, there are several organizational capabilities that philanthropic organizations need to improve. This includes identifying program objectives to determine the strategic intent and envisioned impact of initiatives, examining the ongoing relevance and validity of programs, ensuring efficiency and economy of activities, and assessing the impact of programming.

While Saudi Arabia’s publishing industry faces challenges, there are significant opportunities to revitalize the sector for socio-economic development says a new study by Tahseen Consulting

If Saudi Arabia addresses key industry challenges, the publishing, media, and digital content industries could generate $3.6 billion and create 9,800 additional jobs by 2017, says a new study from Tahseen Consulting.

The study, which is being released today, was conducted to support the Saudi Publishers Association’s recent successful bid to gain full membership in the International Publishers Association. Saudi Arabia is the fourth country in the Arab World to achieve full membership in this prestigious international organization which represents publishers’ interests globally. The report comes as Saudi publishers are preparing to attend the 34th Sharjah International Book Fair starting on November 4th.

“Since 1990, Saudi Arabia’s publishing industry has changed dramatically. In the early to mid -Nineties, the industry was dominated by small, fragmented publishers and specialized retailers,” says Wes Schwalje, Chief Operating Officer of Tahseen Consulting and author of the study. “By the mid-Nineties, we began to observe the emergence of integrated companies specialized in publishing and retail. There was a large shift from small bookshops to major super-stores with national coverage and the initial emergence of online retail channels that cater to emerging preferences for e-books and digital content. Today, we are witnessing the further growth of large, integrated companies with publishing and distribution capabilities, increased consumption of digital content due to high levels of mobile device penetration, and the embrace of e-commerce by Saudi publishers and consumers.”

The Saudi Publishing Industry Will Need to Address Several Challenges

Tahseen Consulting’s study shows that the publishing, media, and digital content industries will need to address a number of challenges to unlock growth. While the Saudi publishing industry currently contributes less than 1% of GDP, international evidence suggests that cultural industries can contribute up to 2-3% of GDP. If the publishing media, and digital content industries can reach this international benchmark, the cultural industries in Saudi Arabia could contribute significantly to economic diversification and employment generation.

The study identifies the need for a government-led national publishing strategy that prioritizes needs and challenges, identifies strategies for advancing the industry, assigns responsibilities, defines performance metrics, and establishes an implementation timeline. Several specific recommendations for policymakers are made by the authors to enable industry growth:

  • Stimulating private investment in the publishing, media, and content industries
  • Increasing exports of publishing, media, and digital content regionally
  • Increasing education and training programs to developing creative industry skills
  • Encouraging publishers to embrace digital publishing and online sales
  • Improving industry data collection and analysis
  • Making major book fairs more appealing to families
  • Developing more targeted reading promotion programs
  • Increasing early positive reading habits
  • Developing a strategy to transform libraries
  • Simplifying the licensing and regulatory regime for publishers
  • Improving copyright protection and enforcement

“While a number of institutions, awards, and festivals seek to build literary culture in Saudi Arabia, there are no specific polices for the development of the publishing industry. To succeed in the evolving global publishing market, Saudi publishers will need to be supported to become more open to change, adapt to evolving digital formats, and embrace online distribution strategies,” says Walid Aradi, Chief Executive Officer of Tahseen Consulting and a coauthor of the study.

Increasing Internationalization of the Saudi Publishing Industry

As a full member of the International Publishing Association, the Saudi government and industry bodies now have a much larger responsibility to publishers and the global community to address industry challenges and to unlock opportunities presented by industry internationalization and growth. If industry challenges are addressed proactively by key stakeholders, the publishing, media, and digital content industries hold great potential in contributing to Saudi and regional intellectual life, enhancing social and cultural development, and providing economic opportunity.

Founded as a news weekly magazine in 1933, U.S. News and World Report is well known for its analysis of educational institutions in its annual college rankings. Tahseen Consulting is honored to have its work on Arab women studying and working STEM fields in the Arab World featured in two recent article in the U.S. News and World Report.

The State of Higher Education in the Middle East article references a Tahseen Consulting study in which we explored the barriers facing women in entering science, technology, engineering, and mathematics fields in the GCC in an article in Forbes Middle East. The original article is available at http://tahseen.ae/blog/?p=980.

U.S. News’ article More Arab Women Studying STEM features comments by Tahseen Consulting’s Wes Schwalje on competitions as a mechanism of exposing female students to STEM fields.

When it comes to news on economic trends and policies in the UAE, government and business leaders turn to the Abu Dhabi Council for Economic Development’s Economic Review. Tahseen Consulting is honored to have its work on building sustainable economies in the Arab World highlighted in the publication’s April issue. We have posted the full article below.

Tahseen Consulting’s Chief operating Officer, Wes Schwalje, spoke with representatives from the Abu Dhabi Council for Economic Development regarding his thoughts on the how the concepts of sustainability and knowledge-based economy are evolving into economic policies in the UAE. In a wide-ranging discussion, Schwalje discusses the UAE’s aspirations, its achievements thus far, and potential barriers to progress.

Abu Dhabi Council for Economic Development: What are the key factors to consider when creating a ‘sustainable economy’ that will support many generations to come?

Schwalje: The concept of sustainability as a policy goal is attractive to countries precisely because the concept lacks specificity and means different things to different stakeholders. As it applies to economic development, many countries have further equated the concept of sustainability with the equally imprecise concept of knowledge-based economy. The ambiguity of such terms have been used globally by governments to gain political consensus on large-scale economic reforms. In the Arab countries such concepts have become integrated into national visions and development strategies, such as the UAE’s Vision 2021, National Agenda, and Abu Dhabi Economic Vision 2030, to provide a shared overarching vision for economic development. Debates surrounding such policy objectives have highlighted and promoted policy dialogue on key development challenges that the Arab World faces and brought coherence to a variety of socioeconomic development discourses.

Because concepts such as sustainability and knowledge-based economy have become gradually contextualized to the case of the Arab World, the region has converged on several consistent themes that are closely associated with the term “sustainable economy.” While there is some country to country variation in the region, generally, sustainable economic development in the GCC countries concerns a variety of socio-economic factors: economic diversification to reduce dependence on commodities through entry into new and complementary industries; private sector development to improve the performance of small and medium sized businesses and encourage entrepreneurship; integration of nationals into the private sector workforce; strengthening the link between education systems and the labor market to reduce youth unemployment; increasing female labor market participation; strengthening innovation systems; attracting foreign direct investment; integration into the global economy; addressing national development imbalances and income disparities; environmental sustainability, protection of identity and language; and increasingly political participation and democratic reform.

Abu Dhabi Council for Economic Development: How far do you feel Abu Dhabi has come in this respect to date?

Schwalje: After a country has defined what they mean by sustainable economic development, the next challenge a country like the UAE faces in determining progress is devising appropriate indicators to measure progress. In advancing a set of National Key Performance Indicators associated with the National Agenda, the UAE has made an initial attempt at assessing progress towards sustainable economic development. National key performance indicators related to economic progress track measures such as non-oil GDP growth, GNI per capita, FDI inflows, global competiveness, national labor market participation and Emiratization rates, ease of doing business, SME contribution to GDP, entrepreneurship levels, innovation, R&D expenditure, and employment in knowledge-based industries. A key challenge remains whether a disparate range of objective measures can really provide a coherent overall picture of national well-being and progress. It will be essential for the UAE to increasingly complement outcome-based objective indicators of national progress with subjective well-being data that measure well-being across a variety of other dimensions such as education, health, income and wealth, and the environment. This will require the regular collection of nationwide data from large and representative samples to provide a coherent overall picture of well-being.

Abu Dhabi Council for Economic Development: What pitfalls must Abu Dhabi avoid when attempting to build a sustainable economy?

Schwalje: Many of the countries from which normative economic policy guidance has come from surrounding knowledge-based economic development now face unforeseen economic challenges. In many of the countries which the Abu Dhabi Economic Vision 2030 benchmarked, more education, more innovation, and policy and institutional reform have not necessarily led to higher levels of national well-being. For example, economic policy in Ireland has not ultimately produced high skills, high wage jobs for youth or adequately addressed socioeconomic development challenges. In fact, Ireland’s economic policies have led to record high youth unemployment and numerous social challenges for the country’s youth. Cases like Ireland suggest that a regional discussion on whether the economic prescription of the transition to knowledge-based economies remains the right course.

A key question is whether Arab economic development strategies based on the transition to knowledge economies have sufficiently taken into account the changing economic environment where knowledge is becoming cheaper and commoditized by emerging economies. Decreasing pressure on wages due the globalization of knowledge industries and growth in high skill, low cost talent in emerging countries challenges the assumption that more education, higher levels of skills, and national labor markets can provide prosperity to nations. Because competition for dominance in knowledge-based industries is now global and emerging countries are moving up the value chain to perform increasingly more sophisticated activities, plans to enter knowledge-based industries are susceptible to the globalization of low cost, high skill competition from beyond the region’s borders. What may look like a sector that can generate high skill, high wage jobs today may tomorrow be an industry that can be outsourced and performed by high skill, low cost knowledge workers elsewhere.

Abu Dhabi Council for Economic Development: How can Abu Dhabi encourage more entrepreneurship?

Schwalje: Many countries have geared their entrepreneurship policy interventions around international studies such as the Global Entrepreneurship Monitor, Ease of Doing Business Index, and Global Entrepreneurship and Development Index. However, while these frameworks are useful, they may not adequately capture the difficulties faced in the UAE. Much more qualitative research of existing entrepreneurs is required to advance this dialogue further. This dialogue must not be confined to emirate-level challenges but be broadened to involve country level policy interventions. The focus must be on UAE-wide policy interventions that are consistent across all emirates rather than emirate-level interventions that create a different playing field across the country.

Abu Dhabi Council for Economic Development: Which sectors do you feel offer the most potential for economic diversification in Abu Dhabi? And how can Abu Dhabi fast-track these?

Schwalje: The Abu Dhabi Economic Vision 2030’s focus on horizontal and vertical diversification into capital-intensive, export-oriented sectors sufficiently balances risk with the uncertainty created by globalization of knowledge industries. Recent declines in global commodity prices further support this relatively cautious approach to diversification and industrial development.

Abu Dhabi Council for Economic Development: Which countries might Abu Dhabi try to emulate when pursuing its ambitious economic sustainability program?

Schwalje: Abu Dhabi would be wise to broaden its current benchmarking strategy to define its economic sustainability program to include two types of countries: countries which generate a significant portion of their GDP from oil exports and countries which have economies that are reliant upon workforces imported from abroad. Normative economic policy should not just be drawn from rich, developed countries which have purportedly transitioned to knowledge-based economies but also incorporate developing country peer benchmarks in South America, Asia, and Africa. Non OECD peer benchmark countries may provide successful practices of economic development strategies that have focused on the export of low-cost, high-end knowledge-based services or the more traditional low-cost export-oriented manufacturing strategies while making incremental, evolutionary advances up the value chain. The experiences of countries such as Brunei, Equatorial Guinea, Trinidad and Tobago, Russia, Venezuela, Gabon, Kazakhstan, and Mexico could provide a more well-rounded rounded set of benchmarks of oil exporting countries from which to derive learnings. Looking at practices from labor importing countries such as Hong Kong, Switzerland, and Australia could also expand upon the analysis in the Economic Vision 2030.

Abu Dhabi Council for Economic Development: Is two decades enough time to build a fully diversified economy? If yes, why?.. and if no, why not?

Schwalje: It is difficult to establish what the end goal should be. In the GCC, economic diversification means reducing heavy dependence on the oil sector by developing a non-oil economy, non-oil exports, and non-oil revenue sources. It will also require reducing the role of the public sector by promoting private sector development. Based on rather sparse evidence, it seems likely that GCC economies will have significant difficulties in their diversification efforts. In the Arab World the gross value added of knowledge-based industries is the lowest in the world making up 39% of regional gross domestic product as compared to 74% in OECD countries. The contribution of value added to regional gross domestic product from knowledge-based industries has remained virtually constant over the last decade. From 2000 to 2009, the percentage share of employees in knowledge-based industries in the Arab World has increased by a compound annual growth rate of .8% in OECD countries with knowledge-based industries employing 77% of workers. Based on sparse data from 2000 to 2009 from 14 countries in the Arab World representing 70% of the region’s population, 61% of the population is employed in knowledge-based industries. Employment in knowledge-based industries has increased only negligibly over the last decade. These few crude measures provide evidence that economic diversification efforts have not necessarily produced meaningful sectoral shifts in gross domestic product attributed to knowledge-based industries or led to employment in knowledge-based sectors.

Beginning in the late Nineties, Qatar launched a comprehensive set of education reforms to more effectively align its education and training system with its macroeconomic policies aimed at advancing towards a knowledge-based economy. However, technical vocational education and training (TVET) has not been a significant focus of educational reforms.

Though the need for more effective TVET systems emerged as early as the 1940s when Qatar started producing and exporting oil, the government has primarily focused on supply side, expansionary educational policies aimed at establishing new TVET institutions. However, many of the TVET governance institutions that prevent underinvestment in skills, provide adequate regulation, and coordinate stakeholders are still in a nascent state.

TVET policies in Qatar have largely proceeded without a clear conceptualization of the scope of TVET and which types of institutions should be included in the TVET policy and which ones should be excluded. TVET faces an identity crisis in which people are unhappy with the name, the image, and reputation. It remains unclear how technological TVET can be, what fields it encompasses, and whether TVET leads to jobs which are considered acceptable to Qataris.

In the presentation below, we highlight some of the issues Qatar will need to address to develop a national TVET strategy which overcomes existing gender issues.

In his recent paper Open Data: A Paradigm Shift in the Heart of Government Ali M. Al-Khouri, Director General of the Emirates Identity Authority, cited Tahseen Consulting’s work on how social media technologies can be used to increase transparency and openness of Arab governments.

Al-Khouri cites Tahseen Consulting’s white paper An Arab Open Government Maturity Model for Social Media Engagement in explaining the need for governments to reflect joined up policy by reducing data silos. Tahseen Consulting’s social media maturity model challenges previous models of e-government and open government maturity based on the experiences of Western countries by offering region-specific guidance that accounts for the unique governance tradition of Arab public sector entities.

Our Arab government social media maturity model has been cited as a potential model for Korean public sector entities, highlighted by the World Bank as a valuable approach in communicating with Arab youth, and referenced in the World Wide Web Foundation’s Open Data Barometer.

Schwalje outlines 5 key challenges that GCC countries must overcome to keep women in the labor force

One of the most widely reported challenges that GCC countries and companies now face is the retention of highly qualified female employees. Retention can be particularly problematic as women try to strike a balance between familial responsibilities and succeeding in the workplace. Schwalje asked the panel to reflect on five key challenges: overcoming social perceptions about occupations traditionally dominated by males, implementing female-friendly workplace policies, enabling work-life balance, developing family-friendly facilities, and articulating clear career trajectories for women.

Panel members included Khawla Al Mehairi, Vice President of Marketing and Corporate Communication, Dubai Electricity and Water Authority, Khaled Al Khudair, Founder, Glowork, and Deborah Gills, Chief Executive Officer, Catalyst.

A copy of Tahseen Consulting’s analysis supporting the importance of addressing the five panel focus themes is below along a with video that captures Schwalje’s thoughts on the way forward.