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Tahseen Consulting’s CEO Walid Aradi appeared on Dubai TV’s Money Map to discuss the role of entrepreneurship policy in economic development and meeting the region’s youth unemployment challenge. Aradi sat down with Zeina Soufan, host of Money Map, to discuss Tahseen Consulting’s work on entrepreneurship policies and programs in the Arab World.

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The Arab World generally has low rates of female entrepreneurship. Region-wide, women own 13% of firms, which is lower than most other regions including Europe, Central Asia, East Asia, and Latin America (Chamlou, 2008). One reason for low official rates of female entrepreneurship in the region is that a considerable amount of female entrepreneurship is conducted informally through home-based businesses which are not captured by official statistics. Traditional beliefs about the role of women and familial obligations remain a barrier to increased levels of entrepreneurship (Aradi, Buckner, & Schwalje, Forthcoming).

In the GCC, evidence suggests that female entrepreneurship rates are substantially lower than male entrepreneurship rates. In Qatar, for example, female owned businesses constitute only 3.5% of all businesses (Organization for Economic Cooperation and Development, 2009). Among respondents to a Global Entrepreneurship Monitoring report on entrepreneurship in the UAE, 11.8% of male respondents were early stage entrepreneurs while only 7.6% of women were early stage entrepreneurs. However, male respondents in the UAE were much more likely to be established entrepreneurs – at 7%, while only 0.9% of females were established entrepreneurs (El-Sokari, Vanhorne, Zeng-Yuhuang, & Alawad, 2013). In Saudi Arabia, approximately 12% of males are engaged in early stage entrepreneurship while only 6% of women are engaged in early stage entrepreneurial activities (Global Entrepreneurship Research Association, 2013). Such findings suggest males in the GCC have generally higher rates of entrepreneurship and are more likely to own businesses which persist beyond the startup stage.

View Our Other Work on Entrepreneurship and Technical Vocational Education and Training in the Arab World

Promoting Entrepreneurship in the Arab World: The Need for Tailored National Approaches

Tahseen Consulting’s Work on Female Participation in Technical and Vocational Education and Employment Featured in Qatar Today

Women entrepreneurs face a number of obstacles which serve to depress female entrepreneurship rates. A study of female entrepreneurship in the region found that while networks of support have been successful in some countries such as Tunisia, Morocco, and Lebanon, such networks have been less successful in other Arab countries. The study finds that “businesswomen networks are in their infancy and face several obstacles such as attracting funding, in the face of donor priorities for provision of microfinance, and growing the network” (Organization for Economic Cooperation and Development, 2009, p. 5). Nonetheless, networks that support female businesswomen, such as the Bahrain Businesswomen Society, Business and Professional Women – Kuwait, Omani Women’s Association, Dubai Business Women’s Council, and the Qatar Women Business Forum, have been quite active over the past few years promoting female participation in business with events and development programs (Organization for Economic Cooperation and Development, 2009). Support from such organizations may prove an effective strategy for encouraging more women to become entrepreneurs and to overcome cultural resistance to female entrepreneurship. Across the GCC, initiatives aimed at supporting women entrepreneurs are much more likely to take the form of professional associations or committees housed within chambers of commerce. Qatar and Saudi Arabia appear to be the only countries in the GCC with dedicated business centers and incubators that exclusively serve women (Organization for Economic Cooperation and Development, 2013).

Females in many GCC nations also face unique obstacles to obtain funding to start their businesses. In addition to the lack of seed and venture funding that affects the majority of countries in the Arab region, research indicates that females in Qatar require guarantors in order to obtain business loans from banks. In Saudi Arabia, surveys and interviews with female entrepreneurs found that 82.2% of registered businesswomen rely on personal savings to fund their businesses and do not seek external funding (Ahmad, 2011). These female entrepreneurs also stated that they “believe that many social and regulatory interactions are more challenging for them because of their gender,” and, as a result, they relied substantially on male relatives to complete business transactions (p. 612).

In the UAE, a survey with entrepreneurs who had closed their businesses found that the majority of female entrepreneurs who closed their business did so because of personal reasons. This contrasts sharply to males, the majority of whom stated that they closed their business because they were not profitable (El-Sokari et al., 2013). It is not clear from the report what personal reasons are causing women to close their businesses, but the report calls for more research to understand why women are more likely to discontinue their business for non-business related matters.

Low rates of female entrepreneurship should not be thought to imply that women are not interested in entrepreneurship. According to interviews in Qatar, entrepreneurship is an appealing career choice for women because it allows them to have flexibility over their schedule and can often be pursued in addition to full-time public sector work. High levels of domestic staff employed in Gulf homes also means that women often have time for entrepreneurship. Interviews suggested that many female entrepreneurs in Qatar maintain their day job in the public sector while they pursue entrepreneurial endeavors to ensure a steady income and retain rights to a pension. However, it is not well understood what circumstances must be present in order for such entrepreneurs to make the step to pursue their entrepreneurial endeavors full time (Aradi et al., Forthcoming).

A recent survey of Gulf residents also found that women have many of the characteristics needed to be successful entrepreneurs, but they are less oriented towards entrepreneurship. The survey found that women in GCC countries are generally as likely as men to report being optimistic, profit-oriented, and persistent (Bugshan, 2012) ). Nonetheless, women in GCC countries are significantly less likely to say that they have access to mentors who could offer advice about managing a business. Figure 13 shows that the gender gap is substantial in some countries, at 15% in the UAE and 19% in Bahrain. This study suggests that the needs of male and female entrepreneurs differ slightly, and one role for regional entrepreneurship initiatives is to link females with business networks and possible mentors.

Emerging Support Systems for Female Entrepreneurship

Many GCC nations have recently developed entrepreneurship education programs to develop young people’s interests and capabilities in entrepreneurship. Increasingly, these programs focus on women either explicitly or implicitly due to program design. Although the UAE offers no specific programs that target the needs of female entrepreneurs, women entrepreneurship is being supported through the Sougha initiative which was founded by the Khalifa Fund for Enterprise Development “with the aim to create socio-economic opportunities for Emirati artisans and preserve the Emirati heritage by providing the needed support to achieve social good” (El-Sokari et al., 2013, p. 23). Because the focus of the program is handicrafts, participants tend to be women. Sougha has resulted in sales over $1 million and provided income to 148 Emirati families (El-Sokari et al., 2013). Similarly, in Saudi Arabia, the government “offers 3,000 Saudi Riyals a month for women to start new businesses” (Dubai Women Establishment, 2009, p. 40).

In 2006, Oman’s new Vision for Education was launched which included the specific objective of developing students’ entrepreneurial skills. One of the programs launched under the new vision, SANAD, was established to help “job seekers among citizens with opportunities to gain their living and to support self-employment projects and develop small businesses” (Ministry of Manpower, 2013). The program includes training on business skills and also allows would-be entrepreneurs to submit proposals for small start-up loans. As of 2010, the program had supported over 28,000 Omani youth with start-up funds and had provided at least 7,000 Omanis technical and vocational training (Ministry of Manpower, 2013). However, no public data is available on the percentage of beneficiaries who are female or whether the program has led to female firm creation and increased employment. Prior research in non-GCC Arab nations has found that entrepreneurship and labor market programs often tend to “lack the necessary mix of design features that make programs effective” (Angel-Urdinola, Semlali, & Brodmann, 2010, p. 1).

Despite widespread support for entrepreneurship training and assistance programs in the GCC, very little data on the participation or success of women has been collected. Programs such as SANAD offer crucial support for entrepreneurship, but, without an explicit engagement with women’s communities, it is likely that women are not fully benefiting from such initiatives. As of now, SANAD does not offer any training programs specifically for females nor does it appear to track the number of women trainees, projects supported by women, or the percent of women beneficiaries. The example of SANAD from Oman is indicative of a widespread issue across the region concerning the infrequent use of performance monitoring and evaluation of public sector training and active labor market programs. Across the region, more data should be disaggregated by gender and participants tracked over time to understand who is benefiting and how female entrepreneurs’ proposals and businesses fare compared to those of men. This level of data collection would allow policymakers to more effectively target trainings to the specific needs of women entrepreneurs.

Based on the scarcity of initiatives which specifically target aspiring female entrepreneurs, it appears that more entrepreneurship education and training for women is needed in the GCC. While most GCC nations have supported entrepreneurship centers to improve the environment for entrepreneurship including providing funding and training, reducing bureaucracy, and establishing business incubators very few of these centers specifically cater to women’s needs. Moreover, without a critical presence of other women, females who desire to be entrepreneurs may not feel comfortable in such centers. There are few entrepreneurship centers specifically targeted to the distinct types of businesses women may found or designed to support their distinct needs. One example that is potentially replicable in the GCC is the Roudha Center in Qatar which is a business incubator specifically focused on training and enabling female entrepreneurs.

Due to the high number of females who exit the labor market in their thirties, one potential population segment for entrepreneurship training is college educated women who have exited the labor market after child birth and want to open a business to have flexibility in their working hours. Another area of focus may be female secondary school leavers and high school graduates who could benefit from entrepreneurship training to supplement their incomes. Female students are also a potential training beneficiary group that is often overlooked. According to interviews in Qatar, entrepreneurship training is rarely offered in K-12 schools due to lack of an approved curriculum. Rather than complementing existing curricula, females are exposed to entrepreneurship much later in their school or have to seek out such training at specialized institutions outside the formal education system (Aradi et al., Forthcoming). In the UAE, the Khalifa Fund for Enterprise Development has initiated two types of training programs in both government and private schools to “create a dynamic entrepreneurial culture”(Khalifa Fund for Enterprise Development, 2013). However, it is unclear how many students actually benefit and what the long-term outcomes of the program are.

Prior interviews suggest that, in GCC countries, entrepreneurship policies and educational policies are not necessarily aligned and are infrequently viewed as complimentary under national TVET policies. For example, policy makers and institutional administrators in Qatar mentioned the need to integrate entrepreneurship more effectively into the education system from an early age. Study participants also pointed to a need for career guidance to accommodate entrepreneurship so that it might be possible for students to differentiate between choices after secondary schooling like starting a business, joining the armed forces, seeking a job immediately, attending a TVET program, or continuing their studies at the higher education level (Aradi et al., Forthcoming).

References

Ahmad, S. (2011). Businesswomen in the Kingdom of Saudi Arabia: Characteristic, Growth Patterns and Progression in a Regional Context. Equality, Diversity and Inclusion: An International Journal, 30(7), 610-614.

Angel-Urdinola, D., Semlali, A., & Brodmann, S. (2010). Non-Public Provision of Active Labor Market Programs in Arab-Mediterranean Countries: An Inventory of Youth Programs.  Washington, DC: World Bank.

Aradi, W., Buckner, E., & Schwalje, W. (Forthcoming). Female Access to Technical Vocational Education and Training and Labor Market Outcomes in Qatar.  Paris: United Nations Educational, Scientific and Cultural Organization.

Bugshan, F. (2012). Lack of Mentors May Hinder Women’s Entrepreneurship in GCC. Washington, DC: Gallup.

Chamlou, N. (2008). The Environment for Women’s Entrepreneurship in the Middle East and North Africa Region.  Washington, DC: World Bank.

Dubai Women Establishment. (2009). Arab Women Leadership Outlook 2009-2011.  Dubai: Dubai Women Establishment.

El-Sokari, H., Vanhorne, C., Zeng-Yuhuang, & Alawad, M. (2013). Entrepreneurship – An Emirati Perspective.  Abu Dhabi: Zayed University.

Global Entrepreneurship Research Association. (2013). Global Entrepreneurship Monitor Key Indicators.  Retrieved December 1, from Global Entrepreneurship Research Association http://www.gemconsortium.org/key-indicators

Khalifa Fund for Enterprise Development. (2013). Khalifa Fund in Schools.   Retrieved November 27, 2013, from http://www.khalifafund.ae/En/BuildYoungEntrepreneurs/Pages/KhalifaFundinSchools.aspx

Ministry of Manpower. (2013). Sanad: An Overview.   Retrieved November 27, 2013, from www.manpower.gov.om/en/sanad_home.asp

Organization for Economic Cooperation and Development. (2009). Implementation of the 2007 Declaration on Fostering Women’s Entrepreneurship in the MENA Region.  Paris: Organization for Economic Cooperation and Development.

Organization for Economic Cooperation and Development. (2013). Directory of Initiatives Supporting Women Entrepreneurs in the Middle East and North Africa.   Retrieved November 27, 2013, from http://www.oecd.org/mena/investment/menawbfdirectory.htm

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In January 2013, we highlighted the issue of skills shortages and gaps potentially limiting the ambitions of aspiring Islamic finance hubs in the Arab World. A key challenge that all aspiring Islamic finance hubs face is developing a banking workforce with Sharia knowledge, the ability to clearly explain Islamic banking products, and the ability to contribute to product development. Without these competencies staff in Islamic financial institutions have difficulties explaining products to customers and are unable to contribute to product innovation. In the run up to the recent Global Islamic Economy Summit in Dubai, our research on skills needs required by emerging Islamic financial hubs was cited in by several news outlets and institutions in the GCC.

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View Our Other Work on Islamic Finance and Banking in the Arab World

In our blog post Skills Shortages and Gaps May Limit the UAE’s Islamic Finance Hub ambitions (http://tahseen.ae/blog/?p=597), we highlight that the UAE, for example, faces tremendous skills shortages in forging a vibrant Islamic finance industry.

In our blog post Tahseen Consulting’s CEO Sees Strong Growth Potential for Local Banks in the UAE (http://tahseen.ae/blog/?p=735), Walid Aradi outlines why local banks have been gaining market share from international competitors in the UAE

In our blog post Tahseen Consulting Analysis Cited by Abu Dhabi Council for Economic Development in its Analysis on the Growth of Islamic Finance in the UAE (http://tahseen.ae/blog/?p=694), Tahseen Consulting’s Wes Schwalje comments of on the growth of Islamic finance in Abu Dhabi

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Tahseen Consulting’s research on open data initiatives in several countries in the Arab World is featured in the first annual Open Data Barometer which explores the spread of open data policy and practice across the world. The report, funded by the Open Data Institute, World Wide Web Foundation, Canada’s International Development Research Centre, and the UK Department for International Development, shows that many of the open data initiatives in the Arab World are lacking.

View our other work on open data in the Arab World

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We recently hosted Shari Hubert, Associate Dean of MBA Admissions, Georgetown University McDonough School of Business, for a discussion on how Arab students can navigate the US graduate and MBA admissions process. A recording of the webinar is available at www.tahseen.ae/r&iuniversityadmissions.html#header.    

Read more about our Admissions & Scholarship Support Services

What You Will Learn

  • The personal and career benefits of a graduate degree
  • How to select the right institutions to apply to
  • What admissions officers look for in applications
  • Techniques to improve your chances of admission

Shari Hubert, Associate Dean of MBA Admissions, Georgetown University McDonough School of Business discuses

  • What you need to know before applying to Georgetown
  • What the admissions team looks for in a candidate
  • What separates the McDonough School of Business from other top MBA programs

Other Tahseen Consulting Webinars on University Admissions: An Introduction to the American University Admissions Process

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Walid Aradi outlines why local banks have been gaining market share from international competitors in the UAE

When it comes to business news and regional economic analysis, government and business leaders in the GCC turn to Gulf Business. Tahseen Consulting is honored to have its work highlighted in the publication’s October issue. We have posted the full article below.

Recently, Tahseen Consulting’s Chief Executive Officer, Walid Aradi, spoke with Ryan Harrison from Gulf Business regarding his thoughts on the competitive landscape evolving in the UAE retail and commercial banking sector. In a wide-ranging discussion, Aradi explained some of the reasons why local banks such as Abu Dhabi Commercial Bank, Emirates NBD, Mashreq, and First Gulf bank have been performing well while internationals have been downsizing their operations.

Gulf Business: What is driving this shift and how long will it continue?

Aradi: As a consequence of the economic crisis, some international outfits reassessed their presence in the region and redirected their resources back to their home markets, as they were seeking to limit their exposure, focus on rebuilding their competitive advantage in their home countries, and improve their balance sheets. This left the local banks, which came off a period of consolidation, ready to pick up the slack should the economic conditions improve.

With economic growth hovering around 4%, and an increased appetite to lend due to the introduction of loan caps and more defined lending criteria, banks in the UAE responded to the increased pace in government infrastructure projects by aggressively marketing their existing products, and offering new ones.

Gulf Business: How much business is for the taking?

Aradi: The UAE Monthly Banking Indicators, published by the Central Bank, show that despite experiencing modest year on year growth of 2.6% in 2012 in loans and advances, the increase in the first seven months of 2013 exceeded 4.3%. Championing this growth were local banks such as ADCB, Emirates NBD, Mashreq and First Gulf banks, which competed aggressively to fill the gap left behind by the downsizing of operations among some international banks.

While local banks managed to increase their share of the corporate and consumer lending markets, they will find it increasingly difficult to maintain past levels of profitability. This is because while the growth in the economy is expected to be solid over the next two years, it will not reach the spectacular levels posted in 2005 or 2007, thus limiting the ability of local banks to expand their revenues. Additionally, changes to capital and liquidity requirements have raised cost pressures on the banking sector.

Gulf Business: How can local banks improve their products and services to build their corporate lending business?

Aradi: To maintain their margins, local banks must bolster their revenues by expanding their product offerings, enhancing services to higher margin segments of the business, building upon their knowledge of the local market from operational and marketing perspectives, attracting global talent, and forming alliances with global banks to overcome their limited international footprint. On the other hand, local banks should aggressively pursue reforms to their business strategies by enhancing their systems and moving towards more efficient payment infrastructures.

Without fully capitalizing on the opportunity to solidify their place in the market, local banks will find themselves having to fend off pressures from global banks when their appetite to invest in emerging markets returns as a consequence of improved market conditions in their home countries.

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Admissions consulting services will build on Tahseen Consulting’s education and national skills systems practice, highlighting the importance of accessing quality education to socioeconomic development in the Arab World 

Tahseen Consulting, one of the Arab Region’s fastest growing management and public policy consulting firms, today announced details of its new university admissions and scholarships consulting practice. The practice will counsel national scholarship providers on how to shape large scholarship programs to better meet the needs of national economic development plans and assist Arab students to access elite international universities.

The announcement follows wide recognition of Tahseen Consulting’s work in the field of education and national skills systems by international organizations such as the United Nations Education, Scientific, and Cultural Organization as well as regional think tanks like the Sheikh Saud bin Saqr Al Qasimi Foundation for Policy Research. Tahseen’s work has shed light on a mismatch between the scholarship programs of countries and companies in the region and national economic ambitions resulting in many students receiving scholarships to attend universities abroad in fields unrelated to the economic trajectory of their home countries.

Tahseen Consulting’s Related Work

Read about Tahseen Consulting’s work on creating national skills formation for knowledge-based development published by the Sheikh Saud bin Saqr Al Qasimi Foundation for Policy Research

Traditional university admissions consulting has focused solely on helping students be more competitive when it comes to their admissions profile. However, Tahseen Consulting’s new practice will identify economic growth segments in Arab countries and counsel students as well as scholarship providers to target in demand employment fields critical to economic development and the transition towards knowledge-based economy. Tahseen’s research indicates Arab students studying abroad contribute approximately $8 billion per year to other economies. As many Arab students studying abroad are sponsored by their governments, it is important that this money is well spent on students pursuing fields in line with national economic development strategies and return home with sufficient qualifications to work in emergent industries.

“Tahseen Consulting has been a catalyst for change in educational policy in the region. We have always devoted significant resources to developing innovative insights and methodologies to help companies and governments solve some of their toughest educational policy challenges,” said Walid Aradi, Chief Executive Officer of Tahseen Consulting. “According to our research approximately 70% of Arab students studying abroad are in 7 countries which include Australia, Canada, France, Germany, Malaysia, US, and UK. However, in many cases students are studying in fields which are not necessarily aligned with advancing their home economies towards high skill, innovation driven knowledge-based industries. It is time this problem is addressed.”

Tahseen Consulting’s Related Work

Arab Students Studying Abroad Contribute $77 Billion to Other Economies

The breadth and depth of Tahseen Consulting’s new offerings in university admissions and scholarships programs reflects Tahseen’s extensive experience advising Arab governments on aligning education and training systems with economic development strategies. The work of Tahseen Consulting’s partners, who are among the region’s most accomplished thinkers and doers, has been frequently sought after by regional policy makers in reforming national education and training policies.

Wes Schwalje, Chief Operating Officer of Tahseen Consulting said, “We know that students, parents, and policy makers are looking for practical guidance on what fields students should be focused on and how to develop national workforces to ensure economic development. This is why we have made a commitment to establishing this new practice. As a result, we will help scholarship providers and companies to develop scholarship program strategies and monitor their scholarship programs to increase alignment with labor market and future workforce requirements. We also hope to support students and their families throughout the university application process to ensure admissions to selective universities globally in key growth disciplines.”

Officially being launched publicly today, Tahseen’s new practice will host a series of learning events across the region that will feature insights from prominent thinkers in the fields of university admissions and scholarship program design.

For more information about Tahseen Consulting’s university admissions and scholarships consulting practice, please visit www.tahseen.ae/universityadmissions.html

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Qatar Today featured Tahseen Consulting’s research on the difficulties Qatar faces in terms of promoting technical and vocational education amongst females. We have included the original article below.

Women Wanted: Attracting Women to Technical Fields in Qatar

Over the past several decades Qatar has dramatically reformed its education and training system to align it with 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 reform. Though the need for a technically trained labor force was recognized by policy makers in Qatar as early as the 1940s when Qatar began exporting oil, dedicated TVET institutions began to emerge only in the late 1990s with establishment of several postsecondary institutions, two secondary institutions for boys, government-run training academies, and the emergence of a private training market.

Despite the proliferation of TVET institutions, many of the governance institutions that provide regulation and coordinate policy and institutional stakeholders are still in a nascent state. TVET policies in Qatar have largely proceeded without a clear conceptualization of what fields it encompasses and whether TVET leads to jobs which are considered acceptable to Qataris. Lack of a clear definition of what constitutes TVET and overcoming negative stereotypes related to TVET in Qatar are key challenges to policy formation. TVET faces an identity crisis in which people are unhappy with the name, the image, and reputation.

The Missing Half of the TVET Debate: Female Participation in TVET and Employment in Technical Fields

While prior research has established that Qatari females attend higher education at much higher rates than males and has explored reasons why men fail to continue on to higher education, very few studies have explored why Qatari females pursue academic education over TVET. There is also a lack of research concerning the labor market decisions of Qatari females and how highly technical, knowledge-intensive fields expected to emerge as a result of Qatar’s knowledge–based economic development will shape future education and employment decisions of females.

According to United Nations statistics, 73% of all students attending higher education programs in Qatar are women, second only to Bahrain in the Gulf Cooperation Council. However, only 38% of the students pursuing TVET education in Qatar are women despite emerging employment opportunities in technical fields. Qatar has one of the highest female labor market participation rates in the Arab World. Because a large number of women attend academic higher education and enter the labor market, many people view the lack of female enrollment and employment in technical fields as a low priority issue. However, high female employment concentrations in select public sector fields is inconsistent with the country’s economic ambitions to grow technology and innovation-driven industries as Qatar transitions to a knowledge economy. As Qatar prepares to host the World Cup in 2022 and continues to diversify its economy beyond the extractive industries, it must ensure that its education and training system is able to evolve to meet its economic ambitions, particularly with regards to inclusion of females in high skill, high wage technical fields which are expected to emerge as Qatar transitions to a knowledge-based economy.

Females Face Significant Challenges and Barriers to Entering Technical Work

A strong commitment was made to TVET reform and female employment in the Qatar National Vision 2030, National Development Strategy 2011 – 2016, and Education and Training Sector Strategy in order to realize Qatar’s economic development ambitions. However, several gender issues related to TVET participation and labor market outcomes for women in Qatar deserve attention:

Though improving, female enrollment in TVET is comparably low: Despite Qatar’s significant gains in reforming higher education, several institutional gaps still exist, such as a lack of secondary TVET schools for women. This lack of secondary technical schools for women stands at odds with data released by the Qatar Statistics Authority which show that Qatari women contribute significantly to emerging technical sectors of the Qatari economy such as ICT, utilities provision, oil and gas, and technical research. The large number of female students who pursue an academic higher education pathway in Qatar is heavily influenced by the absence of secondary TVET institutions for women, lack of early career guidance, and few experiential opportunities for girls to be exposed to technical fields at a young age. While notable increases towards gender parity in post-secondary TVET have been observed recently, there is still room for improvement and for rethinking how girls can be exposed to technical educational tracks earlier in their schooling.

There is also a strong economic rationale for women considering technical education and employment. Research from the Qatar General Secretariat for Development Planning shows that private rates of return for short, technically focused diploma studies exceed those for higher education. This means that, on average, women who pursue technical diplomas make more in terms of average lifetime salaries than women who pursue academic tracks at the higher education level.

Women receive less on the job training opportunities: Over the past decade, the number of training institutions which provide training privately and in the workplace in Qatar has grown dramatically. This is due to the emergence of a private training market as well as several government and mixed companies establishing internal training units. While lack of policies concerning licensing and quality control of Qatar’s private training institutions has been highlighted as a high priority issue, a potentially bigger issue of concern is that data from the Qatar Statistics Authority show women receive substantially less on the job training than men once they are employed. As more women enter the labor market in Qatar and work for longer periods before leaving the labor force, low levels of training for women could potentially serve as a bottleneck that limits the overall effectiveness of organizations in Qatar. Several studies show operations, productivity, revenue, potential for innovation, and product quality are impacted when employees fail to receive training to renew their skills to emerging organizational requirements.

Though they are trained in TVET fields, women often wind up employed in the public sector, education, and social work: Evolving socio-cultural values often affect the education and career decisions of women. For example, while there has been a notable rise in the enrollment of women in TVET institutions, 80% of the Qatari female labor force is employed in less technical sectors such as public administration and defense, education, and human health and social work. According to the most recent Qatar labor market survey, not a single Qatari woman is employed in an occupation in the international standard classification of occupations statistical groupings for craft and related trades workers and plant and machine operators and assemblers. The clustering of women in select occupations in government, education, and social work reflects a similar phenomenon as found in other Arab countries where individuals who have received specialized academic or TVET training ultimately wind up employed in positions not related to their original training.

In Qatar, cultural factors strongly influence women’s choice of employment. A focus group convened by the General Secretariat for Development Planning and Ministry of Labor revealed that females prefer employment in the government sector, rather than privately-owned companies, since it is “conducive to their cultural requirements.” In addition to socio-cultural values which shape career choice, the high comparative wages paid to females in the public sector and the sectors dominated by government owned and mixed companies over other technically focused sectors is a significant economic deterrent to female entry into more diverse disciplines. According to Qatar’s recent labor market survey, the average monthly salary for women employed in technical occupations (craft and related trades workers and plant and machine operators and assemblers) is from 2,369 QR to 2,750 QR. This amounts to 14% of what a woman would earn employed in a professional role in the public sector. Average monthly wages outside the public sector are comparatively unattractive relative to the high average monthly wage of 19,523 QR paid to women in the public sector. The extractive sector is the only sector in Qatar which offers a monthly wage that exceeds the average in the public sector.

Significant Education and Labor Market Reforms are Required

Strong TVET education systems have been shown to help nations prepare youth for future careers in technical industries associated with knowledge-based economies. High rates of participation by Qatari females in the labor market will be essential if Qatar is to reach its ambitious economic development goals. However, to ensure that females not only receive the training they need but also transition to technical fields, a number of barriers that serve as disincentives to TVET enrollment and women’s work in technical fields must be addressed.

A priority for Qatar should be to offer options for TVET education for females at the secondary level. The fact that females start their exposure to TVET later than males has many important repercussions – not only depriving females from exposure to TVET options but also subtly implying that TVET education is worse than academic education or is not appropriate for females. The effect is likely to discourage females from pursuing TVET education at the post-secondary level. Expanded institutional offerings should be accompanied by a rethinking of sponsorship and scholarship schemes which serve to perpetuate existing stereotypes about the roles that women should perform and the types of education they pursue.

To bolster the number of women in TVET education and jobs, Qatar must continue to emphasize technical vocational education and training for women while making technical careers more competitive in terms of pay and stature. Labor market policies must be pursued that reduce the pay and benefit differentials between the public sector and private sector employment in technical industries. An initial step in achieving this is identifying economic sectors with the potential to generate high skill, high wage employment opportunities for women. Given Qatar’s strong economic performance in the finance, aviation, and hospitality industries, these might be areas to expand TVET options.

A long-term public awareness campaign that highlights women who are successful in TVET fields and focuses on the value of TVET to Qatar’s development will also be essential. Young women need more female role models in technical fields and must be exposed to technical industries through structured programs and partnerships. Employers which require technically trained staff must also make a concerted effort to entice more women into technical sectors of the labor market by engaging universities and training institutes, providing directed career guidance, and offering scholarships. On-the-job training and mentorships can further enhance the role of women in technical careers in Qatar.

The Role of Women Beyond 2022

While some have suggested that the awarding of the World Cup 2022 to Qatar has brought clarity as to economic sectors that could provide employment opportunities over the next several years, Qatar must continue to retain its focus on 2030 and beyond. While the World Cup will create economic and job opportunities over the next decade, it remains unclear if these positions will be of interest to women and whether the employment opportunities created will be in line with Qatar’s focus on creating innovative, skilled industries associated with knowledge economies. As the recent Olympics held in London showed, many of the jobs created by large showcase events are concentrated in the construction and retail sectors which currently do not offer sufficient wages to attract Qataris. Qatar will have to think hard about whether gearing the education and training system to accommodate large scale events like the World Cup may ultimately stray from the vision articulated in the Qatar National Vision 2030 and National Development Strategy which emphasizes the development of innovation-driven, knowledge-based industries which can sustain Qatar’s rapid economic growth into the future.

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In many Arab countries, economic integration, the need for economic diversification, occupational preferences for public sector employment, and high youth unemployment rates have prompted the adoption of economic reforms to improve the enabling environment for entrepreneurship. However, understanding the determinants of self-employment and how they might differ across the region is critical if entrepreneurship is to be a solution for the region’s youth unemployment challenge and can ultimately lead to desired economic outcomes. Differing determinants of entrepreneurship across the region have significant implications for national policies and support programs that might be offered to regional entrepreneurs. The distinction between necessity and opportunity entrepreneurship is becoming increasingly relevant as countries in the region are largely pursuing undifferentiated entrepreneurship policies that are primarily aimed at opportunity entrepreneurs.

Necessity and Opportunity Entrepreneurship in the Arab World

Since 2001, the Global Entrepreneurship Monitor (GEM), which is an annual assessment of entrepreneurial activity in 100 countries, has distinguished between two types of entrepreneurs: opportunity entrepreneurs who pursue business opportunities voluntarily for personal interest, greater independence, or higher income often at the same time they hold a regular job and necessity entrepreneurs who are engaged in self-employment because they are unable to find better work and self-employment is the best alternative, but not necessarily preferred, employment option (Reynolds, Camp, Bygrave, Autio, & Hay, 2001; Xavier, Kelley, Kew, Herrington, & Vorderwülbecke, 2012)[1]. Analysis of GEM data indicates that innovation-driven countries with higher GDP per capita have higher rates of opportunity entrepreneurship while lower income countries have higher concentrations of necessity entrepreneurs. GEM data also suggests that a higher percentage of opportunity entrepreneurship occurs in high skill, knowledge-based business services with a greater concentration of necessity entrepreneurs in low and semi-skilled consumer-oriented economic sectors. Growth aspirations also vary substantially based on entrepreneurship types with the majority of necessity-driven entrepreneurs expecting their firms to remain under 5 employees (Reynolds et al., 2001; Xavier et al., 2012).

GEM data on 11 countries in the Arab region enables the classification of countries according to their ability to provide a sufficient enabling environment for opportunity-driven entrepreneurship. Arab countries can be classified into three maturity stages which relate economic development, labor market conditions, and industrial structure to the potential for opportunity-driven entrepreneurship. A brief description of each equilibrium phase is discussed below and applied to 11 Arab countries for which GEM data is available in Figure 1.

Low Opportunity Entrepreneurship Equilibrium: A low opportunity entrepreneurship equilibrium occurs when an economy adopts a lower value added production orientation when faced with a low supply of workforce skills. In economies facing low opportunity entrepreneurship equilibria, the industrial structure is typically made up of a large number of micro and informal enterprises which are highly susceptible to economic shocks. Small firms are more susceptible to economic fluctuations that can cause changes in unemployment rates or fail to provide sufficient employment opportunities which lead to comparatively high levels of necessity entrepreneurship. Egypt, Palestine, and Yemen, which have high concentrations of necessity entrepreneurs, exhibit low levels of ecosystem maturity in terms of presenting opportunities for opportunity-based entrepreneurship.

Intermediate Opportunity Entrepreneurship Equilibrium: With an average annual GDP growth rate of nearly 3% in 2012 according to World Bank statistics, over two times the GDP growth rate in the OECD, the Arab countries which fall in the intermediate opportunity entrepreneurship equilibrium stage are experiencing comparatively moderate levels of economic growth which has been shown by GEM data to lead to significant levels of necessity entrepreneurship (World Bank, 2013). However, the structure of such economies, which cannot be classified as specializing in knowledge-based industries or goods and commodity industries which require low levels of workforce skills, have led to comparatively lower levels of unemployment than in countries in a low opportunity entrepreneurship equilibrium. For this reason, such economies also offer significant opportunities for opportunity-based entrepreneurship. Countries at the intermediate opportunity entrepreneurship equilibrium stage have implemented economic policies to enhance entrepreneurship and enacted reforms towards improving the quality of education and integrating entrepreneurship within education and technical and vocational education and training systems. Countries at the intermediate opportunity entrepreneurship equilibrium stage include Algeria, Jordan, Morocco, Syria, and Tunisia.

High Opportunity Entrepreneurship Equilibrium: Countries in a high opportunity entrepreneurship equilibrium are generally comparatively wealthy countries on a GDP per capita basis with a substantial number of knowledge-based industries which provide high skill, high wage employment to a majority of the population. These countries may also have large rates of concessionary public sector employment which provided funding and availability for opportunity-based entrepreneurship. The industrial structure of such countries is characterized by a strong small and medium sized enterprise sector as well as large, sophisticated firms which may be state owned. Countries in a high opportunity entrepreneurship equilibrium have implemented economic policies specifically to support entrepreneurship and have achieved significant success in improving the quality of education and integrating entrepreneurship training into education and technical and vocation education and training. The level of economic development, labor market conditions, and industrial structure of such economies is conducive to high levels of opportunity-based entrepreneurship particularly in higher value added service industries. Countries at the high opportunity entrepreneurship equilibrium stage include Lebanon, UAE, and Saudi Arabia[2].

Based on the maturity model for opportunity-driven entrepreneurship proposed, the Arab countries exhibit a large degree of diversity in their ability to provide an ecosystem conducive to opportunity-based entrepreneurship. However, the diversity of entrepreneurial opportunities available in countries across the region has not led to targeted economic policy interventions regarding entrepreneurship at the national level. In several Arab countries, economic policy does not differ significantly based on the higher concentration of either necessity or opportunity entrepreneurs. Most Arab countries are pursuing identical entrepreneurship policies, which include career guidance, funding, business skills training, reducing bureaucracy, and establishing business incubators, without regard to the types of entrepreneurs in their countries and vastly different support needs required by necessity versus opportunity-based entrepreneurship.

Arab countries can be classified into three maturity stages which relate economic development, labor market conditions, and industrial structure to the potential for opportunity-driven entrepreneurship.

Figure 1. Opportunity-based entrepreneurship ecosystem maturity 

The Need to Distinguish Between Types of Entrepreneurs in the Arab World

An emerging body of international empirical literature suggests that necessity and opportunity entrepreneurs differ significantly in socio-economic characteristics; motivation and the types of opportunities pursued; and the potential for their entrepreneurial endeavors to create jobs and motivate private investment. Figure 2 summarizes the key differentiating characteristics between necessity and opportunity-driven entrepreneurs according to international empirical studies.

Category of Comparison Opportunity EntrepreneursNecessity Entrepreneurs
AgeOn average approximately 5 years younger according to empirical studies based on international dataUp to 5 years older than opportunity entrepreneurs in empirical studies based on international data
EducationTend to be more highly educated with education and general labor market experience having a positive impact on earnings and reducing exit ratesTend to be less educated and benefit more from specific vocationally oriented education found to be related positively to earnings
Industry ExperienceMore likely to have working experience from regular employment in the same industry they are enteringLess likely to have experience from regular employment in their focus industry
Motivation Voluntarily attracted into self-employment by the identification of opportunities; They often leave wage employment or pursue opportunities alongside full time employmentOften driven into self-employment after involuntary job loss or scarcity of employment opportunities
CyclicalityMore likely to create ventures when economic conditions are good and unemployment is low; They also choose to create businesses regardless of their employment statusNegative economic shocks that are more likely to affect small firms or increase unemployment push individuals to create businesses
Quality of Opportunities PursuedCreate larger businesses in knowledge-based industries which require significant amounts of invested capital and employees generate higher earningsLess likely to have business ideas with significant growth prospects and more likely to exploit entrepreneurial opportunities in low-income, low knowledge-content sectors
Potential for Job CreationHigher probability of creating additional jobs Primarily focused on employing themselves and have lower probability of creating additional jobs
Firm Survival Higher survival and lower failure and closure ratesFace a higher risk of failure, or, if they survive, they may produce only marginal businesses, invest insignificant amounts of capital, fail to create further jobs, and earn minimal incomes
Capital Investment and Risk ToleranceInvest higher amounts of capital into their venture and are more risk tolerantLower amounts of invested capital and lower tolerance for risk
Tendency to Seek External SupportMore likely to have built their network to include people valuable in the process of venture creation such as potential customers, cofounders or financiersLess likely to seek support in the form of professional or personal assistance during venture creation

These empirical findings present strong evidence that national training and support programs for entrepreneurship require significant tailoring to meet the needs of both necessity and opportunity-driven entrepreneurs. By not accounting for particular needs of different types of entrepreneurs, regional entrepreneurship policy is designed around a one size fits all approach which is particularly lacking in regards to serving necessity-driven entrepreneurs. Based on the proposition that entrepreneurship policies in a given country should reflect the mix of necessity versus opportunity-driven entrepreneurs operating in the country, Arab countries, based on the equilibrium stage they fall into, should have significantly different, contextually dependent economic policies surrounding entrepreneurship. However, in many Arab countries entrepreneurship policies are not necessarily aligned with macroeconomic and other critical policies for economic development. Several studies (See for example Aradi, Buckner, & Schwalje, 2013) of the Arab region have shown a large disconnect between entrepreneurship policies and programs and critical sector development strategies. For example, Aradi, Buckner, & Schwalje show that Qatar’s entrepreneurship and educational policies are not necessarily aligned and are not viewed as complimentary. This results in a lack of career guidance for aspiring entrepreneurs and entrepreneurship training being rarely offered in K-12 schools due to lack of an approved curriculum. Rather than complementing existing curricula, aspiring entrepreneurs in Qatar are exposed to entrepreneurship much later in their schooling or have to seek out such training at specialized institutions outside the formal education system.

Implications for Policy and Practice

Due to the scarcity of empirical work on necessity and opportunity entrepreneurship in the Arab region, it is difficult to formulate specific prescriptions at the national level. However, this exploratory analysis shows that strong differences exist between necessity and opportunity entrepreneurs which have not been accounted for in regional entrepreneurship policies. Entrepreneurship policy across the region fails to differentiate between necessity and opportunity entrepreneurs favoring a one size fits all approach that is largely shaped by programs that serve opportunity-driven entrepreneurs. In doing so, tailored offerings based on the characteristics of different types of entrepreneurs are rarely considered.

International empirical findings, assuming applicability to the Arab region, suggest a strong case for more tailored national entrepreneurship policies in the Arab region which reflect the mix of necessity versus opportunity-driven entrepreneurs operating in particular countries. Entrepreneurship in countries at a high opportunity entrepreneurship equilibrium, which likely includes all of the Gulf countries, is presumably much different than entrepreneurship in countries like Egypt, Palestine, and Yemen in a low opportunity entrepreneurship equilibrium. Necessity and opportunity entrepreneurs differ in socio-economic characteristics; motivation and the types of opportunities pursued; and the potential for their entrepreneurial endeavors to create jobs and motivate private investment. These differences are potentially unexploited policy levers which might serve as guidance for targeted national policies. Instead of classifying all entrepreneurs as a homogenous group driven by opportunity and offering undifferentiated support, regional governments can introduce targeted training programs and support, contingent financing, and subsidies which might better serve both necessity and opportunity entrepreneurs. If entrepreneurship is to continue to be championed as a panacea for the region’s youth unemployment challenge and resolving structural economic and labor market issues, then such tailored policy measures appear long overdue. Figure 3 presents a summary of potential components of regional entrepreneurship policy which may need to be reconsidered to more effectively meet the needs of both opportunity and necessity entrepreneurs.

Components of Entrepreneurship PolicyTypical Opportunity Entrepreneur Approach in the Arab RegionWhat Might be Needed to More Effectively Reach Necessity Entrepreneurs in the Arab Region
Entrepreneurship Policy Approach Policies view entrepreneurs as a segment of the national economy who can take advantage of all programs and may not distinguish between small business support and policies which support entrepreneurial venturesDefined policies and programs to meet the specific needs of necessity entrepreneurs and other country specific challenges
Entrepreneurship EducationEarly and post-secondary entrepreneurship education and business skills training at university and non-university based business incubatorsSupport for training in specific technical and vocational areas potentially below the post-secondary level in addition to early and post-secondary entrepreneurship education and business skills training
Access to Finance Increasing the supply of capital through direct loans and venture funds Public financing programs that may target a broader range of industries along with a stronger focus on helping entrepreneurs access capital by focusing more on business issues such as management skills and evidence of a solid business plan
Optimizing the Regulatory EnvironmentMacroeconomic approach to tax and regulatory policy focused on changes in laws (e.g., general tax reductions) and regulations that affect everyone doing business Policy impact analysis to determine if regulatory changes are sufficiently focused on the needs of necessity entrepreneurs; Policies that most benefit these businesses are those that defer expenses,
allow companies to convert tax incentives into cash, and lower development costs
Technology
Exchange and Innovation
Cluster development and leveraging public funds,
that encourage university-private sector collaboration
Benchmarking and evaluating the benefits associated with state investments on necessity entrepreneurs and whether they are adequately served by such initiatives

From this analysis, it is clear that a large number of Arab states should be reassessing their strategies, policies, and programs to maximize expenditures on fostering entrepreneurial activity. This article is designed to raise issues to spur a more informed debate around the impact of entrepreneurial policies in the region and promote national policies that accommodate, when necessary, both opportunity and necessity entrepreneurship.  


[1] Caliendo & Kritikos identify a third classification of push-and-pull entrepreneurs who are driven by a mixture of push (unemployment or difficulty locating a suitable job) and pull factors (personal interest, greater independence, or higher income). Though they express mixed motivations for pursuing entrepreneurship, push-and-pull entrepreneurs are more similar to opportunity entrepreneurs.

[2]Upper-middle income countries like Lebanon may not be able to emulate many of the policies and practices of the richer Gulf Cooperation Council countries which generally offer highly paid public sector work and social benefits that affords many individuals the time and resources to pursue opportunity-based entrepreneurial endeavors alongside full time work. This suggests that even at particular equilibrium stages, countries will likely need to follow country context dependent policies aligned with national resources available to support entrepreneurship relative to other socio-economic government aims.

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As Arab countries pursue knowledge-based economic development, national skills formation policies require significant rethinking says a new report from Tahseen Consulting in collaboration with the Sheikh Saud bin Saqr Al Qasimi Foundation for Policy Research.

Wes Schwalje, chief operating officer at Tahseen Consulting, says swift action must be taken to create sustainable jobs and develop the region into a truly global knowledge economy.

Wes Schwalje, chief operating officer at Tahseen Consulting, says swift action must be taken to create sustainable jobs and develop the region into a truly global knowledge economy.

You can read the article here: http://gulfbusiness.com/2013/09/why-the-gcc-needs-news-skills-formation-systems-now/#.UiRyOT-7Liq

Why The GCC Needs New Skills Formation Systems – Now

As Arab countries pursue knowledge-based economic development, national skills formation policies require significant rethinking says a new report from Tahseen Consulting

In our recent study A Conceptual Model of National Skills Formation for Knowledge-based Economic Development in the Arab World we raise a red flag over whether regional economic development plans have sufficiently accommodated global trends that have eroded the high wage, high skill opportunity bargain throughout Europe and the United States as these regions have pursued knowledge-based development. Nearly all of the countries in the Arab World have adopted development of a knowledge-based economy as a policy objective to meet economic, political, and social objectives. In the region, policies aimed at catalyzing knowledge-based economies are highly related to job creation, economic integration, economic diversification, environmental sustainability, and social development. While the advantages of knowledge-based economic development have become clearer, so too have the challenges of implementing related policies.

The potential risk of Arab economies failing to effectively contest knowledge-based industries by not factoring in the globalization of knowledge is reminiscent of the story of Muhammad Ali’s attempt to industrialize Egypt through the establishment of a textile industry in the 1800s. In 1819, Muhammad Ali began an industrialization drive using imported foreign technicians which led to the establishment of 30 modern factories for textile manufacturing. By 1830, these factories employed 30,000 but within a decade all the factories had failed due to lack of technical skills, European competition, and increased production quality in Europe.

In today’s global economy, 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 Arab citizens and 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, the Arab region’s plans to enter knowledge-based industries are susceptible to the globalization of low cost, high skill competition from beyond the region’s borders.

Nations which have pursued economic development strategies to capitalize on offshoring have generally employed either a strategy based on the export of low-cost and high-end knowledge-based services or alternatively low-cost export-oriented manufacturing strategies. Because knowledge and business process and manufacturing outsourcing is a cost minimization strategy pursued by companies, wages in outsourced sectors face persistent compression forces from many countries which are in line to offer the lowest wages possible to secure employment for their citizens and spur economic growth. The Gulf countries, which employ many of their citizens in high wage roles in parastatals operating in knowledge-based industries, may be particularly threatened by competition from low wage knowledge workers and be subject to significant margin compression which challenges the economics of their entry into knowledge-based industries.  A recent ranking of the attractiveness of the top 50 global service offshoring locations shows that competition is not only coming from the BRICS but from many countries in Southeast Asia, the Baltic States, Eastern Europe, and Central and South America. However, only five Arab countries, Egypt, Jordan, Morocco, Tunisia, and the UAE, appear on the ranking.

With increasing cost competition in knowledge-based industries from emerging countries, the less resource wealthy Arab countries could feasibly follow a development trajectory grounded in selective participation in knowledge-based and manufacturing industries in which they have a cost advantage and have or can develop quickly sufficient workforce skills to compete against emerging country rivals.  However, the high wage structure of Gulf labor markets is at odds with the emergence of high skill, low cost knowledge workers in other countries and attempts by global companies to minimize costs through outsourcing. While leapfrogging into some of the more innovation-driven, high skills knowledge-based industries might be a long-term vision for Arab countries, such a development trajectory ignores the immediate need now to create jobs and provide economic opportunity for youth. Across the region there is also the risk of competitive latency in which global industry possibility frontiers are driven by an increasing array of countries which may create additional competitive gaps compared to leading edge countries and companies that go unrecognized or cannot be reached due to market failures in skills formation by the Arab countries. Our research provides evidence of a lack of effectiveness of Arab skills formation systems that influences Arab firms to contest lower-skilled, non-knowledge intensive industries at the detriment to regional competitiveness and knowledge-based economic development.

The Arab opportunity bargain relies on a modernized interpretation of creative destruction which posits that emerging markets can also be sources of knowledge-based innovation. The low levels of regional R&D and innovation led to substantial expenditures in the Nineties on critical components necessary for innovation systems, research, market-oriented R&D, and entrepreneurship such as educational systems; institutions conducting basic, applied, and interdisciplinary research; business incubators; funding institutions; and professional societies. An important question for the Arab World to answer in making such investments is how much of a risk creative destruction poses for high skill, high wage job creation since continually innovating economies present both employment opportunities for workers in new industries who have the right skills as well as failed dreams for those who do not have the right skills, experience, or education. Contrary to what the region’s economic development strategies suggest, the future of the Arab Dream is very much reliant not only on what happens nationally and regionally but what happens globally in terms of increased economic integration, availability of cheap highly skilled labor, rival competition for knowledge-based industries, demand for commodity exports, and the economic health of other countries.

National Skills Formation for Knowledge-based Economic Development

Beginning in the 1990s, there was a shift in the Arab World away from viewing education and training systems as solely suppliers of skills toward an emphasis on the relationship between governments, educational systems, labor markets, and firms to generate demand for skills. By adopting demand-driven, ecosystem approaches to skills formation, Arab governments can align education and training systems with high-growth sectors of industry for knowledge-based economic development and achievement of accompanying economic, political, and social objectives.

While many international models of skills formation promote an exclusively market based approach, several Arab countries view investment in human capital as a political and economic goal in which significant government intervention is warranted. Yet, many previous attempts at skills formation policy have failed to address persistent skills development problems and do not present a comprehensive strategy to develop the skills of the national workforce as a whole. Despite the need for countries to adopt demand-driven approaches to skills formation, many of the countries in the region have pursued policies with no clear link between key stakeholders and specific economic outcomes.

The changing demands of knowledge-based economic development create a need for interdependence and collaborative networks for effective skills formation. The widespread regional pursuit of knowledge-based economic development is driven by policies that envision the emergence of high skill, high wage economies that will create jobs. However, the global availability and growth of low cost, high skill workers potentially threatens the viability and economic fundamentals of sophisticated, innovation-driven knowledge-based industries taking root in the region if skills formation challenges are not addressed.

The Need for a New Approach

The changing demands of knowledge-based economic development, global macroeconomic trends, and social development, create a need for interdependence and collaborative networks consisting of education and training providers, firms, government entities, and other key stakeholders for effective skills formation. Citing good practices of skills formation policy from across the Gulf Cooperation Council countries, our research presents a framework via which countries can analyze their skills development systems.

Arab skills formation system reforms must challenge the assumption that more education is always better. Particularly in non-resource rich Arab countries, governments must reconsider the full employment promise which hampers global competitiveness, reduce wage inequality to ensure equal distribution of wealth, and determine the Arab world’s position in a global economy with emerging low cost, high-skill competitors that challenge knowledge based economic development both in the developed and developing world.

While some Arab countries are more suited to competing in a high-skill, low-wage global economy, other Arab countries which are unable to compete in high-skill, high-wage knowledge-based industries will need to adequately calibrate the expectations of their citizens regarding the types of jobs that will be available in the future. They will also have to account for the likely instability of salaries due to wage compression from competing low-wage, high-skill workers. Efforts in the region to privatize education attainment so that labor market success or failure passes the burden on to individuals are prone to market failure without sufficient demand for skills from the labor market. If knowledge-based industries fail to take root and lead to employment, many of the reforms and money spent on higher education expansion, education quality, R&D ecosystems, and entrepreneurial growth could be deemed inappropriately spent.

A copy of our recent study A Conceptual Model of National Skills Formation for Knowledge-based Economic Development in the Arab World can be downloaded at http://www.alqasimifoundation.com/en/Publications.

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