Posts Tagged ‘lifelong learning’

Tahseen Consulting is honored to have its work on skills gaps in the Arab World cited by the Gulf News. We have posted a snippet from the article below. While we agree that more occupation-specific assessments and certifications are needed, there are likely larger employer-level interventions required before such initiatives can really have an impact. We view increasing the resources regional firms devote to workforce investment and development as systemic problems that must be addressed first.

Workforce Investment

While firms tend to focus on paying higher wages for highly demanded skills, macroeconomic trends and rampant market failures of education and training systems suggest longer term approaches to skills formation through continuous, regular on the job training and knowledge transfer are needed (Hall & Lansbury, 2006). Market failures in human capital formation are rampant as education and training institutions struggle to keep pace with economic growth (Lall, 1999). The workforce investment mandate of employers in the 21st century has expanded to include not only training in response to high-performance workplace organization and maintaining skills relevancy in light of competitiveness, but it now also includes the burden of remediating inadequate pre-employment general skills formation due to formal education and training system market and institutional failures. Despite widespread skills shortages and gaps observed in the Arab World, training rates are generally lower as compared to developed knowledge economies with more effective skills formation systems as well as other developing economies such as Brazil, China, and Russia (World Bank, 2010).

Lall (1999) suggests that basic skills, personal attitudes, and competencies developed through formal education and training must be complemented with specific technology-based experience to develop technical skills. Industrial sophistication and competitiveness are derived not from formal education and training but the “practical experience of mastering, adapting, and improving specific technologies” (Lall, 2000, p. 22). Industrialization and skill accumulation are achieved by expansion of the education system alongside the upgrading of the skill intensity of economic activities. For developing countries, this approach reduces the technology gap with advanced countries while raising the demand for higher levels of human capital and concurrently providing the education and training required for economic development (Mayer, 2000). To avoid insufficient individual incentives to engage in skill upgrading, improved performance and productivity gains from skills acquisition are linked with pay when firms exercise wage flexibility (Ashton & Sung, 2002).

The willingness and ability of firms to provide enterprise-based training is rooted in a number of factors. The educational attainment of the workforce and firm managers can serve to reduce investments in firm-level training. Low levels of education amongst a firm’s workforce can raise doubts surrounding the absorption capacity of training while managers with lower levels of education may not perceive a value in providing training. Managerial calculations of the returns to training may be further complicated by informational gaps surrounding technology, future skill requirements, and benefits of training (Lall, 1999). Firms which operate in less competitive, low skill production economies in which short-term strategic planning, little technological upgrading, low rates of capital spending, and an unfavorable economic policy environment for growth are rampant may prevent structured firm-based training.

Lack of internal capacity to provide training can obligate firms to rely upon external private training provision. In cases where the external training sector is underdeveloped and firm sizes are generally small, the inability to achieve scale to minimize training costs and budgetary constraints can serve to reduce the prevalence of firm-based training (Lall, 2000; Ziderman, 2003). This situation is particularly applicable in the Arab World where firm sizes are comparatively small relative to other regions (Schwalje, 2013c). Employee poaching, the tendency of firms to recruit employees with transferrable skills from other firms, may serve to limit firm-based training since training firms incur the cost of employee training only to lose the employee and resulting benefits of the training to another firm. In an environment with high levels of poaching, training firms will reduce training or only offer highly, specific training that is not transferrable to other firms (Acemoglu & Pischke, 1998).

Due to the variety of causes of inadequate enterprise training, policy solutions must be tailored to the root cause. In cases of market failure which deter workforce investment, joint approaches that share the responsibility of skills development between government and business have been effective. Training subsidies allow companies to develop training capacity, but more sustainable, longer-term approaches such as government provided training advisory and technical assistance funded through national training funds and levy-grant schemes are preferred. A notable initiative of this type is the Waqf Fund in Bahrain which trains employees for the Islamic banking sector based on contributions from private financial institutions which are invested in money market instruments and the returns invested in training initiatives. The Human Resources development Fund in Saudi Arabia also works in a similar way. Where the private training sector is weak, the government may fulfill a transitional role to build the capacity of private training providers complemented with public sector provided training. Payroll levy-grant schemes which do not require government financing are effective in limiting poaching. Under such schemes, firms which provide training receive subsidies to fund training initiatives while firms that do not train do not have access to funds since they are more likely to poach employees (Ziderman, 2003).

Tahseen Consulting is honored to have its work on skills gaps in the Arab World cited by the Gulf News.

Workforce Development

Jacobs (2002) identifies workforce development as the cooperation of education and training institutions, the business community, and governments to provide individuals with rewarding employment as well as firms obtaining skills in the quantity and quality they require. High youth unemployment rates and market failures of education and training systems to create general skills suggest an expanded role for the Arab business community towards ensuring alignment between the skills imparted in formal education and training systems and those demanded in the workplace. Apprenticeships or work experience, often compensated at below the market wage rate, in which work experience is integrated into the formal educational structure and classroom learning can ease the school-to-work transition and ensure employability of young graduates (Quintini et al., 2007).

Including employers in curricula design, identifying the skill sets needed by graduates, standards setting, and accreditation can ensure education and training systems evolve alongside changing labor market needs. Through membership in industrial trade associations, businesses can also serve a governance role in the skills formation system (Ackroyd, Batt, Thompson, & Tolbert, 2005). However, in developing countries the oversight role typically played by scholarly, scientific, and professional organizations may be limited due to lack of capacity. Workforce development ensures that the relevance and employability mandate of education and training systems is fulfilled by minimizing informational asymmetries which reduce individual investment in skills acquisition. Early employer involvement in articulating future skills needs also serves to reduce the need for workforce training investment to backfill general skill deficiencies resulting from poor quality education and training systems.

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

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

August 20, 2013 – Dubai, UAE – 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. 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. A Conceptual Model of National Skills Formation for Knowledge-based Economic Development in the Arab World, a new report by Tahseen Consulting, developed in collaboration with the Sheikh Saud bin Saqr Al Qasimi Foundation for Policy Research, provides a framework and best practices from the Gulf Cooperation Council for helping governments align skills formation policies with knowledge-based economic development.

A copy of the report can be downloaded at http://www.alqasimifoundation.com/en/Publications

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, said Wes Schwalje, Chief Operating Officer of Tahseen Consulting and author of the report. “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, the report 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,” said Walid Aradi, Chief Executive Officer of Tahseen Consulting. “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.

The Centre for Learning and Life Chances in Knowledge Economies and Societies at the Institute of Education, University of London cited Tahseen Consulting’s research on the governance of skills formation in knowledge-based economies as a potential model for more effective national education and skills formation strategies in OECD countries.

Tahseen Consulting’s Related Work

Read about Tahseen Consulting’s work on creating national skills formation for knowledge-based development

UNESCO’s 2012 Education for All Global Monitoring Report on Youth and Skills: Putting Education to Work cites Tahseen Consulting’s work on national skills formation and skills gaps in Latin America.