Posts Tagged ‘Youth employment’

In this Insights at the Edge of Government Analysis Flash, we look at the impact of the sharing economy on the short-term rental market in the MENA. Based on the number of Airbnb hosts across the region, Turkey, Morocco, and the UAE are the biggest regional markets for online platforms that link property owners with short-term lessees. However, the total number of Airbnb hosts in the entire MENA region is similar in size to the number of Airbnb hosts in London alone. The MENA is a key potential expansion market where sensible sharing economy regulation and partnerships between cities and technology companies can mean significant benefits for local communities and businesses that promote large scale national economic opportunity generation.

Airbnb has ≈ 40,000 hosts in the broader MENA

In this Insights at the Edge of Government Analysis Flash, we look at the unprecedented level of economic opportunities for MENA youth created by ridesharing companies. In Egypt, Pakistan, and Saudi Arabia alone, ridesharing firms have catalyzed 200,000+ economic opportunities. These opportunities, which have been created over the last 4 years, now exceed the workforce of the largest regional public sector employers as well as the expected job creation impact of many of the region’s in progress mega projects.

In previous blog posts, we have written about how sensible regulation of the sharing economy has the potential to contribute significantly to the MENA’s socio-economic development. Some countries, like Saudi Arabia, are getting sharing economy regulation right, while other MENA countries remain focused on more traditional policies to attract inward foreign direct investment flows for mega projects to create high skill, high wage jobs in knowledge-based industries and protect industry incumbents. Based on this analysis, technology-driven business models in the sharing economy have the potential to be a key tool for MENA governments to complement active labor market policies and large scale national economic opportunity generation strategies.

MENA ridesharing firms provide 300,000+ youth economic opportunities

ميريام نجم: كيف تطور دور المرأة الخليجية في مجال ريادة الأعمال في خلال السنوات العشر الماضية؟

وليد العرادي: ساهم التطور الكبير الذي شهدته المرأة منذ عام 2000 على الصعيد التعليمي والاجتماعي في زيادة مشاركة المرأة في الاقتصاد الخليجي مما نمى مهاراتها وزاد من قدرتها على الاستفادة من الفرص المتاحة في السوق المحلي حيث انضم ما يزيد على 1.5 مليون مرأة إلى سوق العمل بين عامي 2001 و 2010. وبينما اقتصرت مشاركة المرأة في الماضي على الوظائف الحكومية وريادة الأعمال المرتبطة بالمشاريع الصغيرة المنبثقة من المنزل، استطاعت المرأة تطويع المهارات المكتسبة من مشاركتها في سوق العمل وتسخير التقنيات المتوفرة مثل الشبكة المعلوماتية لتوسيع نطاق مشاركتها في ريادة الأعمال لتشمل المجالات المرتبطة باقتصاد المعرفة كالتعليم والصحة على سبيل المثال.

وتشير الإحصاءات إلى أن مشاركة المرأة في ريادة الأعمال يزيد من التنويع الاقتصادي ويساهم بشكل إيجابي على الأداء الاقتصادي للدول حيث أن المرأة هي أكثر ميلا لإعادة استثمار دخلها في المشاريع التي تفيد المجتمع بشكل عام والأطفال بشكل خاص. وأدركت الحكومات ومؤسسات المجتمع المدني النفع العام المنبثق عن زيادة نسبة النساء في ريادة الأعمال حيث ظهرت في الآونة الأخيرة عدة مبادرات وبرامج لتمكين رائدات الأعمال وتفعيل دورهن في القطاع الخاص والمساهمة في استدامة أعمالهن كبرنامج صوغة التابع لصندوق خليفة لتطوير المشاريع في الإمارات ومركز روضة لريادة الأعمال والابتكار في قطر وبرنامج سند في عمان بالإضافة إلى مجالس سيدات الأعمال في عدة مدن خليجية. وسعت هذه المبادرات لتقديم الاستشارات وخدمات الاحتضان في حاضنات الأعمال وتنظيم المؤتمرات والندوات لنشر الوعي حول ريادة الأعمال مما سيساهم في رفع عدد رائدات الأعمال في المستقبل.

ميريام نجم: هل من عوائق اقتصادية تقف في وجه تطوّر دور سيدات الأعمال الخليجيات؟

وليد العرادي: على الرغم من التطور الذي شهدته المرأة في الخليج في مجال ريادة الأعمال إلا أنها ما زالت تواجه عدة تحديات مثلها مثل الرجل. ولكن توجد هناك عقبات اقتصادية واجتماعية خاصة بالمرأة. فعلى سبيل المثال يصعب على المرأة الحصول على تمويل مصرفي في قطر بدون الحصول على ضمانات مالية من أحد أقاربها. وتشير دراسة أعدت مؤخرا في السعودية أن 82% من النساء يعتمدن على مدخراتهن الشخصية لتمويل الأعمال نظرا لصعوبة استقطاب رأس المال عبر شركات الاستثمار في الملكية الخاصة أو البنوك الاستثمارية. كما تشير الدراسة إلى الصعوبات التي تواجهها المرأة في تعاملاتها التجارية بدون الاعتماد على الأقارب من الذكور لأسباب اجتماعية. وفي الإمارات العربية المتحدة أظهرت الاستطلاعات أن غالبية رائدات الأعمال اللواتي قمن بإغلاق شركاتهن قمن بذلك لأسباب عائلية. ويشير ذلك إلى وجود بعض الضغوطات الاجتماعية على المرأة ما يمنعها في بعض الأحيان من الانخراط في مجال ريادة الأعمال.

ميريام نجم: ما هي نسبة السيدات في مجال ملكية المشروعات الصغيرة والمتوسطة في الإمارات وقطر؟

وليد العرادي: تمتلك النساء 13% من إجمالي الشركات الخاصة في العالم العربي. وتعد هذه النسبة منخفضة مقارنة بالمعدلات المسجلة في أنحاء أخرى من العالم مثل أوروبا وآسيا الوسطى والتي تصل نسبة امتلاك النساء للشركات الخاصة فيها إلى ضعف المعدلات المسجلة في العالم العربي. وقد لا تمثل هذه المعدلات النسب الحقيقية لانخراط المرأة بريادة الأعمال نظرا لاختلاف سبل جمع المعلومات من دولة لأخرى وصعوبة التقاط المعلومات المتعلقة بالمشروعات التي تبدأ من المنزل.

أما بالنسبة لدول مجلس التعاون وبالأخص دولتي قطر والإمارات العربية المتحدة، تشير إحصاءات غرفة تجارة قطر إلى أن 17% من رواد الأعمال في قطر هم من النساء بينما لا تتجاوز نسبة ريادة الأعمال بين النساء 8% في الإمارات حسب إحصاءات المرصد العالمي لريادة الأعمال. والجدير بالذكر أن نسبة ريادة الأعمال بين النساء تنخفض في الإمارات من 8% للمشاريع في مراحلها المبكرة إلى 0.9% للمشاريع القائمة بينما تنخفض هذه النسبة بين الرجال بنسبة أقل (من 12% إلى 7%) ما يشير إلى تدني فرص النجاح بين النساء في ريادة الأعمال. ولا يدل ذلك على تدني قدرة المرأة في إنشاء وإدارة الشركات وإنما يدل على كبر حجم التحديات التي تواجهها وقلة البرامج التي تعنى بمساعدتها على مواجهة تلك التحديات.

ميريام نجم: ما هي المجالات التي تلمع فيها رائدات الأعمال بشكل ملفت وهل ترى طفرة من الشركات الصغيرة في تلك المجالات؟

وليد العرادي: اقتصرت مشاركة رائدات الأعمال في الماضي على المشاريع الصغيرة المنبثقة من المنزل. وركزت تلك المشاريع على الحرفيات والصناعات التقليدية والطبخ. ولكننا لاحظنا في السنوات العشر الأخيرة زيادة ملموسة في المشاريع التي تطلقها النساء في قطاعات التعليم والصحة والثقافة والتجزئة والقطاع الخدمي بشتى مجالاته والريادة الاجتماعية. وتشير دراسة أعدتها مؤخرا منظمة التعاون والتنمية الاقتصادية على أن أنشطة الشركات التي ترأسها رائدات الأعمال تركز بالدرجة الأولى على خدمة الأشخاص بدلا من الكيانات التجارية.

ولا تزال رائدة الأعمال غائبة نوعا ما عن بعض المجالات كالعلوم والتكنولوجيا والهندسة والرياضيات التي تعرف ب STEM وهي ظاهرة ليست بغريبة حيث أن المرأة تمثل نسبة ضئيلة من الطلاب الجامعيين في هذه المجالات وكثير من النساء لا يسعين بالضرورة إلى العمل في المجالات ذات الصلة بعد التخرج.

The World Government Summit hosted annually in Dubai is emerging as a key forum to define the agenda for the next generation of governments. Tahseen Consulting is honored to have contributed its thoughts on how Arab governments can innovate to solve some of the most significant challenges facing the region.

In the following interview, Tahseen Consulting’s Chief operating Officer, Wes Schwalje, spoke with representatives from the World Government Summit regarding his thoughts on building entrepreneurial ecosystems in the UAE and Arab World.

World Government Summit: Why is entrepreneurship important for the UAE?

Schwalje: The UAE Vision 2021 establishes entrepreneurship as a vital enabler of the UAE’s transition to a knowledge-based, highly productive, and competitive economy. For this reason, entrepreneurship ecosystem development at the national and Emirate levels has been prioritized as a key economic development policy priority. The UAE views a vibrant entrepreneurship ecosystem as essential in order for startups and small and medium-sized enterprises (SMEs) to grow, thrive, and commercialize innovative ideas. To assist SMEs, UAE policymakers have primarily focused on cultivating a healthy risk-taking culture, easing access to finance, implementing better regulation, and enabling SMEs to reach international markets. As in other countries, the UAE is targeting small firms due to their potential to create jobs and grow into profitable companies that can serve as engines for employment and economic development. The UAE Ministry of Economy recently estimated that SMEs contribute more than 60% of the UAE’s GDP and provide 86% of all private sector employment. The immediate goal of the UAE’s entrepreneurship development policies is to establish assistance programs that support fledgling ventures in the early, vulnerable stages of their development so that they are able to grow and become engines that sustain growth for long-term development. Over the longer term, nurturing and supporting entrepreneurs is important to the UAE for creating jobs, encouraging nationals to join the private sector, economic diversification, boosting innovation, increasing productivity, and commercializing research.

World Government Summit: How can the government help to create a new generation of entrepreneurs?

Schwalje: Many entrepreneurs in the UAE still struggle with starting and growing their businesses because significant resources have been devoted to limited, singular interventions at either the national or Emirate levels rather than devoted to system wide change. Though it has expanded rapidly, the UAE entrepreneurial ecosystem, which includes upwards of 330 different public and private stakeholders, currently lacks critical institutions and cooperative platforms which could make it more effective. Some Emirates have been much more effective at developing vibrant entrepreneurship ecosystems than others. While there is no one-size-fits-all model for building a competitive entrepreneurship ecosystem, more work must be done to catalyze an inclusive dialogue where policymakers, entrepreneurs, and other stakeholders come together to discuss barriers and find solutions at the national and Emirate levels.

Institutions tasked with implementing entrepreneurship development policies must work in closer coordination to build a conducive culture for entrepreneurial risk taking, enhance access to new venture finance, ensure venture-friendly markets for products, and improve institutional and infrastructural support for entrepreneurs. While some progress has been made, entrepreneurship policies must also be more closely aligned with national technical and vocational education and training policies. This will require integrating entrepreneurship more effectively into the education system from an early age. There is also an urgent 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 technical program, or continuing their studies at the higher education level. Based on the scarcity of initiatives which specifically target aspiring female entrepreneurs, 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.

World Government Summit: Which other stakeholders can get involved too?

Schwalje: Policy frameworks and institutions play a particularly important role in entrepreneurship ecosystem development. Some Emirates have made significant progress in developing institutionally rich entrepreneurship ecosystems while other Emirates offer much less support for entrepreneurs. A key risk in designing national and Emirate level entrepreneurship development policies is proceeding without systematic input from entrepreneurs and other stakeholders. While identifying the particular needs of entrepreneurs in each Emirate is essential, international experience offers prescriptive guidance for developing entrepreneurial ecosystems and the key institutions and stakeholders that should be involved.

Policy makers must ensure the regulatory framework supports entrepreneurs. Public and private sector stakeholders must work to ensure the presence of early customers and, once fledgling business begin to grow, they can reach regional and global markets. Access to a full spectrum of financial services is critical to entrepreneurial success. This include the presence of financial institutions which provide SME finance, venture capital funds, corporate venture capital funds, government grants and loan programs, and angels and angel groups. A vast array of support organizations ranging from incubators and accelerators to competitions to export assistance centers is required for a competitive entrepreneurial ecosystem. These institutions must work together to help entrepreneurs turn an idea into a business, launch, and then grow by providing training, mentorship, networking, expert guidance, and inspiration. The private sector is important due to philanthropic giving and corporate social responsibility programs support entrepreneurship, identifying opportunities in their supply chains that can present opportunities for entrepreneurs, commercializing academic research, and in opening up exit opportunities for entrepreneurs. The institutions that govern the education and training system must work to ensure emerging skills needs are met and provide quality, entrepreneurial training. Finally, the media is important to ensure entrepreneurial successes are highlighted to inspire the next generation of entrepreneurs.

World Government Summit: Is there a need for different approaches in other Arab countries?

Schwalje: 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.

World Government Summit: How are the needs of entrepreneurs different across the Arab region?

Schwalje: 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.

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
MotivationVoluntarily 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 Job creation, Investment, and Survival
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 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, some national entrepreneurship policies in the region are designed around a one size fits all approach which is particularly lacking in regards to serving necessity-driven entrepreneurs.

International evidence suggests 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 includes all of the Gulf countries, is presumably much different 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 more targeted national entrepreneurship policies. Instead of classifying all entrepreneurs as a homogeneous 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. The table below 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 ApproachPolicies 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 FinanceIncreasing the supply of capital through direct loans and venture fundsPublic 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 InnovationCluster development and leveraging public funds that encourage university-private sector collaborationBenchmarking and evaluating the benefits associated with state investments on necessity entrepreneurs and whether they are adequately served by such initiatives

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

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

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

The Rapid Growth of the Sharing Economy in the Arab World

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

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

Early Attempts At Regulation

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

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

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

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

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

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

Embracing the Sharing Economy for Regional Socio-economic Development

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

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

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

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

The Future of the Sharing Economy in the Arab World

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

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

We recently looked at business plan competitions in the region for a youth employment initiative we’re contributing to for an international organziation. Here are the business plan competitions that we discovered in the region. Please feel free to add any that we left out to the comments.

Click here to view the interactive map

Tahseen Consulting Arab Business Plan Competition Interactive Map