Job creation key to 'sustainable economic growth'
Dubai, February 17, 2014
Focused and long-term investment in developing the skills and creating jobs for young people is expected to promote sustainable economic growth in Saudi Arabia and the GCC as a whole, said an expert.
More than 15 million young people are set to enter the workforce in Saudi Arabia, Qatar, UAE and Egypt in the next 10 years, he said.
Bassam Hage, Mena markets leader at EY, a leading professional services firm, pointed out that policy makers and the private sector need to collaborate to catalyse economic growth by capitalising on the number of young nationals available to enter the workforce.
“GCC governments have been pushing on multiple fronts to address the issue of job creation with efforts ranging from long-term strategic policies, to short-term desired outcomes. Although these initiatives had measurable success in Saudi Arabia and other GCC countries, it is evident that there is the need for additional sector-specific efforts,” said Hage.
EY will be the strategic knowledge advisor at the upcoming Jeddah Economic Forum (JEF) 2014 and will launch a report about the perspectives on youth employment across the GCC.
Ahmed Reda, office managing partner, EY Jeddah, said: “Our objective is to outline areas for attention which can create an improved dialogue between educational institutions and employers.
“The study aims to offer insights into the opportunities for creating a more robust human capital infrastructure, in order to bridge the training and preparation of young people with the labour force requirements of the region.
"It will look at ways to sustain growth for the economy by merging the gap between business needs and the workforce capabilities to support entrepreneurship and enhance work-related skills.”
“The key elements to creating a business climate and environment that encourage and enable job creation are business climate reforms, infrastructure development, focused outreach to investors, economic diversification, micro ,small and medium enterprises (MSME) development and improved access to finance,” said Gerard Gallagher, Mena advisory leader.
Sustainable economic growth and job creation is dependent on examining both the demand and supply sides of youth unemployment.
The factors key to establishing an appropriately skilled and sized labour force that is aligned to future private sector needs include understanding attitudes and work ethics, providing foundation and technical skills, incentivising workers, enhancing the human capital infrastructure, and continuously developing workers, he said.
“When brought together, the supply and demand factors must balance the need for an expatriate workforce to support growth with the need to increase training and employment of young nationals, addressing the key impediments to sustainable national employment across the region, ” added Gallagher.
“Entrepreneurship is a very important topic when looking at job creation. In Saudi Arabia, entrepreneurs are being encouraged by the government to help build a more vibrant economy. At present, rather than going into innovative commercial activity, skilled Saudi nationals tend to work in public sectors such as health and education. Currently, they account for only 10 per cent of private sector employment,” said Reda.
Despite government efforts, the growth of entrepreneurship in the GCC region still faces challenges, he said.
To tackle this, the efficacy of current governmental approaches to encouraging new business needs are to be addressed, along with the environmental and financial impediments that currently make it difficult for young people to set up businesses, said the report.
“While there are key challenges surrounding youth employment and skill development, there are also tremendous opportunities for regional economic growth,” said Reda.
Tackling youth unemployment requires serious discussions on not only how to boost demand through strategic job creation across key growth sectors such as tourism and transportation, but also of the impediments to a pro-business environment whereby entrepreneurship is encouraged and facilitated, he said.
“In parallel, we must also assess how prepared the supply of young nationals is to meet the dynamic demands of the private sector,” concluded Ahmed. - TradeArabia News Service