In the coming decade, the Arab world will need to create a staggering 75 million jobs, an increase of 40 per cent more than currently exist to keep pace with the young and fast-growing population set to enter the workforce.
However, with the substantial jobs-skills mismatch currently plaguing the region, this much-needed rise in employment may not be achievable.
A study carried out by management consulting firm, Booz & Company, in collaboration with the World Economic Forum (WEF) and Saudi Basic Industries Corporation (SABIC), has identified various ways in which large employers can decrease the Arab World's youth unemployment rate now at an average of 24.9 per cent.
According to the World Bank data, the six GCC states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) have some of the highest youth unemployment rates in the world, as high as 40 per cent among certain age groups.
More than half of the region's population is under 25 years.
Based on the WEF and Booz & Company's study on ‘The Role of Large Employers in Driving Job Creation in the Arab World', the labour force across the Arab World lacks both the job-specific and general employability skills that would allow them to be productive and motivated members of the workforce. The solution to the youth unemployment challenge in the region is therefore not simply better education.
A new paradigm is needed to tackle the climbing unemployment rate in the Middle East. In this model, potential jobs need to be identified, followed by specifically-tailored training programmes designed to deliver the required skills. Key stakeholders in this paradigm include government, business, and academia all of whom must combine their efforts to align skills with national economic needs, thereby maximising the impact of the new approach.
The study pointed out that large employers, rather than governments, can play an increasingly important role in job creation, by fostering the development of skilled national workforces. These employers whether state-owned enterprises (SOEs) or private family-owned conglomerates dominate the national economies and they can, in the short term, best understand what the labour market needs and spearhead a number of job-creation opportunities accordingly.
"They have the levers to influence decisions within their organisations as well as within their suppliers, and thus have the ability to develop national talent for the required jobs," said Samer Bohsali, partner with Booz & Company.
Businesses and the education sector also need to join forces and identify the jobs that present quick employment opportunities by specifying the skills needed and developing the correct training programmes to prepare these young people for these positions. The government also retains a critical role to play.
"In adopting the new collaborative and multi-stakeholder model, governments need to shift their purpose from a commanding and controlling position to a communicating and convening one," said the study.
This approach also include "revising labour laws to create a combination of incentives and regulations which stimulate national skills development and increase labour-market flexibility and taking advantage of their main untapped national resource-women."