In the Middle East and North Africa region (Mena), the most immediate economic challenge is not output diversification, nor the creation of new fiscal regimes, it is the creation of enough productive and sustainable jobs for its youth. At the same time, the region needs to equip itself with the combination of talents and skills that will make it competitive in the world of Industry 4.0 and artificial intelligence.

French business school Insead’s Mena Talent Competitiveness report, which draws from the annual Global Talent Competitiveness Index (GTCI) 2017, showed significant differences across countries in their ability to grow, attract and retain talent. This year’s report, which benchmarks 118 countries, focuses on how technological advances are affecting talent competitiveness and the nature of work, exploring both significant challenges and opportunities, and important shifts away from traditional approaches.

Globally, the UAE (19^th rank) and Qatar (21^st rank) are both part of the high-performing countries. Saudi Arabia (42nd) performs better than some European countries, such as Greece (43rd) and Bulgaria (49^th). Jordan (58th) increasingly attracts foreign talent, having become a regional technology and start-up hub. Northern African countries exhibit much lower talent performance: Tunisia is 77th; Egypt is 88th; Morocco, 96th; Algeria, 107th.

The data also showed a striking correlation between formal education performance and levels of employability; whereas performance in terms of formal education is very similar across the region, levels of employability diverge substantially, for example between Qatar and the UAE on one side of the spectrum, and between Morocco and Algeria on the other. The Gulf countries have been better able to create educational and training systems that are more relevant for the economy. In those countries, private firms find it relatively easier to recruit skilled employees and thus complain less frequently of facing a skills gap as a major constraint.

Building on success

Across the Mena region, the proportion of the population aged 15-24 has peaked at 20 per cent after 2010, and absolute numbers keep growing. Although this could be seen as a source of strength, vitality and competitiveness, this ‘youth bulge’ is also proving a major challenge, since youth unemployment in the region is twice the world average.

A key imperative for the region is to develop the talent the next generation will need to be competitive in the global knowledge economy. Leaders from the public and private sectors urgently need to take the targeted actions required to achieve this strategic goal. To do this, they can leverage some of the successes that have characterised the recent history of Mena countries, especially in the GCC area. For instance, the UAE seems well positioned to face the future of work; cities such as Dubai are making a name as technology start-up hubs. The industry will have to identify the right strategy to tap into this potential, grow the private sector, implement technology innovation and boost education levels.

Leveraging technology

Technology can serve as a tool for improving employment and labour market outcomes. But it also has wider implications in the world of work that present significant opportunities if a series of challenges are overcome. The production of employable skills is the most important part of the equation. Jobs in the information age will start to look different as firms are increasingly demanding a mix of technical skills and digital literacy (to use diverse software and to manage data-intensive processes) and collaborative and other soft skills, including the ability to communicate and collaborate.

Managers and highly skilled professionals are also expected to be the ‘dual-thinkers’ that digitisation requires; people who have the skills to recognise and develop new business opportunities, and the technical skills to identify which technologies to use to do so. Perhaps more challenging from the point of view of a whole career is the development of deep skills such as adaptability and learning ‘how to learn’.

This is important because the types of jobs available will be changing fast in the fourth industrial revolution. Robots and algorithms are replacing people in an increasingly broad array of tasks. New jobs will be created, but they will require new skill sets, making lifelong learning and upskilling ever more important. In a world in which robots and humans will cooperate rather than compete, lifelong learning will become the norm. As machines continue to improve through ‘deep learning’, humans will keep an edge by cultivating (and developing) their four ‘C-skills’: creativity, communications, cooperation and the ability to deal with complex situations.

Unleashing local potential

Saudi Arabia and the UAE are among the world’s largest consumers of digital content per capita. Across the Mena region, some of the enablers for entrepreneurship are already in place, including online pitching platforms to connect budding entrepreneurs with strategic investors and venture capitalists. A recent report by US-based Strategy& stated that “if the pace of digitisation in the Mena region were to accelerate, it could create more than 4 million new jobs by 2020”. Online platforms in the region (ridesharing app Uber, car booking firm Careem, YouTube, and virtual skills marketplace Nabbesh) are creating new employment opportunities. They also help match the supply and demand for skills, for full-time jobs and also for micro work tasks such as data entry and verification or graphic design.

Yet, the development of high-tech start-ups will not by itself be sufficient to generate the number of jobs required by young people and society at large. Efforts need to be made to boost the development of the private sector.

In the Mena region as a whole, the non-oil private sector remains relatively small and underdeveloped. By and large, the public sector continues to attract talent and provide better compensation. In spite of significant efforts towards diversification, hydrocarbons and/or government activities account for the majority of total GDP in several Mena countries, and employ more than 30 per cent of the workforce. For most of the countries in the region, the state-centred development paradigm resting on external rents such as fuel exports, foreign aid or remittances remains dominant. Moreover, across the region men are three times more likely to participate in the workforce than women. All this can be summarised in one sentence: the region is not using its full human potential.

This makes it all the more striking that the region holds huge potential to become a key player in a knowledge-powered global economy. Unleashing its human potential will largely rely on the region’s ability to provide its younger generations with meaningful jobs. Education, the development of the private sector, and the understanding of how technology is changing the world of work will be key ingredients for success. This is a complex but urgent task, which will require broad support across local populations and determined action from its leaders.