Arab Knowledge Economies Require More Effective Skills Formation Systems to Generate High Skill, High Wage Employment.
As Arab countries pursue knowledge-based economic development, national skill 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.
Nearly all of the countries in the Arab World have adopted development of a knowledge-based economy as a policy objective to meet their economic, political, and social objectives. Policies aimed at catalysing 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 to help governments align skill formation policies with knowledge-based economic development.
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, labour 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.
Wes Schwalje; “The changing demands of knowledge-based economic development create a need for interdependence and collaborative networks for effective skills formation. 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.” — Wes Schwalje, Chief Operating Officer of Tahseen Consulting and author of the report
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 analyse their skills development systems.
Walid Aradi; “Arab skills formation system reforms must challenge the assumption that more education is always better. 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.” — Walid Aradi, Chief Executive Officer of Tahseen Consulting
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 to them 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 labour market success or failure passes the burden on to individuals are prone to market failure without sufficient demand for skills from the labour 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.