Education and Entrepreneurship to address

Youth Unemployment in MENA Region

Expert Group Meeting on

“Strategies for Eradicating Poverty to Achieve Sustainable Development for All”

United Nations, New York, 10-11 May 2017

MENA region: lack of job opportunities and widespread sense of exclusion

2011 2017

Demanding:• Freedom• Democracy• Dignity• Employment• Equal opportunities

Demanding:• …• …• Dignity?• Employment• Equal opportunities

Challenge: How to break this vicious circle?

Poverty and exclusion

Frustration Instability

Youth Unemployment

Question

What is the role of education and Entrepreneurship in addressing youth unemployment in MENA region?

Agenda

1. Youth unemployment in MENA region

2. Private sector is the only remaining option to create more jobs!

3. Why desirable private sector jobs are very few?

4. More and better Education for Youth Employment

5. Entrepreneurship as a Panacea to Youth Unemployment and Poverty

6. The way forward

Youth Unemployment

0.05.0

10.015.020.025.030.0

The Highest Youth unemployment by region

0%10%20%30%40%50%60%

Jord

an

Egyp

t

Tun

isia

More education Being employed

Basic education Tertiary

0

10

20

30

40

Egypt Jordan Morocco Tunisia Yemen, Rep.

Persistent

1990-1999 2000-2015 2016

Data: WDI + ILO

What options are available for young people to get a job?

High-paying and attached to a formal

contract or social security

Low pay No formal contract or social security

High-paying and attached to a formal

contract or social security

High risk

Public Sector

Formal Private Sector

Migration Abroad

Informal Private Sector

Jobs

Formal Private Sector the engine of job creation in MENA

It provides:

• Fair income

• Security at work place

• Social protection

• Prospect for personnel development and social integration

But,

• Very competitive

• Few jobs available

• No guaranteed job security

we need to get youth out of their comfort zone (the majority still prefer public sector)

Services are the engine of job creation!

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

World MENA Asia and the Pacific Latin America and theCaribbean

Sub-Saharan Africa

Services are the main provider of Jobs

Agriculture (%) Industry (%) Services (%)

Data: WDI

Why the desired private sector jobs are very few?

• Skill mismatches Education + Training

• Weak entrepreneurial culture Entrepreneurial Ecosystem

• Low productivity (+ reservation wage relatively high)

• Size of the market

• Labour market regulations

• Business environment

• Low competition and unequal opportunities

More education implies a greater likelihood of being employed and access to higher social status

But needs:

1. Higher quality education

2. Specific rather than general skills

3. Coordination between education institutions and potential employers with regards to placement of graduates

4. Incentives to limit brain drain

Education Achievement in the MENA: According to Arab Youth Survey 2017: 66% in North Africa think that the Education system does not prepare students for the job of the future

84

86

88

90

92

94

96

98

100

Egypt,Arab Rep.

Jordan Morocco Tunisia Yemen,Rep.

Literacy rate, youth total (% of people ages 15-24)

Higher

educatio

n and

training

Availability

of research

and training

services

Efficient

use of

talent

Country

capacity

to retain

talent

Quality of

math and

science

education

University-

industry

collaboration

in R&D

Egypt 3.2 2.7 2.5 2.9 2.6 2.4

Jordan 4.7 4.5 3.2 3.8 4.2 3.8

Morocco 3.4 4.0 2.9 3.4 4.0 3.2

Tunisia 4.1 3.5 2.5 2.7 4.4 2.9

Quality of Education ( 1 to 7)

0102030405060708090

100

School enrollment, secondary (% gross)

Poorest Richest Rural Urban

Morocco 53 8 49 16

Yemen 59 9 35 14

Egypt 18 2 13 6

Tunisia 19 1 12 2

Jordan 4 2 2 2

Percentage of pop living in education poverty

with less than 4 years of education for the age

group 20-24 years

Data: WDI + ILO + WGF + UNSECO

Inequality in access to Education

1 29 12

168 10

2331

42

2025

5359

67

0

10

20

30

40

50

60

70

80

Morocco Yemen Egypt Tunisia Jordan

Tertiary completion rate (%)

Poorest Average Richest

3

12

20

5

13

33

9

26

50

0

10

20

30

40

50

60

Yemen Morocco Tunisia

Learning achievement in Sciences (%)

Poorest Average Richest

6

2420

8

24

33

12

41

50

0

10

20

30

40

50

60

Yemen Morocco Tunisia

Learning achievement in mathematics (%)

Poorest Average Richest

Data: Global Education Monitoring Report, UNESCO

1319

53

0

10

20

30

40

50

60

Poorest Average Richest

Learning achievement in reading (Morocco)

Entrepreneurship as a Panacea to Youth

Unemployment and Poverty

• SMEs play a particularly important role in broad-based employment potential

• Given the diversity of the SME sector, it can accommodate a wide variety of skill sets and provide opportunities to escape poverty

• Promoting youth entrepreneurship could be an interesting option to address youth unemployment and poverty

• Entrepreneurship provides a pathway for self-employment and entry into formal markets

Entrepreneurship

0

0.5

1

1.5

2

2.5

3

Governmentalsupport and

policies

Governmentalprograms

Basic schoolentrepreneurialeducation and

training

Post schoolentrepreneurialeducation and

training

Cultural andsocial norms

The Entrepreneurial Ecosystem

MENA World

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

OpportunityPerception

Startup Skills

RiskAcceptance

Networking

CulturalSupport

OpportunityStartup

TechnologyAbsorption

Human Capital

Competition

ProductInnovation

ProcessInnovation

High Growth

Risk Capital

Entrepreneurship Index

Tunisia Jordan Morocco Egypt World

Data: GEM Global Entrepreneurship Monitor + Global Entrepreneurship Index

The Way Forward: Education

• MENA countries need to target skills development through improving the quality of education and training systems

• There is a need for better training programmes and private sector incentive schemes that help to fill the skills gap and to improve employability among youth :

1. Better tailored programmes are more successful in meeting the needs and abilities of specific groups

2. A combination of subsidized work experience and vocational training is the best strategy to deal with youth unemployment

3. A degree of obligation is desirable to maintain attachment to the labour market

4. Workers' and employers' organizations should be involved

The Way Forward: Entrepreneurship

• Work more closely with the private sector to support programs to disseminate entrepreneurship skills and to assist marginalized people to become entrepreneurs

• Create incentives for the private sector to integrate youth entrepreneurs into value chains

• Improve the entrepreneurial ecosystem:

1. Entrepreneurship training

2. Simplify procedures for starting and doing businesses

3. Make national policies more youth oriented, including labour market regulations

4. Support innovation

5. Better access to financial market (innovative financial products)

The Way Forward: Macroeconomic level

• MENA countries should adopt new industrial policy that could promote global competitiveness and labor-intensive growth

• Create effective engines for higher and sustainable growth to create adequate jobs for youth

• Invest in the key areas and underprivileged regions could, address regional inequality, release pressure on the big cities, and improve labor market efficiency

The way forward

• Labour-intensive growth model

•Invest in the key sectors and underprivileged regions

• Work more closely with the private sector

• Improving the quality of education and training systems

Fill the skills gap

&

improve the employability of

youth

Disseminate entrepreneurship

culture

Promote productivity and competitiveness

Address regional disparities

&

improve labor market efficiency.