Why upskilling must be at the heart of the region’s post-Covid recovery efforts

While the world is still grappling with understanding how the public and private sector landscape will continue to evolve in the coming months and years, one thing is certain:  there is an urgent need for highly-skilled individuals to address emerging issues and ensure future prosperity. 

The main concern here is that, even before the pandemic hit, organisations in every sector were struggling to attract, recruit and retain people with the skills needed to meet the demands of a digitised, automated, AI-driven world. The drastic surge in demand in 2020 further exacerbated the issue, heightening the growing mismatch between employer needs and candidate skills.

As a result of the combined effects of the pandemic and increasing digitalisation, 50 percent of all employees will need to reskill by 2025 according to findings by the World Economic Forum. Already, hundreds of millions have been left unemployed, unable to enter or re-enter the workforce because they do not have, or no longer have, the required skillsets, further plunging the global economy into the worst recession since World War II. Regionally, the economic downturn has been just as great. In the UAE, the Arab world’s second-largest economy, the GDP is estimated to have shrunk by about 6 percent in 2020 according to the central bank.

Against this backdrop, upskilling the workforce presents a panoply of benefits, with a study by the European Centre for the Development of Vocational Training showing that a reduction in the number of under-skilled adults could add up to 250 billion dollars to national economies and help relieve the pressing need for highly skilled individuals.

Thankfully, many countries in the Gulf region, and most notably the UAE and Saudi Arabia have, in recent years, been steadily investing in supporting the youth, boosting economic diversification and improving education. These strategic pillars, supported by proactive upskilling programs, could be key to addressing some of the issues that emerged or were cemented in 2020 and that will likely continue to impact economies for the foreseeable future.

Engaging the youth

Youth unemployment has plagued both developed and developing countries for decades. In the Gulf, governments have been particularly challenged by the region’s significant demographical shift known as the ‘youth bulge’, with 60 percent of its citizens under the age of 30 according to a 2019 PwC report.

The same report revealed that before the pandemic, youth unemployment was already more than twice as high as the overall unemployment rates, standing at 11 percent in the UAE and 27 percent in Bahrain and Saudi Arabia. These staggering figures signal that there is likely a significant disconnect between the educational system and the economy.

And while we don’t as of yet have a full picture of Covid-19’s impact, what is clear is that today’s youth likely stand to lose the most and feel the effects of the economic fallout for decades to come. It is no surprise then that studies have shown that the economic and social costs related to long-term youth unemployment are significant. It is therefore essential that government and business leaders act quickly to harness the talents of the local youth by giving them the tools and training needed to meet the demands of the current and future workforce.

Refocusing economic diversification strategies 

While diversification has been at the heart of development agendas in the region for many years, the pandemic sharply increased the need to change the economic landscape at a more rapid pace than anticipated. While reliance on oil has steadily declined in recent years, regional economies are still heavily dependent on oil revenues. And with demand drastically decreasing in 2020 and OPEC+ production cuts expected throughout 2021, oil GDP will likely remain flat for some time, meaning that regional leaders will need to rely on other revenue streams to keep economies afloat.

Add to that the fact that the oil industry is just one of many that have been seriously impacted by the pandemic. Many of the jobs within these affected industries are not expected to return anytime soon while others may never return.

In light of this, governments need to zero in on future-proof industries that are heavily focused on technology and innovation because they generate net value for the economy and create jobs. However, this requires private and public sectors to make significant investments in AI, analytics, and digitization to ensure future success. This includes ensuring that the region is able to tap into the right talent; without access to a highly skilled workforce, organisations will struggle to capitalise on these technologies.

The good news is that countries in the region have had digital transformation strategies in place for many years, which is a testament to their commitment to developing knowledge economies. Now, governments must critically regroup and reassess these plans to ensure that priorities are aligned and in tune with pressing needs.

Boosting education

With the changes caused to the business environment as a result of the pandemic, education, and in particular upskilling and reskilling, should be at the heart of any post-Covid recovery plan. 

However, first, educational systems need to be objectively re-evaluated. For years, these systems have had significant shortcomings – which have become increasingly evident throughout the pandemic – because of schools and employers often operating in silos. As a result, even in the pre-Covid-19 economy, companies had taken it upon themselves to begin to retraining employees for high demand tech jobs.  This type of intervention was crucial for many employers who were facing major obstacles in recruiting people with the right skillsets.

Now, as the world heads into uncharted territory, governments must look to encourage cooperation and build bridges between employers, educational institutions and training providers to ensure offerings reflect current and future market needs.

We’ve seen first-hand the tremendous impact of employer-driven, practitioner-taught training. Since partnering with the Misk Foundation in 2018, we have enabled over 2,000 young Saudi professionals to advance their careers. The best part is, that in line with the demands of this fast-paced world, where speed to market is more critical than ever, upskilling programmes can be launched quickly and completed in a matter of weeks or months.

What’s next?

Creating a technology and innovation-driven economy has been a key priority for governments in the region long before Covid-19 upended the world. However, in order to grab the digital revolution by the horns and leverage it to drive economic growth, policies that set clear pathways need to be developed and enforced.  These policies should focus on: assessing the skills of the current workforce to identify gaps in the region; creating programs that equip the current workforce with the skills required to meet market needs; and re-evaluating existing curricula in collaboration with industry leaders to ensure that the youth is prepared for the workforce of the future. Thankfully, robust foundations put in place by the UAE and Saudi Arabia’s far-sighted leadership will go a long way in helping achieve these ambitious objectives.