'Talent is the new oil' highlights Heidrick and Struggles first Middle East Talent Index

This leaves the Middle East region at a severe disadvantage, forcing a reliance on foreign workers.

The Middle East Talent Index is an attempt to quantify and map potential hot spots for the quality of human capital and recruiting talent now and in 2012 in eight Middle East countries: United Arab Emirates, Saudi Arabia, Kuwait, Egypt, Iran, Jordan, Qatar and Bahrain. It is a regional version of the original Global Talent Index issued in 2007 by Heidrick and Struggles in co-operation with EIU.

Commenting on the survey, Ayman Haddad, Managing Partner MENA, Heidrick and Struggles, said:

"The Middle East Talent Index measures not only a country's natural potential for producing talent in socio-demographic terms, but also the conditions necessary to realise this potential like educational infrastructure and ability to attract foreign direct investment."

He added,"The population of each of the eight countries highlighted varies dramatically but the common trend is the high volume of young people - almost 65% of the region's population are under the age of 25.However to develop their talent, raising the quality of universities and improving attitudes towards career development and management are paramount."

He also pointed out that the ability of the Middle East to truly sustain talent rests on its ability to diversify and create alternative wealth streams through new industries, new micro-economies, greater exchange of ideas, creation of competitive opportunities and increase in foreign direct investment.

The research was based on seven major areas including demographics, quality of compulsory education systems in the countries surveyed, quality of universities and business schools, quality of the environment to nurture talent, mobility and relative openness of the labour market, trends in foreign direct investment and proclivity to attracting talent.

Highlights of the findings per country include:

Egypt holds the top spot in the Middle East Talent Index by a small margin because of its much larger population of 20-59 year olds and the relative strength of its universities and business schools. It scores poorly on the 'quality of the environment to nurture talent' and 'proclivity to attracting talent'. Foreign direct investment stands at modest levels.

Jordan despite its small population, low dependence on oil exports and small employment growth, is one of the more consistent scorers, ranking second in four categories. While it does not do well at attracting talent with low GDP per capita and low GDP growth, the data suggests an encouraging labour market and a positive environment for developing talent in the future. Jordan has the second highest level of foreign direct investment after Bahrain.

Qatar remains in third position in both the 2007 and forecast rankings. A strong compulsory education system is let down by a weak tertiary education sector with a low number of universities. It also has the highest cost of living across the region in 2007 although this is set to improve by 2012.

Fourth placed Bahrain loses out because of its low population; it scores well in other measures and while there are weaknesses in its higher education system, these show a slight improvement during the five year forecast period. It shows an encouraging openness of trade, ending up in second place behind the UAE. Bahrain also has the highest level of foreign direct investment in the region.

Saudi Arabia is the big gainer in the Index, moving up two places between 2007 and 2012 to reach fifth place (although it beats UAE by only 0.1, showing how subtle the changes over this forecast period can be). It is probably the most enthusiastic globaliser of the group and its outlook and strong compulsory education system will help develop domestic workers with an international perspective.

United Arab Emirates continues to concentrate on developing positive environments for attracting and retaining international talent though the country is let down by poor compulsory education standards with low spending on education as a proportion of GDP and falling enrolment rates for primary and secondary education. By 2012 the knock-on effect of falling secondary enrolment rates will impact the quality of the tertiary education sector.

Kuwait does consistently well across almost all the categories but the country suffers significantly from a shortfall in foreign direct investment which will be an important mechanism for knowledge transfer. Absolute improvements in many of Kuwait's results are not strong enough to compete with the pace of change in the countries it is closely ranked against - the UAE and Saudi Arabia. Relatively little improvement in forecasts for foreign direct investment also continue to act as a drag to its overall score.

Islamic Republic of Iran remains in eighth place overall throughout the forecast period. Iran has strong demographics but suffers from low 'Quality of compulsory education'. However, slight improvement is forecast in 'Quality of universities and business schools' in Iran for 2012.

"The new generation growing up in the Middle East has big ideas. We must let them dream big and create conditions that inspire them to live those dreams. Without imagination and talent the dependence on oil will smother attempts to diversify these economies," concluded Haddad.