A survey conducted by Oliver Wyman in collaboration with INJAZ Al-Arab in the MENA region, has revealed 84% of the region’s youth respondents believe the private sector will continue to grow in the region. More than half (56%) hold a positive opinion on the sector overall – a high ‘approval’ rate for the private sector given the dominant role of the public sector in many countries. The survey evaluated demands of the future labor market and perspectives of the young generation shaping the private sector’s potential contribution to overall economic growth.
While 40% of the youth population believe future growth in the private sector will be driven by multinationals, 25% are inclined to believe that this will be driven by SMEs rather than large national enterprises and startups. 35% of the youth believe that privatizing education will be beneficial to the economy, followed by professional services (30%), human health (29%) and agribusiness (28%).
(Infographic by Oliver Wyman)
One implication found in the survey was that despite the manufacturing sector being relatively small, it is where private firms are most beneficial due to the potential creation of high-skilled jobs and low dependency on imports. When asked about the digital economy, 88% of the respondents said would be a major driving force of the private sector; however, 45% also felt that digital skills are insufficiently reflected in the current curriculum.
“While the private sector has grown significantly over the last years, historically the public sector has remained dominant across the MENA region. Diversification is the key economic growth driver and the private sector has a key role to play in supporting governments efforts towards this. Perhaps more important than its fiscal effects is that privatization has the potential to offer a number of economic and social benefits,” said Greg Rung, Partner and Head of Social Impact at Oliver Wyman (MEA).
“With industries across all sectors of the economy evolving through institutional reforms and an increased focus on digital economies by regional governments, the survey shows that the youth are increasingly aware of the value of the private sector. They have clearly outlined the areas that need to be focused on as they enter the workforce in the current economic climate,” he added.
The survey was taken by 949 respondents between the ages of 16 and 35 and covered four specific areas including the demographics of the respondents, private sector growth drivers and industries, challenges and successes of entrepreneurs and employees and implications of the digital economy on the education system.
“The youth is currently facing challenges such as an overall shortage of job opportunities, uncompetitive salaries, and opportunities for career development. The collaboration with Oliver Wyman has produced strategic results for the consideration of all stakeholders involved in youth empowerment and allows in turn, for solution-based growth on major issues as the sector advances,” said Akef Aqrabawi, President & CEO of INJAZ Al-Arab/JA MENA.
The study revealed three broad strategic initiatives required by governments to sustain economic growth, create jobs in the private sector, and to reap the benefits of the future digital economy. These include improving institutional capabilities and regulations, adapting the educational system to have a stronger focus on skills, and attracting domestic and foreign investments in key sectors.