The region needs jobs—new technologies can help provide themby Claire Spencer / March 3, 2017 / Leave a comment
A region in which two-thirds of the population are under 30 should be dynamic and ready to embrace the technological changes reshaping the world’s economy. Yet, despite increasing global interconnectedness, the Middle East and North Africa have the world’s highest levels of youth unemployment. Only around one in five of the region’s women are employed, far behind the global average. The UN’s latest Arab Human Development Report estimates that the region needs to create an eye-watering 60m jobs by 2020.
Yet governments have failed to display any urgency or imagination. Youth-focused policies, both local and international, have prioritised stemming migration and preventing radicalisation ahead of thinking creatively about tackling the causes of both. Outside the Gulf, employment policies still focus on the largely failed route of attracting inward investment and official funding lines and incubators for small and medium enterprises. But even success stories such as Morocco and Tunisia’s car plants and aeronautics hubs rarely create more than 30,000 jobs apiece. In turn, old-school job creation schemes in industry and farming are being rendered obsolete by robotics and Asian competition.
It is time for a new approach. One of the region’s overlooked positives is access to mobile phones, which has risen from a low start to well above the world average. For those with smartphones, apps can provide access to the “money, markets and mobility” promised, but not delivered, by the European Union to the Arab Spring states. At the moment, none of the regulatory, financial or legal structures exist in the region for any more than an entrepreneurial minority to pursue new forms of employment and market development.
The “collaborative” platform-based interactions between consumers and service providers epitomised by Uber and Airbnb seem like a logical place to start. Across the EU, collaborative platforms contributed €28bn of gross revenue in 2015, and could add billions more to the economy, according to a European Commission report. Yet there is no mention in official EU circles of supporting, funding and promoting collaborative start-ups in its volatile southern neighbourhood.
One reason may be that with every innovation comes teething problems, and there are not-so-hidden pitfalls in labour rights, taxation, legal liabilities and responsibilities, regulation and monitoring. Critics of the gig economy point to the test cases brought in Britain against Uber, Deliveroo and Pimlico Plumbers for exploiting loopholes in employees’ rights; a British government review panel on workers’ rights is currently exploring ways to limit future cases of this kind.
In France and Spain, Airbnb has fallen foul of local hotel taxes and restrictions on rental times. Others fear that mobile platforms merely extend the monopolistic tendencies of existing business models, where a large proportion of revenues go to Silicon Valley’s 1 per cent. There is nonetheless room for further innovation and, critically, competition in a sector that is barely a decade old.
In the Middle East, the place to start might be the not-for-profit versions of community-based sharing via mobile apps, which would at least have the merit of allowing people to address their local needs faster than their national governments. App developers in Morocco have developed voice-activated software for semi-literate rural communities to buy and sell goods and services. In Egypt, women have created an online car-sharing scheme to make up for gaps in public transport in Greater Cairo.
The potential for leapfrogging some of the teething problems of early models is also there, as are the risks of exploitation. Weak law enforcement, ineffective government and endemic corruption are prevalent in the region. But the promise of mobile technology is that it puts those who best understand it to the fore—namely the young.
The current weakness of most job-creation policy in the region is that it hinges on outmoded models of how to put the majority of low and semi-skilled employees to work, while offering nothing to the region’s disproportionately unemployed graduates. It also fails to see the under-30s as participants in the design of their collective destiny. Since their governments are highly unlikely to get anywhere close to creating 60m jobs over the next three years, it is clearly in Europe’s interest to listen to the region’s young innovators, find out what they need, and help them exploit the advantages of new technology.