Business | General
Gulf needs to create 4m jobs in next 20 years
The Gulf needs to create four million jobs in the next 20 years or face increasing unemployment among nationals, according to a report by consultants McKinsey and Company.
- By Scott Shuey, Chief Business Reporter
- Published: 00:11 January 28, 2008
Dubai: The Gulf needs to create four million jobs in the next 20 years or face increasing unemployment among nationals, according to a report by consultants McKinsey and Company.
The report was delivered by Kito de Boer, managing director of McKinsey in the Middle East, at the "Building People Ready Businesses '08" conference in Dubai, an event hosted by Microsoft. Bill Gates, Microsoft chairman, delivered the keynote address.
De Boer said oil money alone will allow the region to keep up with the dominant demographic trend, that of 42 per cent population under the age of 15.
"Unless the region's job growth is fast enough to accommodate the upcoming demographic surge, unemployment among locals will continue to rise, disparities in wealth will grow, and further import of foreign workers will place increasing pressure on the most vulnerable members of the nation," he said.
He said that private companies will need to create the majority of the four millions jobs; however, private companies are only producing 82,000 jobs per year for locals in the Gulf. "In the future the private sector will need to quadruple its job creation rate and pay twice as much for each of these jobs."
To achieve this, regional companies will have to help change the Gulf's current economy.
Microsoft speak
"To put it into Microsoft speak, the region needs to upgrade its software from Gulf 1.0 to Gulf 2.0."
He defined Gulf 1.0 as private companies importing labourers from South Asian countries and Gulf nationals working in job created by the government with little productivity. He said Gulf 2.0, where locals will have to play a greater role in the private sector, was currently in "beta testing" in places like Dubai. In Gulf 2.0, the Gulf must move from labour-intensive fields to capital and knowledge-intensive fields, he said.
To accomplish this, de Boer said the region would have to revamp its education system and find a way for small and medium enterprises to get more capital.
He criticised the educational institutions, which "produced a population that is not fully prepared for a knowledge-based economy."
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