Dubai: SME’s (small and medium enterprises) and larger companies in the Arab region should partner with the public sector in setting up education requirements for future jobs, according to experts at the Young Arab Leaders forum on Monday.
SMEs and other private sector companies have certain skills that they look for in potential employees. However, the education system does not provide these skills, according to Nasser Saidi of Nasser Saidi and Associates. Thus, these private sector companies should bridge the mismatch between education and job requirements to increase employment in the private sector, said Fadi Ghandour, founder and vice chairman of Aramex.
Sulaf Al Zu’bi, CEO at Injaz UAE, an organisation which trains and supports future entrepreneurs, suggested that more private sector companies place graduates in internships to equip them with the necessary work skills.
SMEs make up around 95 per cent of businesses in Dubai. Also, SMEs account for around 70 per cent of the private sector job creators in the Arab world, according to Ghandour. The private sector is “about SMEs” and not big companies, he said.
“The entrepreneurship story is a private sector story,” Ghandour said. The private has “people that are creating jobs” and “people that have a lot of money.”
Ghandour said the private sector has not been playing an effective role in addressing the issue of future job creation. This role is played largely by the governments that have “not been doing a great job,” Ghandour said.
The UAE government has been persuading Emiratis to start their own businesses. This could help resolve the economic issue of not having enough Emirati employees in the private sector.
Khalifa Fund, a UAE-based funding vehicle, organises entrepreneurship-related activities to encourage “Emiratis to take entrepreneurship as a career because…the majority of Emiratis tend to join the public sector after they graduate,” said Najla Al Midfa, manager of the entrepreneurship development department at Khalifa Fund’s Ajman branch.
The majority of UAE nationals choose the public sector due to the high salaries offered by the government.
Funding options, challenges
The conference organised by the Young Arab Leaders touched on the funding options and challenges faced by entrepreneurs.
Funding from Angel networks and funding vehicles, such as Khalifa Fund have become more accessible in the Arab region, according to experts. Crowd funding allows entrepreneurs to work with investors to grow their company.
Khalifa Fund provides interest-free loans with a four-year repayment. Start-ups can receive up to Dhs3 million.
However, banks loans remain out of reach for many SMEs.
“Four per cent of bank loans in the UAE go to SMEs, which is the lowest in the region,” said Saidi.
Other challenges include time management. There is also a lack of dedication from some entrepreneurs. Entrepreneurs starting a business tend to do so without giving up their day job — which can distract them from developing their business, according to Al Midfa.