Photo credit: Oliver Wyman
MENA's youth are increasingly relying on the private sector to lead growth across the region, according to a report conducted by Oliver Wyman in collaboration with INJAZ Al-Arab.
The survey of 949 respondents between the ages of 16 and 35 showed that around 84% of the MENA's youth believe that the private sector will continue to grow.
It also found that more than half (56%) had a positive opinion overall, with a high approval rate for the private sector given the dominant role of the public sector in many countries. Positive opinions of the private sector were four times more that the negative opinions, with the UAE showing the most positive view of the private sector.
The survey 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.
Almost 40% believe that future growth in the private sector will be driven by multinationals, while 25% believe that it will be driven by SMEs rather than large national enterprises and startups.
Meanwhile, 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%).
Whereas 88% think that the digital economy will be a major driving force of the private sector, 45% also feel that digital skills are insufficiently reflected in the current curriculum.
"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,” said Greg Rung, Partner and Head of Social Impact at Oliver Wyman (MEA).
The region’s public sector has traditionally been a preferred source of employment for MENA’s new labor market entrants and experienced job seekers alike, resulting in an oversaturated public sector.
According to the World Economic Forum, public sector jobs account for 42% of non-agricultural formal sector employment of national citizens in Jordan, 70% in Egypt, and about 80% across the UAE. It has the highest central government wage bill as a percentage of GDP in the world at 9.8% of GDP, nearly twice the world average and fourfold that of Japan.
Studies by the World Bank have found that the MENA region will need to create about six million new jobs each year to absorb new labor-market entrants and bring down unemployment, especially among the youth.