Opportunity youth
Imagining a bright future for the next generation
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60%
Job prospects are low, unemployment is high
127m
people entering a labor market with 23% youth unemployment (ages 15–24)
Government services and delivery are challenged
60%
of countries rank in the bottom half of the World Bank’s World Governance indicators for government effectiveness
Conflict and instability undermine opportunities
21m
people physically displaced, and one-third of children under 10 have grown up in a conflict zone
Youth are unequipped for the labor market
93m
children at risk of missing out on early childhood education
Populations’ health levels and health systems are poor
70%
of countries spend less than half per capita on healthcare (PPP adjusted) relative to OECD averages
Today, young people make up 60% of MENAP’s population; they face several structural barriers to sustainable socioeconomic development.
1
Develop globally-competitive talent
The next generation of youth in MENAP will enter work at a time when the labor market is radically changing. The emergence of new technologies will change the skill sets needed to succeed at work: by 2030, a higher share of professions will require university degrees, and more work activities will require socio-emotional and technology skills. Over the next two decades, around 127 million young people are expected to enter the region’s labor force.
Nearly 29 million jobs—about 17 percent of current jobs—are at risk of being displaced by 2030 due to automation
Reskilling and upskilling existing workers
Youth today will grow up to hold multiple careers in their lifetime, requiring them to constantly reskill themselves even after they finish school. Like many countries, the region could adopt an approach where workers receive credits to use with authorized education providers.
Countries have two potential methods of funding learning credits: funding citizens directly through accredited providers; and collaborating with large companies to fund the reskilling of their workforces.
Increase early childhood education
Starting education in early childhood has a major impact on a child’s cognitive abilities later in life and subsequently on their long-term economic future.
higher ROI than any other stage of education
7x
Drive homegrown firms with regional integration
2
Building homegrown superstar firms creates a wealth of opportunities for any economy: the largest firms globally account for a disproportionate share of economic profit and act as important drivers of innovation, employment, and productivity.
Innovation
R&D spend as % of revenue
Top 10%
Median
Bottom 10%
Capital productivity
Revenue per unit of net PP&E
Employment
Thousands
7
3
1
3.4
67
13
56
2.9
1.1
Superstar firms are key to drive innovation, employment, and productivity in the economy.
Performance of firms in top, bottom, and middle deciles of economic profit, average per firm
Source: McKinsey Global Institute
A more integrated market in the region could have a GDP of nearly
and a fair share of around 30 superstar companies
$3 trillion
Increase openness by reducing trade barriers
MENAP could reduce barriers to trade and introduce regionwide product standardization, reduce the volume of documentation required for intraregional trade, and introduce free movement of services to GAFTA, guaranteeing business mobility.
Reconsider labor restrictions
Give superstar firms access to a large pool of talented workers by introducing licensing for highly-skilled workers in each profession and giving those who qualify a ‘talent visa’, letting them work, live, and invest anywhere in the region.
Reconsider strict rules on interregional capital movement
The average MENAP country ranks
globally for easy access to capital.
80th
3
Innovation industries
Going forward, the region will not be able to create opportunities for its youth by continuing ‘business as usual’ working practices. Growing populations and the resulting government fiscal burden will limit the ability of governments to create jobs for the next generation of workers. More of these opportunities will have to come from youth themselves, enabled by an ecosystem that facilitates innovation and entrepreneurship—the primary driving forces of growth and development worldwide.
Source: Startup Blink – 2019
MENAP has a weak startup environment; the region start-up ecosystem is ranked 77th globally.
Startup Blink Countries Startup Ecosystem Index,
Start-up Ecosystem score, 2019
44.1
16.7
15.9
9.1
5.6
5.3
4.7
4.0
3.9
3.4
2.8
1.6
1.2
0.8
1
2
3
40
60
61
65
73
74
80
82
95
97
99
3.9
Region average
Algeria
Qatar
Bahrain
Lebanon
KSA
Tunisia
Jordan
Morocco
Pakistan
Egypt
UAE
Canada
UK
US
Facilitate best environment for entrepreneurship
Countries can consider offering government workers approved leave for starting new businesses since the region has a much higher-than-average share of people in public sector employment. Additionally, governments should aim to improve exit options to reduce entrepreneurship risks by improving bankruptcy laws and IPO regulations. In addition, societal perceptions and acceptance of failure in business and celebrating it could drive a new culture of entrepreneurship.
Enable R&D ecosystems in emerging technologies
Worldwide, government-funded basic research is responsible for about
The region could focus its funding on research into specific strategic topics— either areas where it can address critical challenges and mitigate risks, or areas where it has competitive advantages. We will explore how governments can approach achieving these goals. These research centers would play a major role in fueling innovation industries like AI, Space, and Renewable Energy.
of patents worldwide.
61%
Promote increased access to startup capital
of its SMEs’ financing demand and would require both public and private supply to close the financing gap.
Countries should have the opportunity to focus on four actions to try and close the SME-financing gap and increase access to capital for new businesses: government funding, attracting private banks and investors, debt financing, and crowd funding.
The region currently covers only
16%
Unlock the potential to create
new businesses across MENAP
2 million
4
Bring more women into the workforce to achieve gender parity
Women in the region are unequally represented across the economy, society, and politics with female youth facing even lower representation. These factors are on top of lower access to education in many countries in the region and fewer leadership opportunities that MENAP women experience. Regional gender disparity in the workplace is vast, with only one woman participating in the labor force for around every four men.
Use inclusion commissions to drive more gender-inclusive workplaces
Governments and companies in the region can launch mechanisms to ensure women are well represented in the economy and society. Commissions can help women get equal access to social- and work-life opportunities and raise awareness to change mind-sets around women’s disproportionate unpaid care work burden. Additionally, new supportive legal frameworks would influence women’s decisions around entering and staying in the workforce.
Encourage more flexible work options
Introducing and supporting flexible work can alleviate around
of issues stopping women from participating in the labor force.
This helps women overcome challenges such as limited work-life balance policies, the inability to commute, and the lack of infrastructure or essential services at work.
60%
$1.9 trillion
Achieving workplace gender parity in the region would contribute
in additional economic output by 2040
5
Adopt a holistic approach to health
Despite their young populations, countries in the region are expected to face a rise in age- and lifestyle-related diseases. This trend will be partly driven by demographic shifts that, in mature economies, are already causing a surge in healthcare demand. It is also driven by the changing lifestyle habits of the region’s populations.
Adopt a “Health in All Policies” approach
Boost adoption of virtual health
Induct
more healthcare service professionals over the next 20 years
8 million
Health systems can create a sustainable healthcare workforce by establishing a recruitment pipeline, optimizing the distribution of tasks, and adopting new technologies to supplement healthcare resources.
Healthcare systems can adopt virtual health to boost the quality of care, reach more optimal efficiency levels, and realize positive fiscal benefits.
This requires at least three shifts in government
1) Develop an overarching health strategy and objectives.
2) Activate enabling mechanisms to support health in all policies.
3) Support cross-sector collaboration to implement policies and programs.
6
Rebuild conflict zones
Numerous geopolitical shifts and conflicts have impacted the region over the last two decades with significant humanitarian and economic consequences for its population. Several countries in the region are in or recovering from conflicts, the most prominent being the wars in Libya (2011–present), Syria (2011–present), Iraq (2003, 2014–2017), and Yemen (2015–present).
Seven game-changers could double the region’s economic output and create 100m+ jobs.
Creating opportunities for youth
impacts the region and the world
800,000
casualties
vulnerable people
43 million
refugees
9 million
internally displaced persons
12 million
Economic output in conflict countries dropped significantly post start of conflicts.
Economic output, $ billion
Source: IHS Global Market database
2002
2011
2010
2014
2017
Syria,
GDP, 2011 = 100
Iraq,
GDP, 2002 = 100
Libya,
GDP, 2010 = 100
Yemen,
GDP, 2014 = 100
200
150
100
50
Iraq
Libya
Syria
Yemen
–$15 Bn
Yemen
–42%
Syria
–60%
–$23.5 Bn
Libya
–$136 Bn
–84%
Total reconstruction costs have been estimated to be as high as
comparable to the per-capita foreign aid Western Europe received from the US after World War II. A regional recovery and development plan, funded by members from inside and outside the region, could be considered to aid the recovery of conflict zones in the region.
$800 billion,
Consider setting up a joint recovery fund and mechanism
However, for the region to initiate a comprehensive and effective reconstruction campaign, it must first consider several challenges including the geopolitical environment, construction fundraising, and weak investment institutions.
Since 2010, conflicts have cost the region approximately
$175 billion
7
Focus on performance and delivery
Countries with effective governance in place have a considerable advantage over their peers in the pursuit of economic growth. A government that enforces a high-quality and competitive operating environment and maintains stability for its citizens will find it easier to create a platform for the economy to thrive. A McKinsey report found a positive correlation between high-performing economies and their respective increases in most of the Worldwide Governance Indicators (WGI) between 1996 and 2018.
of countries rank in the bottom half of the World Bank’s World Governance indicators for government effectiveness.
60%
Governments could produce annual report cards to boost government effectiveness and accountability.
Annual reporting on progress and performance can enhance government effectiveness, legitimacy, and accountability. This initiative involves governments setting targets with respect to access, quality, and cost of services, and then producing a yearly report card to track performance. It can also improve the success rate of governments taking on different change efforts, pursuing large-scale improvements in performance, or revamping the delivery of their public services.
A reimagined region fit for the youth of today
MENAP is a region with significant promise, core to which is its vibrant and youthful population. Unlocking the true potential of the region’s youth would yield significant dividends for future generations. In this report we have compiled ideas that, put together, have the potential to turn the regional trajectory and secure a bright future for young people from Morocco to Pakistan.
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Across MENAP, the population aged 65+ will more than double over the next 20 years
70%
of countries spend less than half per capita on healthcare (PPP adjusted) relative to OECD averages
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