Digitization, Youth and the Future of Work in MENA: Inclusion in Challenging Times



Vulnerable communities

2021-05-06 19:20:30 2892 0

On November 24th at 4:00 pm (Cairo local time), the Access to Knowledge for Development Center ( A2K4D) hosted a webinar titled, “Women, Youth & the Future of Work: Inclusion in Challenging Times” in collaboration with Friedrich-Ebert- Stiftung (FES) Egypt. The webinar is part of A2KD’s 10th Annual Workshop, this year titled ‘Beyond COVID-19: Data, AI, and the Future of Work: Global Issues and Local Challenges’. This was an opportunity for us to bring together perspectives from the Global North and South to discuss what new emerging technologies and the pandemic mean- in terms of inclusion and the future of work- for youth and women. Panelists for this webinar were: Ahmed Abaza, Founder and Managing Partner at Synapse Analytics, Dr. Ayman Ismail, Associate Professor and Chair of Entrepreneurship at the American University in Cairo, Christina Kampmann, Member of State Parliament of North Rhine-Westphalia, and member of the Social Democratic Party of Germany, Dr. Nagla Rizk, Professor of Economics and Founding Director of the Access to Knowledge for Development Center and Nada Shousha, Regional Advisor to the International Finance Corporation. In this post we reflect on the challenges and opportunities for youth and the future of work in the Middle East and North Africa. Technological change transforms societies. This has been ongoing throughout history since the introduction of steam to mechanize production in 18th Century Britain. Today, we are experiencing, what Klaus Schwab coined in 2016, as the 4th Industrial Revolution. The 4th Industrial Revolution is a digital one and refers to digital technologies permeating across business processes, the ability to process and store large amounts of data, and the emergence of innovations such as artificial intelligence. It stands out from its predecessors because it is taking place at an unprecedented speed, thanks to advances in computing power, and is disruptive to all aspects of our economies and societies. While the Fourth Industrial revolution holds the promise of bettering human lives through new and more efficient opportunities for innovation, it also poses challenges for inclusion. All such challenges are amplified for youth, a group already facing multidimensional inequalities in the region. The COVID-19 pandemic has accelerated the timeline for impact and made many future anticipated outcomes of the fourth industrial revolution realities today. “We’re seeing the future of work realizing in the retail sector today. Fintech is starting to compete with banks in the financial sector. Healthcare is also being transformed digitally as we speak”, explains Ismail. Digitization coupled with the pandemic has put a strain on the already precarious situation youth face in the region, especially in terms of employment. Youth, defined as those between the ages of 15 and 29 make up 28 percent of MENA’s population, around 108 million people. MENA hosts the largest youth population in the world and has the world’s highest youth unemployment rate; 26.7% in 2019 according to the World Bank, double the world average of 13 %. The situation is not uniform across the region. In the Arab world’s most populous country, Egypt, youth unemployment stands at 30% as of June 2020. Recent estimates (2019) indicate diverse high rates in Palestine (40%), Saudi Arabia (29%), Jordan (37%), and Tunisia (35%). “Only in Qatar are youth unemployment rates lower than the world average (0.62%), due to its capacity to absorb young nationals into public sector jobs”. Unemployment of those at secondary school level education is at 35.5% in Egypt as of 2016 and 60% of the population is under the age of 30. Yet MENA’s young population holds promise and potential. Our speakers pointed out that youth are agile and have opportunities to shape, adapt, and innovate as the fourth industrial revolution plays out in the region. Abaza cites for example entrepreneurship in the digital field as an area of opportunity for youth in terms of sustainable employment with positive outcomes for society as a whole. Yet, with this massive cohort of youth entering the labor market in Egypt for example, access to job opportunities remains minimal. While digitization will create new opportunities for youth it will [ and already has, as a result of COVID-19] resulted in job losses. Youth in MENA also face additional barriers as a result of rampant informality. Informal employment is estimated to constitute over 60% of the MENA region’s labor force. Youth employment rates in the informal sector are as high as 80 percent in Palestine, Egypt, and Tunisia. While the informal economy has traditionally proven resilient in the face of external shocks, it has suffered under COVID-19. For youth to excel in the labor market and the entrepreneurial field, they require training to acquire new skills or to upgrade skills they have already learnt. Those still in education face outdated curricula, and given the pace of change, some are in fact studying for jobs that may be replaced once they graduate. This is further complicated by issues of access and connectivity, whereby just over half of the population in Egypt are connected to the internet (56%), meaning almost half are not. In a country of over 100 million, there are only 8.29 million ADSL subscriptions. In addition to obvious cost barriers, this is arguably an indicator of the quality of access youth are presented with to participate in the digital economy. In these challenging times and as we transition to a ‘new normal’, how can we harness the profound changes taking place to ensure they are more inclusive of the region’s youth and other vulnerable groups? Kampmann stressed that regulations must be designed to “achieve socioeconomic equality, not exacerbate it”. She pointed out that an equally pressing concern is relevant legislation to regulate data, to ensure that digitization is not causing “more harm than good” especially for groups such as youth and women. She also emphasized that those disenfranchised in our economies need to be at the center of inclusive policymaking. Kampmann’s sentiment echoes literature such as the EU commission’s AI report on the relationship between the fourth industrial revolution, inclusive development, and the future of work. The report highlights that while there is no definite answer in terms of the current wave of automation and its impact on work, policymaking is key to shaping the future possible scenarios with their positive and negative tendencies. The report also identifies labor market challenges, especially short-term transitions as the most pressing concern. Indeed, a 2018 report by Micknsey finds that 45% of jobs in six MENA economies: Bahrain, Egypt, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates are automatable now. This varies depending on the educational background of employees, with those holding higher degrees less likely to lose their jobs to automation. Yet the report points out that 57% of the workforce in these 6 MENA economies lies in the two groups that have either only a high school degree or less. This means that almost 60% of the workforce in these countries faces almost a 50% chance of losing their job to automation. This is in addition to staggering youth unemployment and unemployment of the educated. Education, enhancing human capital, and inclusive policymaking especially in the areas of regulating new technologies and data are three axes for action that our panelists agreed on. Curricula need to be upgraded to include data science, digital literacy, and core entrepreneurial skills across all areas of study. This should be guided by the notion that given the rapid pace of technological change, the jobs that many of those studying today are poised to take on, are not yet known. Abaza and Ismail emphasized that infusing all areas of study with the necessary knowledge of digital skills and critical thinking to be successful producers and innovators, and not just users of technology, is key. Those already in the workforce are in urgent need of re-skilling and skills upgrades to suit ever-changing market demands, pointed out Rizk. For many informal workers in Egypt for example, this may mean learning to use digital intermediation platforms to find work- this extends beyond those who find work in ride-sharing, to include for example plumbers or domestic workers. The impact of the pandemic has been especially harsh for informal workers, who often earn a daily wage with no safety nets in place should their work be at risk. For those with higher degrees, it involves promoting a culture of lifelong learning and upgrading their technical skills. Indeed, while youth in countries such as Tunisia engaged in the communication technologies field have turned to self-learning via online courses this may not be possible for others in the region who face barriers such as limited, costly internet access. A more concerted effort is needed on a governmental and civil society level. Rizk pointed out that “collaborative, agile policy changes with the objectives of reskilling and upskilling current members of the workforce in addition to increasing the opportunities for participation of marginalized groups, are necessary”. In the immediate term, accessibility to digitized education needs to be improved. Policies must be designed to support new forms of work and to regulate new technologies to ensure they are inclusive.The pandemic has further accentuated the need to recognize what Rizk terms as the “digital informal economy” in Egypt, as an engine for work opportunities, especially for youth. She emphasized that grounds up solutions, involving youth as key stakeholders, are needed to ensure this space is more accessible and incentivized. It needs support and not blanket regulation and formalization to flourish. Our panelists concluded that the key is for stakeholders to work towards actively creating opportunities with youth and other marginalized groups in mind, in today’s new normal. This entails managing the current transition via safety nets and immediate relief but also gearing up for more medium and long-term collaborative efforts for inclusion in education, in the labor market via incentivizing the public sector and in regulations. A key example in a positive direction is Egypt’s national AI strategy, which prioritizes inclusion and sustainable development across the board.