Commentary

It’s skills, not jobs

It’s skills, not jobs

(This post is part of a wider Horizon Scanning piece. To get full access, please register here or call +971 4 425 7967.)

The challenge in the GCC regarding nationals’ employment has never been an issue of availability of jobs. In fact, in most countries there are more jobs than national job seekers (by far). However, when it comes to employment, the large majority of GCC nationals work in the public sector. Put simply, they prefer public sector jobs usually because of higher pay, less working hours, and much higher job security.

Although jobs are opening in the private sector, the majority of competitive private sector positions are going to expatriates. The figure below shows how challenging this issue is. Not only are jobs available, more will be created in the coming decade. In the past few decades, GCC countries have looked to diversify their economies, relying less on oil and growing other industries. These policies so far have been marginally successful. Albeit starting from a low base, the growth of non-hydrocarbon sectors has matched those of other oil exporting countries with advanced economies2. The sectors that contributed the most were manufacturing, construction, transportation, and the financial sector.

In this context, the GCC Governments have released various national strategies; UAE 2021, Qatar 2030, Saudi 2030, and so on. Aggregating these strategies, we have narrowed down a list of sectors that contain the biggest potential for future growth in the GCC. First, because of the commitment from the governments to leverage these sectors moving forward and secondly, because of historical government capital expenditure evidence:

  • Energy and Petrochemicals
  • Manufacturing
  • Financial Services
  • Travel, Tourism, and Hospitality
  • Trade and Logistics
  • Technology, Media and Communications (TMC)

As the GCC economies grow, more jobs will be opening up across these six sectors and high skilled work will be increasingly in demand. A McKinsey 2012 report estimates individuals with skills in engineering, research and development, product design and marketing will be the most in-demand in industry sectors like manufacturing, energy, and TMC.

This is an excerpt from a Horizon Scanning entry titled “The Problem Is Skills, Not Jobs: Nationalization in the GCC”. To get full access, please register here or call +971 4 425 7967.