Smarts and Skills To Help Build Their Communities

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How Teen Girls are Leading Their Own Revolution

Many articles have been written on the importance of including youth and women in national development and employment strategies in the Middle East and North Africa (MENA). Despite all good intentions, however, women are still a small percentage of the labor force in Arab countries, and government programs are skewed towards young men because they are considered a priority as lifelong earners while women face the challenge, if they choose, of balancing work and families.

Successive US Administrations have made women’s empowerment, employment, and education a priority in foreign assistance programming. Unfortunately, the aftermath of the Arab Spring has not been friendly to women’s empowerment and youth enfranchisement, with few exceptions. One of them is Morocco.

Fifteen years after King Mohammed VI delivered a speech – soon after acceding to the throne – calling for extensive reforms to promote the role of women in society, the country’s commitment is continually being tested and progressing. And the US government is helping by funding programs for youth, with a strong emphasis on inclusion. One such program has just concluded in Washington, DC, and I was fortunate to meet with the group on their last day.

The program is TechGirls, “a U.S. Department of State initiative, which is an international exchange program designed to inspire and empower girls from the Middle East and North Africa to pursue deeper levels of training in technology through hands-on skills development,” as part of America’s continuing commitment to advance the rights of women and girls around the world. The program’s manager, since 2012, is Legacy International, which has been managing cultural exchange programs for 30 years.

According to Mary Helwig, VP of Legacy International, “While in the United States, TechGirls participate in an interactive technology and computer camp, join a tech company for a day of job shadowing, and participate in community service initiatives.” This year’s cohort included young women from seven Arab countries, and their energy and vision are great antidotes to the feelings of frustration with the lack of progress in the region.

We talked about entrepreneurship and what they want from their governments – mostly to provide the necessary eco-system of legal, financial, training, and incubating services – and how their experiences in the US gave them ideas about how to take initiatives when they return home.

 Moroccan Voices

techgirls3It should come as no surprise that the TechGirls are avid bloggers, tweeters, and Facebook users. #TechGirls provides hourly tweets of their daily activities and daily Facebook postings filled with pictures and narrative. They were able to pursue their interests in technology and community service during many of the program’s activities. On their last evening, they visited with Girls Who Code DC and General Assembly, a meeting that brought together the 27 MENA participants with 30 young women from DC who share their passion for technology.

The program involved quite a wide variety of projects. For example, they started with a traditional summer camp experience at Global Youth Village, visited Virginia Tech University for an orientation to STEM programs, and spending a day on community projects after visiting Goodwill Industries in Roanoke.

The four Moroccan participants were Amina Abou Ali (16), who wants to take her experiences back home and motivate other young women to embrace technology; 17 year-old Karima Lakouz, who plans to use her interest in technology as a driving force to help close the gender gap in engineering and technology; Khadija Chaibi (17), who will start a club at her school that will offer weekly classes to better inform her peers who might otherwise be illiterate in information technology; and 16 year-old Rihab Boutadghart, who wants to be a doctor because the area where she lives lacks medical services, and who hopes to use her medical and technology skills to develop medical materials to help people.

They all were engaging, unafraid to speak their minds, clear in their interests in serving their communities, and encouraged by the many new friends they had made both within the group and in the US. One of their most satisfying experiences was to get to know Americans beyond media stereotypes and to appreciate the diversity and hospitality they found here. In turn, they were interested in learning more about American perceptions of Morocco and its society.

To really get a sense of how the US is making very important investments in the youth of the MENA region, particularly those who have acquired English language skills and are grounded in technology, I encourage you to visit them on Facebook and experience US foreign assistance dollars well spent with young women who will change their communities.

Bridging US-Morocco Entrepreneurship

Portland State University Alum Working on Partnership with the University of Marrakech

Ahmed Abidine is a global-minded millennial Moroccan with a strong sense of social entrepreneurism. Over the past year, while working on his advanced degree at Portland State University’s (PSU) School of Business, he won the school’s Pitch Fest for the best presentation by a social entrepreneur. A public event, the audience also participates in the judging, which makes the award even more impressive.

His winning project is both entrepreneurial and beneficial to the community. Ahmed was inspired by his leather-working grandfather and designer/seamstress/teacher mother to create, design, and manufacture a line of handmade luxury handbags. What is quite special is that he has a production partnership with Morocco’s Deaf Artisan Group of Marrakech that offers deaf people training and education to become self-sufficient. Ahmed told me that his solution addresses two challenges for Moroccan handicraft projects to be competitive: attaining sufficient quality for global sales and education and training for the craftsmen/women.

So through this project he does both – create a viable product while raising the skills of the workforce. But it is not an easy path. It took two years, working with the Chamber of Moroccan Artisans where a friend was studying the sustainability of Morocco’s leather industry for his Master’s degree, which brought Ahmed to the University of Cadi Ayyad (UCA).  His top priority now is linking a new program on international entrepreneurship and business exchange between PSU and the University, which is located in his hometown of Marrakech.

Next for the PSU-Morocco Partnership

Social entrepreneur and business start-up

Social entrepreneur and business start-up

Ahmed is keen to promote entrepreneurship in Morocco. He told me that there are hundreds of young people at the University and in Marrakech who are actively engaged in trying to build businesses that can mean employment for the country’s youth. He said that “the seeds have been planted but have not been harvested,” due to a lack of access to financing and support for the entrepreneurial spirit. This is why the proposed joint program is so important. He found a willing counterpart in Professor Abdelaziz Baçaoui who heads the incubator and entrepreneurship program at UAC.

“Entrepreneurs are about creating solutions – not sitting in a classroom and letting someone else take the initiatives,” Ahmed stated. He believes that a lot can be done by bringing coaches and mentors from PSU to meet with the counterparts and students and share knowledge about building research and business cases in support of entrepreneurs, including changes to curricula, how to maximize the impact of an incubator, and what would a long term partnership involve.

The PSU-UCA “international entrepreneurship and business exchange” will be launched on Friday, March 20 and sessions will continue through Sunday, March 22. The goals of the event include exploring opportunities for bilateral trade and investment, establishing academic exchange programs between the schools, setting up the Marrakech Center for Innovation and Entrepreneurship, and strengthening the start up community in Marrakech through, among other efforts, encouraging exchanges between entrepreneurs in Morocco and the US.

The program has three components. The first day will feature presentations from both sides on their respective start up communities, followed by an exploration of the growth industries for trade and investment. The second day will focus on building and rehearsing pitches to be made by Moroccan entrepreneurs to the coaches from Morocco and the US. On the final day, the teams will make their presentations and awards will be made to the winning teams.

Marrakech is certainly a vibrant city with scores of businesses yet to be developed by entrepreneurs who see opportunities where others see challenges. As Ahmed says, there is a long way to go but this event has the potential to catalyze into an annual program of international scope. A number of private and public sponsors from the US and Morocco have signed on as partners and this should enable this innovative project the lift it needs to become a sustainable event.

Message from the King of Morocco: Knowledge is the Only Resource Whose Value Increases When it is Shared

US and Morocco Sound Strong Support for Global Entrepreneurship

The fifth Global Entrepreneurship Summit kicked off this week with a meeting between Vice President Joseph Biden and King Mohammed VI and opening remarks by Secretary of Commerce Penny Pritzker at the Summit’s Women’s Entrepreneurship Day event. Held in a special tented facility in Marrakech, the Summit, which seeks to promote greater support and resources for entrepreneurs, especially in Muslim-majority countries, has brought together more than 3,000 private and public sector participants.

In an article in the Washington Post, Vice President Biden was quoted as saying, “The secret people don’t know is that our diversity is the reason for our incredible strength. But the world and the United States will be more peaceful and prosperous, when the brightest, the most innovative, the greatest risk takers believe they can reach their potential at home.” He went on to add that every country should understand the benefits of supporting entrepreneurship broadly, for men and women, as both a boon for economic development and an effective tool in combating radicalism and extremism.

Commerce Secretary Penny Pritzker at the Global Entrepreneurship Summit

Commerce Secretary Penny Pritzker at the Global Entrepreneurship Summit

Secretary Pritzker, speaking to more than 300 women on the opening day, reflected on her own business experience and on the necessity of building holistic support systems for all entrepreneurs. “I must say that I am so inspired by the women at this summit – all of you. Your dynamism; your fearlessness; your courage to not only enter the workforce, but to start a business is so inspiring to me. Your appetite for risk, your vision for your companies, and, indeed, your vision for your societies, comprise the very definition of the entrepreneurial spirit.”

She noted that innovation and entrepreneurism have been central to the growth of the US economy and that one of her priorities is to share lessons learned globally. “The opportunity for business creators to thrive is the foundation for a rising middle class, for security and stability, and for broad based prosperity.”

Reflecting on the themes of inclusive and sustainable growth, the Secretary pointed out that “Societies can only reach their full economic potential if they tap into 100 percent of their talent pool. That means embracing the ideas and aspirations of our youth. That means enabling women to get a good education and secure the capital needed to start their own companies. That means allowing women to dictate their own futures. That means empowering you – and all women entrepreneurs. When women entrepreneurs take risks and succeed, societies change for the better.”

King Mohammed VI Underlines Morocco’s Commitment to Innovation and Entrepreneurism

In his address at the opening of the Summit, King Mohammed VI spoke quite forcefully about the benefits of promoting innovation and entrepreneurism.

“In keeping with its core values and basic principles, Morocco believes wholeheartedly in the Summit’s objectives. It has been devoting its energies to promoting human and sustainable development and investing in entrepreneurship. My country also encourages the sharing of expertise and know-how and maximizing the complementary strengths of all parties, particularly between the countries of the South.”

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After summarizing Morocco’s commitment to regional development, the King embraced the notion that being an entrepreneur is not a function of luck but requires much more. “One is not born an entrepreneur; one becomes an entrepreneur by embarking on the road to success in an interactive process involving hard work, learning and a capacity to deal with challenges. Entrepreneurs are people who challenge the established order and the status quo. They do not hesitate to respond – at their own level – to needs that are yet to be identified, that are unmet or that are new.”

Reflecting on Morocco’s challenges to accelerate economic growth, the King tied together the notions of social and human development with the role of entrepreneurs. “Entrepreneurship and innovation are twin values; they are both springboards for freedom, social mobility and prosperity, provided the business environment is favorable and the required conditions are met.” He restated Morocco’s commitment to working with the private sector to promote a favorable environment for business to thrive and expressed his belief that it all begins with adequate education.

“Education is an essential step, a prerequisite for the maturation process that leads people to think critically and to hone their skills so that they are able to seize an economic, technological or social opportunity when they see one. Therefore, it is up to us to provide future generations with an education that goes beyond the mere ‘accumulation-transmission’ process in order to develop creativity, responsiveness and inventiveness.”

The King sees how all of these ingredients – education, innovation, entrepreneurship, creativity – have vital implications for Africa and beyond. “To overcome the pessimism that has plagued our continent, our governments should instill self-confidence in our young people so that they can believe in their ability to learn and to become entrepreneurs. To this end, we need to nurture positive examples and turn success stories into models to emulate. The same applies to female entrepreneurship, which holds so much promise for our economies and our societies that we all need to encourage it; otherwise, we will be depriving ourselves of a huge potential.”

The value of entrepreneurship in achieving sustainable and inclusive growth is relevant in the context of Morocco’s aspirations, as well as those of young people across the globe. “We must not confuse technological innovation with technical sophistication. The so-called low-tech innovations – just like more sophisticated technologies – can help us meet specific needs, especially in developing countries. Innovations of this kind are often helpful in terms of supporting social development and improving the well-being of the population.”

As the Summit proceeds, there are special sessions focused on innovators from Africa, women, successful entrepreneurs sharing their stories and offer support, as well as experts in finance, marketing, business plan development, and the other elements of the entrepreneurship eco-system. It is an opportunity to go beyond showcasing what has been done to investing in future entrepreneurs who can change the business face of many countries.

Morocco Continues Growth on Strong Economic Fundamentals

Will it be enough to provide needed jobs, improve GDP performance?

During the past week, several reports and interviews provided insights into Morocco’s economic performance, including challenges and strategies to expanding opportunities for growth. An article in the Business Standard noted an interview with World Bank Managing Director for Finance, Bertrand Badre, who said that “Morocco showed great institutional and economic stability amid the turmoil that has been going on over the past few years regionally.” He was referring to the financial meltdown of 2007-2008, resulting in a continued global slowdown, as well as the Arab Spring.

The article mentioned that “Badre also highlighted the construction of infrastructure and the advanced urbanization taking place in Morocco, which are ‘very important’ for the World Bank because of Morocco’s pivotal role in the West African and sub-Saharan region.” He also noted that the country must do more to diversify its economy to create more centers for growth and enable more stakeholders to participate in the formal economy. The reporter concluded that “Besides its macroeconomic, institutional, and economic stability, Morocco has an asset of location in the crossroads of sub-Saharan Africa and Europe, in addition to openness on the Atlantic.”

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Another look at Morocco’s performance came from Fitch Outlook, the ratings agency. Under the headline “Fitch confirms Morocco’s Investment Grade with Stable Outlook,” Morocco’s state news agency reported that Morocco’s grade remained stable as a result of its “macroeconomic stability in an unstable international and regional environment and the resilience of GDP growth, despite a drop in the foreign demand of Europe.”

Once again, Morocco received recognition for its ongoing efforts to decrease its budget deficit, due to controls on current expenditures, reductions in subsidies, falling energy costs, “the consolidation of public finances, acceleration of exports by new industrial sectors, and improvement in the overall” business environment.

Strong Economic Medicine while Forward-leaning into Africa

Morocco’s exception to the tumult in the region was also noted in a Financial Times interview with Finance Minister Mohamed Boussaid. “Good news is a rare commodity in the Arab world these days. Violence is raging across Syria and Iraq, Egypt has retrenched into authoritarianism and Libya is in chaos. Even Tunisia, which is managing its transition to democracy with aplomb, is facing huge economic challenges. But in the far west corner of North Africa, Morocco has so far been spared much of the pain of the last four years.”

Morocco has managed to reduce its fiscal deficit from 7.4 percent of GDP in 2012 to 5.5 percent by the following year, “and remains on target for further reduction this year, as Rabat slashes subsidies and reforms its economy. The country’s economic and political stability – rare commodities in the region – have already brought returns. Tourists numbers were up by 7 per cent in 2013 as many Europeans, scared off by the unrest in Egypt and Tunisia, traveled instead to Morocco.”

blog growth 2The article went on to note the growth of automotive manufacturing and the positive response to the government’s “€1bn Eurobond – its first euro-denominated bond in four years,” as additional indicators of Morocco’s success. While the rest of the Arab world, racked by falling oil prices and increasing instability due to the impact of the conflicts in Syria, Iraq, Yemen, and their spillover to neighboring countries, “Many analysts predict Morocco will be North Africa’s best performing economy in coming years. Although growth slowed slightly this year because of low agricultural yields and weak growth in Europe – Morocco’s main export market — the International Monetary Fund (IMF) estimates GDP will grow at around 4.7 percent in 2015.”

Boussaid credits this success to “reforms begun more than a decade ago, including investment in major infrastructure projects and programmes for industry and renewables, particularly solar energy.” The minister also talked at length about Morocco’s partnership strategy in sub-Saharan Africa. Its goal is to become “a platform for production and export to African countries through Casablanca Finance City (CFC), a new regional finance hub.”

More than 60 multinational banks, insurance companies, professional and legal services, private equity, and asset management companies have signed up for offices in the CFC. Already headquarters for the African Development Bank’s new $3bn Africa50 Fund that will finance infrastructure on the continent, CFC hopes that up to 100 companies will be based in its special zone.

Still Tough Going Ahead

While the IMF has projected healthy growth for Morocco in 2015, the outlook for the rest of the region is not as positive, according to Marketwatch. Regional instability coupled with the continued weakness is the global economic system, are a drag on economic expansion, and Morocco feels this impact directly.

“One major contributor to recent socioeconomic ills has been double-digit unemployment rates in many Middle Eastern countries. But the IMF’s baseline gross domestic product growth projections aren’t high enough to reduce unemployment in a meaningful way, it said. Unemployment is of special concern among oil importers such as Egypt, Jordan, Morocco and Tunisia, which have some of the highest jobless rates in the region, especially among young people.”

The government has implemented a broad range of incentives to encourage agencies and investors to accelerate the pace of training and education to align workers’ skills with market needs. Yet the slowdown in FDI and the need to increase domestic private investment are constraining opportunities for job growth. “To solve the jobs riddle, Middle Eastern countries needed ‘deep, multifaceted transformation’ that buttressed the private sector and raised living standards. The region needs sustained, stronger and more inclusive growth to markedly reduce unemployment–a critical issue facing nearly all countries in the region,” said Masood Ahmed, IMF’s Director of the Middle East and Central Asia Department.

To maintain its momentum, Morocco is implementing a multifaceted growth strategy that focuses both on key sectors and driving job growth. It is tackling government policies and regulations to maximize flexibility in labor markets, property ownership, and public expenditures so that the private sector and people of Morocco have access to resources needed to expand economic opportunities and build a healthy, sustainable, and inclusive job market.

Morocco Strengthens Its Case as Gateway to Africa

As US-Africa Leaders Summit Concludes, Focus on Security and Governance Gathers Momentum

The US-African Leaders Summit closed yesterday with President Obama promoting his vision of partnership between the US and Africa. At the morning press conference on Wednesday, August 6, he said that “Africa’s rise means opportunity for all of us—including the opportunity to transform the relationship between the United States and Africa…a partnership of equals that focuses on African capacity to solve problems, and on Africa’s capacity to grow.”

Obama Speaks on Need for New Partnerships

Obama Speaks on Need for New Partnerships

This resurgent message on African solutions to African challenges echoes remarks by King Mohammed VI at a business forum in Ivory Coast this year. They have become a core message for how Africa, made up of 54 countries that do only 12 percent of their trade among themselves, should advance locally, regionally, and internationally.

The President noted the clear purpose of the Summit. “We are here to take action—concrete steps to build on Africa’s progress and forge the partnerships of equals that we seek; tangible steps to deliver more prosperity, more security, and more justice to our citizens.” The Summit sessions on peace and security, youth empowerment, trade and investment enhancement, and good governance produced recommendations and proposals that will serve as the US agenda with Africa through the end of this administration. How this will play out in the coming months was the topic of meetings, think tank programs, and media events occurring throughout the week.

Security, governance, and trade and investment challenges dominated the agendas of most of the public events. From the Corporate Council on Africa and the Africa Center at the Atlantic Council to the Center for Strategic and International Studies (CSIS) and the Africa Growth Initiative at Brookings, among others, events emphasized stronger business ties, changing perceptions, and enhanced security cooperation. The Initiative for Global Development premiered a multi-part video series on Investing in Africa dealing with issues of misperception and understanding the business environment. And the Atlantic Council’s Africa Center hosted two events: the first focusing on the release of a paper on Morocco’s role as a gateway to Africa and the second, a panel exploring how to develop sustainable African solutions to security challenges in West Africa.

What is the Bottom line?

In his closing press conference, President Obama reflected on the discussions held during the day. “We agreed that Africa’s growth depends, first and foremost, on continued reforms in Africa by Africans.” This theme was repeated several times, as corruption, lack of opportunity, marginalization of women and youth, and lack of reforms were mentioned as barriers to a healthy and prosperous Africa. The President made reference to commitments by leaders to “pursue reforms that attract investment, reduce barriers that stifle trade…and to promote regional integration.” There will also be an “action plan to promote the transparency that is essential to economic growth.”

Dr. Ahmed Abaddi speaks on the need for integrated efforts to combat extremism

Dr. Ahmed Abaddi speaks on the need for integrated efforts to combat extremism

The US announced several cooperative initiatives to support young entrepreneurs and empower women across Africa a well as a New Alliance for Food Security and Nutrition that “aims at lifting 50 million Africans from poverty.”

On the security front, the US is launching a “new Security Governance Initiative” to train self-sufficient security forces beginning with six countries, and a “new effort [in West Africa] to bolster the region’s early warning and response network and increase their ability to share information about emerging crises.”

Interestingly, Obama said that there was agreement that the Summit would be a recurring event, while some pundits question if this effort will survive his administration. In the post-Summit press conference, it should be no surprise that there was only one question related to the outcomes of the Summit, as political events elsewhere dominated queries from the media.

How Does Morocco Measure Up?

Prime Minister Abdel-ilah Benkiran lead the Moroccan delegation

Prime Minister Abdel-ilah Benkiran lead the Moroccan delegation

The Moroccan delegation worked hard during this visit to raise the visibility of Morocco’s Africa agenda among US and African policy makers and businesses. Throughout the three days of meetings, programs, and events, Morocco demonstrated that it is in fact part of the solution to moving Africa ahead. On the issue of reforms, Morocco continues to work to make its emerging parliamentary democracy an effective vehicle for implementing the reform agenda in the 2011 Constitution. As regionalization brings more decision-making power to local citizens and their public officials, as civil society is strengthened through more consolidation and access to resources, and as greater respect and protection of human rights is promoted through the realization of reform programs, Morocco’s “best practices” provide examples for others to consider.

With respect to trade and investment promotion, encouraging entrepreneurism, and supporting job creating functions in the informal economy, Morocco is making good headway. The Casablanca Finance City, continuing capital reforms, energized Casablanca Stock Exchange, networks of banking, telecoms, transportation, and IT services throughout west, central, and Atlantic Africa countries, and expanding efforts to build sustainable solutions for youth and women employment, are signs that it is headed in the right directions.

Obama pledges to make the Summit a regular feature of US-Africa relations

Obama pledges to make the Summit a regular feature of US-Africa relations

Morocco’s push for enhanced regional cooperation is strengthened by more than 50 preferential trade agreements with key markets in Africa, Europe, and the Middle East. It provides scholarships for African students in Morocco; supports training for men and women engaged in religious activities to promote moderate and harmonious Islamic practices; has extensive ties for security training and cooperation; and works at the UN and other forums to encourage stability, cooperation, and justice.

On Thursday, the US and Morocco signed a bilateral “Framework for Cooperation on Training for Civilian Security Services,” which will enable the two parties to “develop mutual expertise in the areas of crisis management, border security, and terrorism investigations.” The agreement will enable Morocco to develop its training expertise for civilian security and counterterrorism training throughout the region.

According to Morocco’s delegation, their time this week in Washington, DC was well spent, as it was for the other African participants, confronting US perceptions that continued to divide Africa up according to stereotypes based on out-dated notions of race and geography. Morocco and emerging Africa want to be recognized for their aspirations and their achievements. The Summit programs made it clear that this can be a concrete opportunity for the US to rebuild its foreign policy successes around shared values and notions of respect, opportunity, and dignity.

If you want to create jobs in the Maghreb, enable entrepreneurs

Latest Wamda survey results highlight obstacles to growing companies

In the coming months, I’ll continue to write about issues related to strategies for economic growth in the Maghreb and youth employment in particular. These topics are particularly challenging because jobs, equality, and dignity are themes still resonating negatively after the Arab uprisings, as there has been little progress in addressing these issues. While there are many structural concerns that impact job growth, ranging from broadband availability, logistics and distribution facilities to legal and regulatory regimes, and political risk, there are substantive issues as well.

Wamda report cover

Wamda Research Lab report on barriers to scaling up entrepreneurs

Among the most pressing is identifying core sectors of opportunity for investments that would result in large-scale job creation. This is a critical concern because foreign direct investment (FDI) usually targets multimillion dollar projects that, aside from tourism and shopping malls, are more capital than labor intensive, limiting their net impact on job creation. And in the Maghreb countries, agricultural labor still is the dominant sector for employment, which is both seasonal and outside the usual government social services schemes. Thus, there is a need to fill the gap between small concerns, which are usually in the informal sector, and the large corporations, where jobs depend on skilled applicants.

In developed countries, small and medium-sized enterprises (SMEs) generate 60 to 70 percent of jobs. According to The next step – breaking barriers to scale for MENA’s entrepreneurs, a recent report from Wamda Research Lab, in the Middle East and North Africa (MENA), SMEs, constitute a majority of enterprises [approximately 80-90 percent], yet account for an average of 30 percent of private sector employment and 4 to 16 percent of total employment.” This more limited role for SMEs as job creators in the MENA highlights two negative outcomes: the high level of public sector salaries distorting the overall labor market and share of national budgets, and the scale of the challenges facing the private sector in growing employment when SMEs are quite small in scale.

Building up the “middle”

IMF Managing Director Christine LaGarde recently said in a speech in Morocco, “Strengthening the economic middle means giving a shot in the arm to small- and medium-sized enterprises (SMEs) in the formal sector. These are the kinds of firms that form the backbone of a healthy economy, and— in other regions of the world—are the main engines of job creation.”

The Wamda report takes up this theme and surveyed more than 900 entrepreneurs and experts on “the barriers to scaling up” faced by existing firms with a track record of growth.

Their results focused on four priority areas to enable expansion and job creation:

  • Increasing revenues through better marketing, market access, and market education for consumers and entrepreneurs to drive demand for products and services.
  • Boosting investment while improving communications between investors and entrepreneurs.
  • Attracting talent through improvements in the educational system and robust employee benefits.
  • Facilitating expansion across borders by reducing legal barriers and costs and identification of strategic partners.

The report concluded that “To achieve the maximum impact on job creation, the region’s entrepreneurship ecosystem must reduce the barriers to scale for entrepreneurs. A multi-stakeholder approach is needed across the ecosystem if these barriers are to be effectively addressed.”

Women entrepreneur

Less than 15 percent of entrepreneurs in study are women

This emphasis on the private sector driving job growth is consistent among stakeholders, including the World Bank, IMF, EU, UNDP, and others. All parties point to the requirement for a viable, sustainable ecosystem of institutions that supports the training, mentoring, incubation, and other services needed to support entrepreneurs. While these have expanded rapidly in the past ten years to more than 140 in MENA, resources available for scaling existing companies to grow successfully are not yet sufficient. Among the entrepreneurs surveyed in the Wamda report, “roughly 60% say that scaling is the most challenging development phase for entrepreneurs in the region.” For successful start-ups to become job creators, much more must be done by all stakeholders to enable and promote scaling.

Strategies for successful scaling

It is instructive to review the profiles of the participants in the Wamda survey, as they characterize entrepreneurs throughout the region and provide insights into how to support their initiatives. For example, almost three-quarters of those surveyed have either studied or worked abroad. Women make up less than one quarter of the founders of the companies surveyed. And personal savings were the source of initial investments for close to three-quarters of the group while financing from friends and families made up 43 percent of funding sources. This poses several types of challenges: how to engage women more effectively, how to engage the diaspora and reverse brain-drain, and how to make better financing options available from banks and private investors.

Exponential growth in technologies creates demand for highly skilled personnel

Exponential growth in technologies creates demand for highly skilled personnel

Among the entrepreneurs and experts interviewed, “entrepreneurs experience difficulties understanding marketing strategies for the countries they seek to enter, and face challenges acquiring marketing talent to execute their strategies…entrepreneurs need to determine proper market fit for their products and services.” This lends support to the need for broadening regional exchanges that link together entrepreneurs across markets to increase access to market awareness and skilled human resources. In fact, “The majority (63%) of entrepreneurs in our sample state that finding talent is their biggest challenge to building a team.”

In terms of investment, a third of the respondents noted the “small supply of venture funding was a primary challenge… [and] investors not offering enough value beyond cash.” This is a common affliction of growing firms once the start-up capital is exhausted. Perhaps a beneficial role for international and bilateral technical assistance should focus on mobilizing local capital for local firms that demonstrate a clear and well-defined business plan for regional markets. Linking these across borders would address the skills, markets, and investments challenges.

As the Wamda report explains – a view shared by many others — “Economic and social prosperity in the MENA region cannot be achieved without widespread and sustainable job creation. Entrepreneurs are critical to these efforts, yet in order for them to contribute meaningfully to the region’s employment agenda and foster thriving societies, they must be able to scale their companies.”

Progress is being made as governments develop a range of strategies to promote entrepreneurs and their efforts. For example, the report points out that “…Morocco eliminated the minimum capital requirement for limited liability companies in 2013. That decision, along with the institution of several banking reforms over the past several years, have made Morocco one of the most friendly countries for SME lending in MENA.” Only through a concerted and long-term program to support entrepreneurs across a range of sectors through multiple stages of growth will job creation achieve the levels needed to meet skilled labor supply and job demand.

Can Community Colleges Play a Role in Closing the Skills Gap in the Maghreb?

Specialists’ Delegations Find Similar Issues in US and Maghreb

In December 2010, as part of its program Partners for a New Beginning (PNB), The Aspen Institute, with State Department funding, launched the North Africa Partnership for Economic Opportunity (NAPEO). One of its core efforts is a focus on youth employment and related issues of leadership and entrepreneurism. Over the past three years, delegations have visited Algeria, Libya, Morocco, and Tunisia to have a first-hand look at conditions on the ground, where they were teamed with local partner organizations to assess what “best practices” might be shared to encourage job growth. A goal of NAPEO is to foster the growth of private-public-NGO partnerships to advance economic and human development.

NAPEO - PNB

NAPEO – building private-public-civil society partnerships for economic growth

The latest delegation consisted of US community college leaders who met with their counterparts in higher education, vocational and technical training, and business communities. Last week, delegation members met in Washington, DC to discuss their findings and continue a dialogue on options for collaboration and sustainable solutions. In addition, two members wrote blogs in The Aspen Institute space on the HuffPost (Huffington Post) recounting their experiences.

What was particularly striking about the comments of these skilled educators, who were visiting the Maghreb for the first time, were the similar challenges faced by the Americans and their counterparts. For example, the mismatch between education and workplace skills and the need to integrate soft and content/technical skills within programs were consistent themes for both Americans and Arabs. It was pointed out that 60 percent of Americans attend higher education institutions but only 30 percent graduate, which puts a lot of pressure on students to acquire marketable skills for whatever time they invest. Although the percentages for higher-education participation are much smaller in North Africa, the need for being job-ready is equally critical, as the unemployment rate among young people and women exceeds 25 percent across the region.

The Maghreb Mission – Learning for Employment

The expert panel was kicked off by Josh Wyner, Executive Director of The Aspen Institute’s College Excellence Program. He noted that there are two million unfilled jobs in the US due to the lack of skilled applicants, a situation not dissimilar to that in the Maghreb. He was struck during his visit by the opportunities to work in collaboration on common challenges, such as involving companies in shaping education programs that address market needs.

In her comments, Kathryn Mannes, Senior VP for Workforce and Economic Development at the American Association of Community Colleges, noted that the high degree of centralization in Arab education may inhibit local stakeholders from collaborating in education/training programs that serve local industries. She also mentioned that there is a perception that workforce development — acquiring technical skills while in college or university — is not well regarded in the Maghreb.

community colleges Maghreb

Blog on community college experts visit to the Maghreb

Dr. Richard Haney, Vice President for Educational Affairs at the College of Lake County in Grayslake, IL, in his HuffPost blog, mentioned three particular areas for improvement raised by their Arab counterparts: “their ability to train and educate a labor market with skills that are aligned with their local economies…developing the skills and talents of educators…[and] they lacked the basic instructional equipment and technology needed to provide students with the skills required.”

Eamonn Gearon, co-founder and Managing Director of the SIWA Group, which for more than 20 years has been advising clients in the MENA region on operational issues, cautioned that the centralized system is deeply rooted in society and often gives the impression that little can be done rapidly to bring about change. Mr. Gearon noted that lack of data was a major impediment to business relationships, as companies and governments are reluctant to share information that may be seen as proprietary or critical. He pointed out that there is a great deal of dynamism at the sub-state level where decision-makers are much closer to their constituents.

The need for changing local perceptions about work, learning, jobs, and careers was also mentioned by several of the speakers in the context of building constituencies and stakeholders for better educational outcomes. Russell Beard, VP of Information Resources and CIO at Bellevue College, pointed out that attitudes toward work are shaped by experiences in the educational system and that building strong ties with industry will give students a better grasp of how education affects their employability. In his HuffPost blog, Mr. Beard wrote about how the visit to the region affected him. “Seven days that would change my life, shake everything I know and open my eyes to the incredible beautiful world around us…I began to understand that their problems were not that different from ours.”

The Learning Agenda

The reciprocal benefits of international educational exchange

The reciprocal benefits of international educational exchange

The program concluded with a lively exchange as the audience expressed their opinions about how to best address four key issues: the benefits and drawbacks of centralization, ranging from more efficient use of resources to not addressing needs of local employers; challenges of integrating work skills and curriculum content to balance the goal of employability with the proven value of soft skills; the role of US institutions as both an adviser regarding “best practices” and as a recipient of alternative solutions that could enable US higher education to become more effective as a multi-cultural learning environment; and integrating stakeholders into the process of education/training, from curriculum to certification.

The delegation was impressed by the optimism and hope expressed by their contacts throughout the Maghreb. And their counterparts are strongly impressed with how the US is addressing employment issues so similar to their own. As Russ Beard wrote “It was crystal clear to me that the people I met saw us as a source of hope, bringing answers to the challenges they are facing in moving their nations to global participation. In us they saw the American dream.” It is perhaps the best that America can offer – optimism about the future and a mutually defined roadmap that enriches both partners.

Unemployment numbers mask job solutions

In an interview published in the newspaper “L’Economiste,” Moroccan Minister of Employment and Social Affairs Abdeslam Seddiki, made it clear that “to solve the problem of unemployment, we should not count only on growth.” He went on to say that “according to estimates, 1 percent of growth rate generates an average of 30,000 jobs, and we have a labor market that is witnessing an annual arrival of 180,000 job applications. To meet these arrivals, we need a growth rate of 6 percent, without including the existing stock of unemployed people.”

He pledged to work towards “setting the balance between innovative investment” and those in more traditional sectors that produce direct jobs and “investment in infrastructure that creates indirect employment.” This distinction is quite important, particularly in the high tech and tourism sectors, since they often create many more indirect jobs than the core employment generate by a specific project. For example, both high tech and tourism projects have three phases: development, start-up, and operations. During development, many of the employees are related to the planning phase, are engaged off-site and overseas, may be largely expatriates, and perform high-value and capital intensive (as opposed to labor intensive) functions.

Start-up requires looking to a broader employment pool to attract qualified expatriate and local employees to provide the services required to bring the project to the operational stage. These workers may or may not stay with the project beyond the short and medium term as their special skills are not needed once the project is up and running. It is during the operations phase that most long-term jobs are created because other functions are needed, ranging from logistics and maintenance support to marketing and packaging, household services, administrative tasks, and whatever else is needed to sustain the project.

Operations management looks to purchase local goods and services from the most cost-efficient and acceptable sources, thus creating opportunities for indirect jobs that support the project in the functional areas mentioned above. This is where government programs that promote local business development can play a facilitating role as a broker between the project and the skills and resources available locally. Morocco is moving in this direction as the Ministry of Employment and Social Affairs is focusing government training programs on a more collaborative relationship with investors in order to anticipate what jobs and local companies will be needed by various projects over the medium and long term.

Government plays a key role in enabling job growth

This is also the target of entrepreneurs in Morocco – finding where opportunities exist locally, regionally, and internationally for their products and services. At the recent Casablanca-based New Work Labs competition called PitchLab, the winner, Kipintouch’s founder Saad Jennane noted that Moroccan entrepreneurs must have a global mindset, not just focused on Morocco. “We can target the world or an entire region like the Middle East.”  As I have written previously, without an enabling environment, from access to finance and administrative support to friendly legal and regulatory regimes, obstacles will force entrepreneurs to abandon their efforts.

A second major area on which the government is focusing its efforts is the informal sector in Morocco. With an estimated value equivalent to 60 percent of Morocco’s GDP, bringing the informal sector into the marketplace through ease of entry regulations that encourage and reward these small firms will formalize the tens of thousands of informal jobs that are outside the country’s official employment roles.

This would have three immediate impacts: increased tax revenue and participation in social security and related programs, increased opportunities for collaboration among these largely micro-enterprises to enable them to have access to banking and administrative services, and, most importantly, for those with ambition, to provide the means for growth by attracting funding to expand their businesses. The government’s role in ensuring a positive and business-friendly regulatory environment and in making training and resources accessible is vital and critical to the success of this effort.

The Minister, who noted that the “pressure on the labor market is still high, said that his department can act immediately on existing employment creation policies, namely the Taehil, the Idmaj and Moukawalati programs.” The Taehil program provides pre-employment training partly paid by the government with private sector partners. The Idmaj provides employment training for those with disabilities; and the Moukawalati project is the core entrepreneurship program in Morocco that is built on a public-private sector partnership.

Through greater collaboration with the private sector, more involvement of industry in boosting local sources and skills, and with increased joint investments in training, education, and entrepreneurship development, Morocco can generate the growth in jobs that will meet its needs in the coming decade.

US partnering with Morocco to support its human development – Part 1

What better way to start a new year than to review events of the last quarter and see what the indicators tell us about how Morocco is progressing. The highlight of 2013 was, of course, the meeting in November between President Obama and King Mohammed VI to renew and upgrade the bilateral partnership. The well-crafted diplomatic statement that was released detailed modes of cooperation and coordination between the two long-time allies, and several agreements were signed or announced that defined the way forward.

One of the agreements that addresses key issues discussed by the King and President Obama is the USAID Country Development Cooperation Strategy (CDCS) 2013-2017, which describes how USAID will help support Morocco’s efforts “to improve workforce development practices, enhance citizen participation and increase the quality of primary education.” Some useful facts: the first US economic assistance agreement with Morocco was signed on April 2, 1957; the CDCS —is part of the larger framework of the US-Morocco Strategic Dialogue launched on September 13, 2012. “one of only six such bilateral agreements in existence.”

Supporting the reform agenda

There are numerous references in the CDCS to the importance of Morocco’s reform agenda and the constructive actions of King Mohammed VI in response to the Arab Spring. It points out that while the entire region experienced some level of unrest, “a reformist constitution and strong political will have positively positioned Morocco for accelerating progress towards development goals.” The CDCS places continued political reform at the center of Morocco’s development agenda and welcomes the dynamic link between reform and progress that is evident in Morocco’s 2011 Constitution. “Given this unprecedented democratic opening, Morocco is well positioned to make significant improvements to democratic processes, allowing the country to implement its reform agenda in a pluralistic and sustainable manner.”

The momentum of political reform includes broadening opportunities for greater civic engagement by Moroccans at all levels, complemented by increased economic activity that deals with the central issues of unemployment and market related education. For most of the last decade, Morocco’s economic performance has been steady, and the CDCS links continued political progress and sustained economic growth. “Implementing the needed reforms to create more inclusive growth is therefore essential to preserving solid economic performance in a challenging external environment.”

The Moroccan economy has been negatively impacted over the past three years by the decline of investments from and exports to the Eurozone, as well as fewer remittances from Moroccans working abroad. To offset these trends, Morocco is greatly expanding its presence in Africa and broadening its development agenda to support greater political and economic participation. And it is in the areas of employment promotion, greater opportunities for women, capacity building for civil society, and political party reform that USAID is poised to make important contributions under the new plan.

USAID focuses on short and medium-term workforce empowerment

As detailed in the CDCS, USAID believes that it can work with partners throughout the country to help reach Morocco’s development goals. “Due to the experience of past projects in Morocco and civic participation best practices from work done around the world, USAID is in a unique position to help Moroccan Civil Society Organizations (CSO) and public institutions nurture civic participation in public decision-making during this critical juncture in Morocco’s democratic evolution. From issues of workforce development to civil society capacity building, USAID has worked with stakeholders throughout Morocco to define a multifaceted strategy on the issues of employment and capacity building.

“USAID is proposing to enhance youth employability by focusing on the transition from education to employment for university and vocational students and recent graduates. The Mission will take an integrative approach to help Morocco adopt demand-led education and training systems that are both flexible and aligned to high-impact sectors and industries.” Projects described in the CDCS supplement existing programs, collaborate with a variety of stakeholders, and have a particular focus on raising opportunities for women. Among its many efforts, “USAID will work closely with the Ministry of Employment to strengthen its planning and monitoring and evaluation capabilities, while advocating for flexible hiring practices beneficial to youth.” Rather than focus on specific sectors, which is being done by other donors, government agencies, and private industry, USAID resources will target potential employees regardless of their industry or service.

Drawing on its global experience, communicating broadly and collaborating with stakeholders, providing data and metrics that will facilitate best and sustainable practices and taking an integrated strategy in delivering its programs and projects will enable USAID and Mission Director Dana Mansuri to further enhance their effectiveness as proactive partners in Morocco’s development.

Education and Employment: Bridging the Divide (Part 2/2)

East and North Africa, rates of unemployed young women are eight times that of men. This is the last of a two part series. Read part one here.

As Jamie McAuliffe, president and CEO of Education for Employment (EfE), remarked at the WEF conference in Jordan: “We are trying to get governments and businesses to identify job-creating sectors and encourage investors to engage in them.” He also spoke of the need to encourage entrepreneurship and facilitate ways for young people to start small businesses through micro-financing programs. He went on to emphasize with regards to women that: “The rates of unemployment are as high as eight times that among young men,” and that “getting young women into the work force and supporting opportunities for them to become entrepreneurs is one of the critical challenges and opportunities.”

Entrepreneurship, however, due to the hesitation of financial institutions and inadequate legal structures, is more attractive than attainable at this time in the Middle East and North Africa (MENA). Even in the Gulf Cooperation Council (GCC) countries, enabling business start-ups largely remains tied to one’s status and social connections rather than the business prospects of the product or service.

So in addition to the four factors listed above, one could add a fifth: the role of the informal economy, which for many is the only accessible outlet for entrepreneurship since official channels are full of obstacles for those with little experience or education to manage the multiple steps for launching a business.

Another concern expressed in The WEF program was engaging youth to perceive employment as more than work and more as a career, that is, acquiring skills that over time enable one to reach higher levels of achievement and compensation – critical in societies that place such a high premium on marrying well and being able to provide for a family. With the concern that public payrolls can no longer support inefficient labor practices, and the lack of diversity in most MENA economies, the IMF has issued a report on the need for greater private sector absorption of new job entrants. This will require a long-term, multifaceted program working with governments in hands-on technical and vocational training projects, as well as higher quality and better targeted secondary and tertiary education.

A sotto voce topic that relates to youth attitudes towards work is their perspectives on the kind of work and on-the-job behaviors that they value. Dealing with the expectations of job applicants is a nagging complaint across the MENA, especially about those with university educations and few practical skills. With few role models to emulate that are not tied to “the old ways,” young people range from those who are poorly or partly educated and unskilled and semi-skilled through experience, to those who are educated and unskilled with expectations that are not aligned with prospects in their economy.

It is no wonder that when youth across the region are polled about their job choices, more than 30 percent believe emigration is their best alternative. Joe Saadi, chairman of Booz and Company and managing director of its Middle East practice, painted the stark consequences of lagging youth recruitment: “Every year you don’t have the capacity to absorb newcomers into the labour force, you’re compounding the unemployment issue and, given the social and economic pressure in the region, there is this sense of urgency setting in.”

An interesting and in some ways compelling recommendation from someone whose company recruits young people, is to institute a form of compulsory service for six months in order to change the mindset of young people unwilling to consider certain jobs. This would instill values consistent with the workplace, according to Mohammed Al Mady, CEO of Saudi Basic Industries Corporation (SABIC), which has more than 20,000 employees. He believes that this approach will: “Teach them resilience, teach them modesty, teach them how to work and take the ladder step by step until they reach what they want.” Al Mady pointed out that even the recent Saudi labor policy to force the private sector to employ more nationals – nitaqat – did not necessarily address the problem of improving the quality of youth for employment purposes.

Case: Youth Employment Challenges in Morocco

Morocco has yet to experience significant economic dislocations as a result of the Arab Uprisings, and its subsequent actions may serve as a potential case study of a North African country that has undergone the least amount of turmoil while advancing economic reforms that in no small part are focused on the labor force.

The Arab World Competitiveness Report 2013 identifies education and the inefficiency of the labor market as the most obvious drags on the kingdom’s competitiveness and social cohesion. Not only is the public education system not aligned sufficiently with the needs of business, “the labour market structure needs to allow for an efficient use of talent and sufficient flexibility.”

As in other Arab countries, youth between the ages of 15 and 29 account for about 30 percent of the population and 44 percent of those of working age. “Official statistics indicate that about 90 percent of young women and about 40 percent of young men, who were not studying in the past couple of years, are either unemployed or part of the economically inactive groups.”

In a thoughtful analysis, Lahcen Achy, an economist specializing in the MENA, adds a less visible, yet critical piece of analysis: “Young people spend on average 80 percent of their time hanging out or doing personal and recreational activities that are highly unproductive.”

He challenges the stereotype that the situation is most critical for unemployed university graduates. “Most of the unemployed youth in Morocco have either low education levels or haven’t studied at all… those who are least educated are left without any help… and only 8 percent of unemployed youth have benefited from [the National Agency for the Promotion of Employment and Skills] services.”

His argument is that the marginalized youth, whose numbers far exceed university graduates, must be targeted for both employment and social integration. Involving the private sector has had some success, but the pace of generating jobs with wages that meet living needs (including prospects for marriage and family) is woefully short. Morocco is aiming at a more systematic and integrated employment strategy in partnership with a number of international agencies. For example, the European Training Foundation (ETF) has brought together business and civil society groups to exchange views on options “to improve human capital in the country’s small business sector.”

Across the board, recommendations include a more integrated framework for promoting entrepreneurship from primary through university education; women’s entrepreneurship as a national priority; and better access to finance, training, and coaching services as well as data collection on the impact of these programs that would allow for policy formulation – a necessary component if the informal sector is to evolve into a dynamic part of the nation’s economy.

Recent programs in the US and a joint certification program developed with French technical assistance provide opportunities for workers who have gained skills outside the formal system to receive certification of their accomplishments, which will enable them to move up the value chain, perhaps even become an entrepreneurial offshoot from existing industries.

It is in this environment of accelerating demands for youth employment and bringing greater efficiencies to workforce development that underlines the importance of coming to grips with the challenges before they become widespread regime liabilities. The government’s inability to date to move its agenda of economic reforms through parliament has resulted in a stalemate that threatens progress in facilitating economic growth.

King Mohammed VI’s insistence that the educational sector be insulated from political volleyball may help renew a national debate and progress on strategies to move forward more aggressively on measures to improve Morocco’s competitiveness — a key factor in attracting the domestic and foreign investment critical to generating the jobs so badly needed in the country.