The resilience of nations lies not only in the physical infrastructures that enable their development but also in their 'soft' infrastructure – their human capital or more appropriately, their intellectual assets. It is the intellectual assets that breathes and gives life to the physical make-up and ensures sustainable development and prosperity.
The 2009 Arab Human Capital Challenges Report has revealed that "Exceptional economic growth in the Arab region over the past decade has not coincided with equally buoyant labor and human resource development, raising obvious concerns for sustainable and balanced growth".
The survey results reveal that:
38% of Arab CEOs believe that there is an ample supply of qualified national labor, which therefore translates to a heavy reliance on the recruitment of expatriates.
90% of Gulf CEOs value their expatriate senior management whereas only
68% shared similar views towards their national senior management. The difficulty associated with recruiting national senior management over middle management is largely a result of the limited availability of experienced national professionals.
Hence, this is the case for change, in part because:
- historically the older generation in the Gulf region has had lower labor force participation rates.
- lower levels of education as well as the fact that the older age cohort is less accustomed to working in a modern day competitive environment.
- to add to this dilemma, the Arab world also has one of the lowest labor productivity growth rates.
- this is a serious concern for many in the business community, especially as the region moves towards greater participation in the global economy.
- The failure of the education system to build adequate professional and scientific capabilities.
- Weak social service systems, marred by the absence of appropriate leadership, inefficient administration, unwillingness to empower target groups, inadequate auditing and financial procedures, a thin base of financial and human resources, and a general lack of expertise, skills and commitment among working staff.
- Insufficient funds to replicate successful projects on a wider scale.
Weaknesses:
Multidimensional policies for addressing economic insecurity in the Arab world would simultaneously aim to increase access to educational, training and awareness raising programmes.
By Arab Human Development Report 2009, United Nations Development Programme.
Freedoms like these can only flourish in the Arab region when they are linked to leaderships open to the outside world and intent on reform through investment in human capital and knowledge industries that rely on Arab human and physical potentials.
This strategy requires that government, the private sector, and civil society organizations participate in the formulation of policies and practical programmes. It also requires the existence of a wise and serious leadership at all levels able to implement these policies and present new initiatives.
By Arab Knowledge Report 2009 United Nations Development Programme
Achieving a 50 per cent improvement in levels of adult literacy by 2015, especially for women, and equitable access to basic and continuing education for all adults.
The Aims of Education for All, World Education Forum
Core challenges in Executive Development
The immense leadership deficit that our region suffers from (the demand side) is coupled with major limitation of our local training and education institutions in offering the needed development support required to upgrade the leadership and management capabilities of our senior executives (the supply side). Below is a brief description of the major limitations at the supply side:
Our region suffers from low quality business schools at all levels; undergraduate, graduate and Executive Education. The latest ranking of the world top 100 business school and top 65 executive education programs by FT.Com, indicates that none of them is located in a Muslim or an Arab country/ third world nations.
Multinational companies enjoy the economies of scale which enables them to establish corporate universities offering the needed development for large number of their own executives across the globe. The great majority of business organizations in our region are considered to be either medium or small in size (with few exceptions; e.g. ARAMCO, SABIC, PricewaterhouseCoopers, Emirates Airlines, Savola …etc) which make establishment of in-house training facilities non-economical. Few large companies managed to establish in-house training capabilities to equip their new recruits with the required technical skills and to sharpen the skills of their supervisors and middle managers. The majority of our local large business corporations do not have in-house capabilities to offer needed developmental support to their senior executives and in most cases they -or the fortunate ones- are enrolled to attend Executive Education programs offered at top business schools in the US and Europe.
Many multinational companies are operating in our region. As indicated earlier a majority of them employ best practices in offering executive development programs. Benefiting from such programs is however limited to those working for them. Usually those “fortunate” local managers who have working experience at one of the multinational companies are considered to be a target for head hunting by local companies with high price tags on their heads.
There is an obvious lack of local business case studies and qualified local trainers who have both academic and practical experience. Majority of professors at local business schools do not have the practical exposure to real business life either in practicing or consulting roles. There is also lack of autobiographies or documentary films that portray success stories of local role model business leaders.
Sending local senior executives to participate in Executive Development programs offered at the world top business schools provide the opportunity to acquire state-of-the-art management techniques and leadership skill; however this option has its own downside. The cost of participation is prohibitive. In a cost survey conducted by MILE,
the average cost of participating in one program (excluding travel cost and daily expense) is
US$25,000with an average cost per day of
US$2,100In addition, some of the topics covered have weak relevance to our local needs.
- Most of the presented case studies and portrayed business leader role models are not related to our local culture and challenges.
- The networking opportunities during these programs are usually of top quality, however, are not practically relevant for doing business or sharing ideas in the future.
- Visa restrictions in the last decade were also a major barrier for many local executives to enroll.
The last decade has witnessed several national initiatives to develop local leaders; some are government sponsored while others are sponsored by major local corporations as part of their corporate social responsibilities. The intentions of these programs are very noble; and the academic content and external vendor selection are usually of top quality. The problem with these initiatives is that they are mainly executed as ‘batch processing” where group of emerging leaders are selected to be trained for a very expensive fee that contain the cost of using the logo of the service provider.
The cost of these programs can be classified as OPEX rather than a CAPEX so it does not contribute to building intellectual capital nor to our long term capacity to offer these programs. These programs are non-sustainable in nature and many of them were adversely affected when the recent economic crisis affected the financial position of their sponsors.