What is Nationalization?

In the MENA region, Nationalization is concerned with increasing national citizen engagement in the labor market, in particular the private sector.

A Short History

The nationalization of a country’s labor market is a path most, if not all, developed nations have followed. Having an engaged national workforce is important for a host of political, social and economic reasons. Giving preference to national talent over foreign talent is the primary way nationalization has been implemented world-wide.

There is an imbalance between the number of foreign nationals and nationals working in the private sector in the oil rich Gulf states. Foreign talent and expertise were needed originally in the region half way through last century to support ambitions for rapid social and economic growth. The burgeoning private sector that alongside oil has fuelled so much growth, is dominated by foreign nationals. Regional leaders recognised that for the long-term stability and prosperity of their countries, transitioning reliance on foreign nationals to nationals for critical skills and expertise in the private sector was essential. Furthermore, the public sector had reached saturation point and could no longer provide national employment on the scale required.

Consequently, private sector nationalization targets were set by governments across the region. In 1997 the UAE set the Emiratization target at 50% by 2007. In 2015, Emiratization of the private sector is 0.65%. Although the bold targets are not met, they serve as an important statement of just how important nationalization is to the region’s future.

A lot of effort and resource has gone into nationalization so far and many think more progress should have been made. However, nationalization is a complex system of interrelated challenges. Complex challenges are not solved quickly and results when they come are exponential. The human genome project was 1% complete half-way through its expected 14 year life. Less than 4 years later the remaining 99% of the genome was mapped. For nationalization to see the same exponential results, greater recognition of the complexity of the challenge is needed.

Much of the advice, thinking and action in support of nationalization to-date has not adequately accounted for this complexity. Although a lot has been done, it has happened in a somewhat uncoordinated, isolated way. The work to-date has suffered from an over-simplification of issues. Insufficient focus on the links between key-stone challenges has meant the key-stone challenges that prevent systemic progress remain fuzzy. To progress nationalization, everyone must acknowledge its complexity. To work within complexity, greater clarity and consensus is needed.

Complexity Explained

In large human systems like society, there are so many variables that are not predictable. Nationalization is complex because it requires systemic cultural and social changes within society to take place in-order to achieve the goals.

Solutions to complex problems require an adaptive network of solutions that address specific problems with knowledge of the relationships between the problems themselves. Isolated solutions may effectively address a specific problem but because they are not aware of or address related problems, the systemic problem never resolves.

Why Is Nationalization So Important?

Urgency

The number of school graduates outpaces the number of jobs being created in the region. Although estimates vary, approx. 85 million jobs are needed in the next decade. If a fraction of graduates can’t find work, the political, social and economic cost will be enormous. Social interventions take time to deliver results. Failing to address the key-stone challenges now delays things further.

Civil Rights

Nationals should be able to find meaningful employment within their own country as a civil right.

Young Population

The MENA region has one of the youngest populations in the world; a population that have grown up as digital natives. In our increasingly digital world, these demographics represent the single biggest opportunity for the region, beyond the natural resources that have spurred much of the growth to-date. Finding and creating jobs for 85 million over the next decade is the flip-side of this demographic coin.

Security

There is a risk in being so dependent on foreign nationals for so many skills and expertise. Although it is likely that foreign nationals like everywhere in the world will continue to play an important part in defining the shape of the region, increasing the national population’s stake and ownership in their defining their future through employment in the public and private sector, is essential.

Economics

The public sector has long been a source of employment for many nationals however it cannot be in the long-term. The cost of an inflated public administration represents a very real threat to the regions economies. This cost does not factor in the huge opportunity cost of not growing innovation and revenue in the private sector.

Engagement = Productivity = More Jobs

Autonomy, mastery and purpose are three pillars that many regard as essential for happiness and engagement in work. Engaged employees are not only happy employees but are productive employees. Productivity is the source of creativity and innovation, two key elements that help build new businesses that create more jobs. Although the public sector must do more to create ‘three pillar’ organizational cultures to drive greater levels of productivity, the private sector offers many of the experiences and opportunities that employees are looking for.

Nationalization is nationally significant and more needs to be done to highlight this to key stakeholders.

What Are The Nationalization Goals?

• Increase national participation in the labor market, in particular the private sector.
• Develop skills and expertise within the national population in areas where there are shortages.
• Develop the necessary soft-skills within the national population needed to thrive in mixed-culture organizations.
• Increase the resilience of the national population so that it can adapt to a changing global market.
• Develop the innovation and entrepreneurship capabilities of the national population to drive long-term job creation.
• Create a thriving knowledge economy.

The Stakeholders

• Government and Leadership | Public Sector Organizations
• National Communities and Families | National Parents
• National Recruits | National Job Seekers
• National Youth | National Educators/Teachers
• National Private Sector Organizations | Entrepreneurs
• Foreign National Communities and Families
• Foreign National Private Sector Organizations
• Line Managers | Foreign National Workers

Nationalization = Change

Urgency

There is a lack of urgency amongst key stakeholders as to how important nationalization is. There is currently little urgency across the stakeholders because the impacts of failed nationalization are uncertain and in the future. Nationalization requires a shift in the cultural and social mindset and habits. If you’ve ever tried to give up a bad habit, you know how hard it can be. If you have to give up a bad habit like smoking because its making you sick, it’s a little easier. Why? Being sick creates urgency, and urgency makes change easier.

When urgency is missing, it can be substituted for rewards and penalties. Creating an effective range of rewards and penalties that are consistent with each other across the broad range of stakeholders is essential.

Vision and Clarity

The role each stakeholder must play in nationalization and why they must play it must be clear. It is not enough in complex domains for stakeholders to understand their own roles in isolation. They must also understand the vision and purpose of the entire system and the roles other stakeholders are playing. Unless people understand the Why, the What and the How at a systemic level, building consensus across groups and wide as society is impossible.

The Why, the What and the How are misunderstood by most stakeholders or each has their own interpretation. Communication and actions from the bottom to the top of society must be consistent.

Keystone Challenges

Government

The government through law, policy and spending has a large hand to play in creating urgency, vision and clarity. Greater focus is needed on key aspects of government that affect nationalization including social support, education, labor, innovation and business, immigration and public sector recruitment.

Removing duplication or contradictory effort from the system and approaching the complexity with programs that are agile is essential. Acknowledging the complexity of nationalization and appealing to key stakeholders for support is another important step government must take. A systemic, social challenge like nationalization requires more bold and courageous leadership, a compelling vision for all stakeholders and recognition that the challenge is hard.

Social Engagement

Family and community play an important role in shaping the experiences and decisions of youth in education and their careers. Despite their influence, the level of engagement families and communities have remains mixed. Increasing the level of involvement parents and communities have in the lives of young people especially in education and the wider context of career choice is important. Parents must help young people think beyond salary and benefits and highlight the future needs of the community and country. Educating parents and communities, providing them with tools and tips on how to engage youth on key issues is an important step in encouraging greater engagement. Not enough is being done at this influential level to re-shape the expectations and values of youth coming into the workplace.

Education and Workplace Readiness

The education system must focus increasingly on creating more resilient and agile thinkers. In an increasingly complex world, a world made more complex by the multi-cultural demographics of the region, graduates must have the soft-skills in order to thrive. The cultural transition from school to the workplace, in particular a multi-cultural private sector workplace, is still hard. The high first year churn rate of nationals in the private sector indicates this. School’s must expose students to a wider range of experiences, challenges and growth opportunities in order to create a mindset in students that can adapt to change.

Private Sector Strategy

The private has largely failed to reconcile nationalization within its strategic outlook. There remains divisions throughout large organizations about how to approach nationalization, the responsibility organizations have and the benefits to be gained. Without reconciling these divisions, developing a coherent and affective strategy is hard.The private sector stands to gain significantly from nationalization in the long-term and must invest the time and resources into understanding how.

Money, Security, Benefits and Recruitment

The private sector can’t compete with the public sector on the very thing that graduates and society values: money, security and benefits. A survey published in September 2015 recorded that 100% of participants said salary was the most important factor influencing job choice. Compare this to studies on American graduates that show only 67% of survey participants prioritise salary.

The regional expectation on salary has been created in part by the monetary wealth and comfortable living conditions many nationals of the oil rich Gulf nations have experienced in the last 30 years. When these expectations combine with the better pay and benefits of the public sector,  and the fact 67% of job seekers think working in the private sector will be hard,  it is clear why private sector nationalization is suffering.

The private sector can not compete on salary but is able to out compete the public sector in other areas job seekers deem valuable. In a recent survey, given the same salary and work hours, personal and career development opportunities and workplace culture are most important to national job seekers.

More needs to be done to decrease the pay and benefits gap between the private and public sector. The private sector must do more to highlight the personal and career development opportunities and their great workplace cultures. Job seekers need more opportunities to interact with the private sector in informal, real-world settings so both parties can see how each other think, behave and work. Finally, on-boarding and support programs that help with the transition into the private sector makes saying yes to the private sector so much easier.

Crossing Cultural Borders

Multi-culturalism is a defining feature of the region. Despite the mix of cultures that make up regional societies, the formal culture that youth are exposed to is their own national culture. Their national culture is pervasive in the home, at school and the community. The lack of integration and exposure to the range of other cultures in the early years means transitioning into multi-cultural workplaces and learning environments can be very difficult. From management and leadership relationships to the structure and delivery of education and support programs, being sensitive to the cultural context is the difference between national recruits thriving or churning out of the private sector.

Recognising the differences between cultural preferences and expectations is like recognising differences between learning styles and personality types. Both parties must have the skills to successfully cross the cultural borders and meet each other in the middle. More needs to be done in education, workplace readiness programs and the private sector to bridge the cultural divide.

Resilience, Innovation and Entrepreneurship

People are creative. Our minds are capable of thinking in new and interesting ways. It is our most natural state. Unfortunately, society, education and the workplace train us to think differently and does’t do enough to recognise the value of creative thinking even though our survival depends on it. In an increasingly complex world where more challenges on the scale of nationalization are emerging, adaptive, resilient and creative thinking has never been more important.

Young people in the region need to be exposed to more experiences that empower them to think innovatively. True innovation is forged out of need, desperation, passion, desire and failure. People must feel it is safe to fail and culturally they must be allowed to fail. It is important in a regional culture that struggles with failure that the failure of an idea or company is distinguished from personal failure. Ideas can fail and must fail. People only fail when they give up and stop trying.

Innovation and entrepreneurship are skills young people must develop in the region if the number of jobs needed are to be created. From education to national service, regional societies must do as much of possible to inspire and empower young people to be innovators within organizations or by starting their own.

# of jobs needed in the MENA region in the next 10 years