Building 21st Century Knowledge Economies for Job Growth and Competitiveness in the Middle East | World Bank Institute (WBI)

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November 19, 2009—The population of the Middle East is young. About 33 percent are less than 14 years old, and over the next 20 years they will need to be employed. About 100 million jobs will have to be created, or 5 million a year, to keep this enormous untapped resource pool of youth in productive pursuits. Unemployment among youth in the region is the highest in the world, averaging more than 25 percent, and many are relatively well-educated first-time job seekers.
 
But because most countries in the Middle East have not taken advantage of the benefits of the global economy they are lagging behind many other countries.  Although it is a diverse region – from struggling Yemen to very wealthy Qatar, from small states to large countries like Algeria and Egypt – they all face upcoming challenges. While the oil and gas-producing countries, which depend heavily on petroleum revenues, need to prepare for a most certain post-petroleum and post-carbon future, virtually all countries in the region will face major water, energy, food, and climate change issues in the decades to come.
 

open-quotesParticipating countries presented case examples and their approaches to becoming part of the Knowledge Economy.
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To address some of these issues, in May 2009, the World Bank Institute delivered a workshop in Alexandria, Egypt (see conference webpage and watch the video) where different country teams from Algeria, Egypt, Kuwait, Morocco, Qatar, Saudi Arabia, and Tunisia exchanged ideas and experiences and put together national plans for making the transition to knowledge economies.
 
Building on this event, WBI, in partnership with the World Bank’s Middle East and North Africa Region, helped the Tunisian government and the Islamic Educational, Scientific and Cultural Organization (ISESCO) to prepare a high-level event in Tunisia, December 1-3, 2009: “MENA Countries in the 21st Century: Building Knowledge Economies for job creation, increased competitiveness, and balanced development"  Participating countries presented case examples and their approaches to becoming part of the global Knowledge Economy (see the conference materials).
 
Forging Ahead – Lessons from Global Leaders
 
So what are the options? We can learn from several countries that took the risk of redefining their futures during the last two decades of the 20th century. For example, in Finland, Ireland, Korea, Malaysia, and Singapore, innovation and the use of knowledge were critical success factors. Increasing the quantity and quality of knowledge in the economy made them more agile in adapting to economic shifts and demands, and better able to participate in international networking so they could take advantage of new information and opportunities.
 
Countries that succeeded in tapping into the global knowledge economy kept learning new ways of doing things. They raised the quality of their education system at all levels – from early childhood through to advanced higher education and lifelong learning. They promoted an “innovation ecology” where creativity could flourish in applied research and science and technology, attracting foreign investment to support new ideas. They made it easier for businesses to operate by streamlining administrative and tax requirements, supporting entrepreneurship, and making local living conditions more attractive for international corporate staff. They made large investments in the information and communication technologies (ICT) infrastructure and in using the internet for education and e-government.
 
Also, these countries have governments that people can trust and where the civil service is based on merit and high performance standards. They were therefore able to implement speedy reforms, gain commitment of top leadership, and coordinate key sectors and activities, and consult and communicate among all the stakeholders. This was facilitated by an ambitious and bold public vision: in all successful cases the government mobilized the nation toward the common goal.
 
Finland, for example, quadrupled public spending on research and development in a time of crisis, inspiring current counter-cyclical investments in innovation. Ireland lowered the corporate tax rate to attract foreign direct investment. Korea rapidly boosted its broadband density and usage to the point where it is one of the world’s highest.
 
What about the Middle East?
 
Many countries in the Middle East have already embraced this transformative concept of the Knowledge Economy, and some, such as Qatar and Tunisia are already making strides in that direction. They have committed to more and better education at all levels, skills development for the labor force, investing in practical applications of science and technology, and making it easier for businesses to thrive. But because Middle-Eastern countries are not easily placed in the same box as Finland, Malaysia, and Singapore, for example, their journeys may be different and will have to adapt to the national context, culture, and circumstances.
 
These are some of the issues that were tackled at the December conference in Tunisia. Experts and public officials from a varied mix of countries were present, including Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestinian Authority, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen.
 
Presentations during the conference revealed that many of these MENA countries, including Algeria, Jordan, Morocco, Saudi Arabia, and Tunisia, have to various extents developed visions, strategies and processes to develop Knowledge Economies. The main challenges identified included: (a) absence of regional collaboration mechanisms to share experiences and develop cross-border projects and initiatives on the Knowledge Economy, (b) very little programs have focused on building a trust-based society and high-performing governments, which were highlighted by participants as essential for building KEs, (c) insufficient sectoral integration of the Knowledge Based Economy strategies, and (d) with very few exceptions, absence of high level leadership and insufficient mobilization efforts.
 
The conference led to the adoption of the Tunis Declaration on Building Knowledge Economies. The declaration stresses the importance of Knowledge Economies for all countries in the region, and calls for the creation of a network of specialized experts and technical officials who would share experiences and expertise, follow up on national efforts, encourage regional initiatives, and publicize international experiences on knowledge-based economies, among other actions. It also calls on the Tunisian government, ISESCO, and the World Bank to continue their efforts to help build Knowledge Economies in the region and facilitate regional collaboration.
 

Additional Related Links

Article: Building knowledge economy to foster sustainable economic growth in the Middle East and North Africa, December 2009, on the World Bank's MENA website 

Speech by Shamshad Akhtar, Regional Vice-President of the World Bank, MENA Region, at the December 2009 Tunisia conference.

Related Publications 

Building Knowledge Economies: Advanced Strategies for Development  

Building Knowledge Economies (Arabic): Advanced Strategies for Development  

Knowledge Economies in the Middle East and North Africa: Toward New Development Strategies  

Lifelong Learning in the Global Knowledge Economy: Challenges for Developing Countries