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Could e-lancing provide a temporary cure for skilled unemployment in the region?

Sebastian Trenner's picture
Also available in: Français | العربية
Pervasive unemployment is arguably one of the most pressing policy challenges in many countries across the Middle East and North Africa (MENA) region. Youth, women, and higher education graduates seem to be the hardest hit. With reference to the latter group, some say the youth bulge combined with better access to higher education has produced more graduates, but these then entered relatively stagnant economies with rigid labor regulations. Besides, their skills were often targeted at public sector employment (the so-called "public sector bias") and ill suited to the (comparatively underdeveloped) corporate sector due to a lack of communication and exchange between academia and private companies.

To overcome these circumstances, traditionally, you could either create employment within a given country (e.g. by expanding the public and/or private sectors) or facilitate the migration of the unemployed to countries in demand of their skills. "In-house solutions" would require growth rates to translate into substantial employment growth, which seems unlikely to occur in the short term. Facilitating migration also seems a challenge at the moment, with the ongoing global crisis restraining the number of labor importing markets and a fairly immigrant-hostile political environment in many industrialized countries.

World Bank | Arne HoelThe technological advancements brought about by the development of information and communication technologies (ICTs) have facilitated a dramatic increase in remote work and could represent a "third way". While some companies use this technology solely as a new form of telecommuting, others – mostly micro, small- and medium-sized enterprises (MSMEs) – are going further: They are using dedicated web platforms (such as codeur.com, elance.com, or odesk.com) to outsource some of their (non-core) tasks thereby reaping the benefits of being connected to the global economy. Currently, these e-lancing (online freelancing) platforms are estimated to represent a market value of about USD 1 billion. They are likely to grow as e-lancing becomes more common.  One representative of such a platform described how many people often start e-lancing as a way to boost  their income but over time, become full-time e-lancers.

In addition to a proactive mindset and strong customer-orientation, you need three ingredients to become an e-lancer: (1) Basic infrastructure allowing you to connect to the platforms and fulfill your assignments – in other words, a computer with access to the internet; (2) Some way to receive payment for your work – a bank account or an account with any online transaction processor such as paypal, payoneer or moneybookers; and (3) Skills corresponding to a given assignment. To date, the vast majority of the demand for services is being processed in English but other languages such as Spanish, French or Arabic are on the rise. The latter two could represent niche opportunities for MENA countries.

On the other hand, most MENA countries will need to develop their infrastructure and/or reform their banking regulations to meet the minimal requirements for e-lancing as well as to ensure transaction costs are low enough to make micro-payments worthwhile. Also, the market remains relatively small, with strong competition – for English-language assignments – from countries with low wages such as China, India or Pakistan. Finally, the entrepreneurial and risk-taking culture required for e-lancing is mostly lacking in MENA and would require some time to develop, as well as investments in training and coaching.

Notwithstanding, together with our partners at the Tunisian national employment agency (ANETI), the national observatory for employment and qualifications (ONEQ) and with the support of the United Nations’ Development Programme (UNDP), we co-organized a workshop in Radès on May 25-26 to determine whether there was an appetite for a small-scale pilot project to "convert" the skilled unemployed into e-lancers in Tunisia. Beyond gauging interest, the workshop also focused on the structure and design that could possibly maximize the benefits of such a pilot while minimizing the risks of irrelevance. There was quick and unanimous agreement among all the participants on the necessity, and viability, of such a pilot.

One presenter outlined Tunisia’s many comparative advantages in e-lancing, such as a decent ICT infrastructure in the country’s main cities, quality training, (almost) European time zone, no, or low linguistic barrier for assignments in Arabic and French, dynamism, flexibility, and attractive hourly rates. These advantages point to a particular competitiveness of Tunisia with regards to assignments originating either from MENA countries or from the European continent – in either Arabic or French.

In terms of risks, the presenter also highlighted that some "soft skills" of the local workforce needed improvement, such as the respect for deadlines, the sense of initiative, or reporting on task progress. In addition to this change in work culture, a solution will need to be found for e-lancers to be able to manage their payments in a cost-effective way.[1] Other operational hurdles, such as the difficulty to reach, train (core and soft skills) and coach (how to maximize the e-lancing job hunt, how to get the first contract(s) and psychosocial support for those in long-term unemployment) the skilled unemployed across the country will also make this pilot a challenging task. Mitigating measures could include an initial focus on the countries’ main cities and/or starting with only a small number of participants from a selected number of study fields – which are in demand on e-lancing platforms – such as finance, translation or computer sciences.

Despite these risks, there currently is a unique window of opportunity to try such a small-scale pilot project in Tunisia and learn from its implementation. A parallel, thorough impact evaluation could determine whether, and to what extent, the activity is successful and could be broadened to other study fields and/or replicated in, and adapted to, other countries in the MENA region. Finally, even if the pilot should fail to provide increased work opportunities for skilled unemployed, it would in any case contribute to the fostering of an entrepreneurship-friendly environment.
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[1] Currently, due to the non-convertibility of the dinar and various safeguards related to anti-money laundering, it is difficult – if not outright impossible – to repatriate financial means from online transaction processors.

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