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Access to jobs? Everyone wins when incentives align

Amira Kazem's picture
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Aligned Incentives: Everyone WinsLabor and unemployment challenges in the Arab world have been seen as core ingredients of the revolutions. So now, more than ever is a golden opportunity to tackle these difficult questions and propose bold solutions true to the overwhelming sense of hope and desire for true change. 

In the midst of all the new debate, there are some recent lessons, some successful pilots of the near past to provide a springboard for quick starts in this hopeful moment.  (After all, those crowds of good people protesting in the streets were engaged in some good things before our Jasmine and January 25 movements cleared a wider space.)

 I’d like to use this blog to attempt to share highlights from what I believe was a successful skills development project in Egypt, skills being so very critical to matching young Arabs (the unemployed and the workers) to market demands.

In June last year, the Egypt Skills Development Project that I worked on came to conclusion after six years of piloting a technical training funding mechanism with a commitment that it would be sustained by the Ministry of Trade and Industry’s Productivity and Vocational Training Department. The design of the whole project was built around market demand, elements of competition and cost sharing among stakeholders who included firms which would benefit, business associations and chambers of industry and of course government as the sponsor in this case. All of these stakeholders (who we surveyed to find out what they thought) agree that the project added value to the technical training market in Egypt by delivering quality training services which were moreover actually tailored to the needs of the firms. We also found positive views of the government project management unit; stakeholders said it was transparentand fair in its procedures.

What we saw as the project progressed was that it created an environment for fair competition, which encouraged training providers to tailor their training courses and to progressively locate more qualified trainers to deliver project-related courses. In some cases, training providers were so encouraged that they expanded their trainer cohort to meet the project’s increased training requests and upgraded their courses to include more advanced ones. The project has also encouraged stronger service to firmsin geographic locations that had been almost ignored before.

What this illustrates to me is the tremendous potential in aligning incentives among service providers and beneficiaries. That’s classic economist-speak but what it means is that training providers (private and public) were motivated to adapt their training courses to market requirements (i.e. make an investment) once assured of fair competition and a transparent and credible flow of (public) funds. A similar approach of aligning incentives with mandates holds true when applied to beneficiary firms, individual workers, business associations or chambers of industry, accreditation and certification entities etc… What it all boils down to is reliable and transparent flows of information and funding, getting quality for your investment and producing quality for your investment. Everyone wins. It’s one thing to see this in an economist’s text book; it’s so encouraging to see it in practice. Let’s see more now.

Comments

Submitted by Dr.Syed Aiman Raza on
Leaving aside the geopolitical situation and cultural barriers, the poor from this region can make a way out from the vicious cycle of poverty. The fundamental approach towards bailing out the urban and rural poor is to provide compulsory ‘english’ education to the children, atleast until class XII. Along with this, providing ‘technical education’ just after class XII to the children will definitely provide impetus towards easing out their financial problems in the long run. A know how of ‘english’ and ‘technical education’ together will be a potent force which can push the poor to migrate to countries where they can get employment. Helping the desirous children to gain employment can also be done by letting them know about employment opportunities in their respective ‘technical knowledge’, abroad and as well in their own country. Its a known fact that households reeling under intense poverty are always reluctant to send their children to school and even for higher education. Therefore, the time is ripe to introduce these measures which will eventually allow the youth to take decisions and attain technical knowledge, as early in their life. Dr.Syed Aiman Raza Assistant Professor Department of Anthropology Shia PG College Lucknow India Researcher at Institute for Money Technology and Financial Inclusion,UCIrvine,California,USA.

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