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CLOSING THE SKILLS GAP
With 60 percent of Egypt’s jobless under the age of 24, the public and private sectors are learning how to make young people more employable
BY TAMER HAFEZ
Globalization has lent new urgency to an old Egyptian problem: a huge supply of secondary school and university graduates who don’t meet the demands of the workplace.
And as the government tries to reform the education system, the private sector is getting more involved to help close the skills gap.
Throughout the world economic crisis, the Egyptian economy turned in a surprisingly strong performance, growing 7.2 percent in 2008 and 4.7 percent in 2009. At the same time, experts agree that the majority of Egypt’s university graduates need additional vocational, soft-skills or language training to find a job.
“When almost 50 percent of the local population is under 35, and yet the business sector says that it can’t find quality caliber hires and graduates say they can’t find work, then there is something wrong,” says Shahinaz Ahmed, CEO of the Education for Employment Foundation – Egypt (EFE).
The situation is not unique to Egypt. “The current problem of an underqualified workforce is a symptom of growth,” says Adham Nadim, executive director of the Industrial Modernization Center (IMC). “China passed through this phase where education lagged behind industry... They solved it by investing in better education and technical training.”
However, a significant difference between China and Egypt is that the ministries of education and higher education here have been unable to dramatically improve workforce quality, according to most experts. To address the lack of job skills, corporations are becoming increasingly involved in education, and that has raised questions regarding the appropriate role of business.
In a typical win-win situation, corporations started working with NGOs and universities to bridge the skill gap. But is there a point at which this relationship becomes problematic?
Education foundations
Obstacles to providing an effective public education include overcrowded universities, and underpaid professors and faculty. Professor Mahmoud Allam, assistant provost at Nile University (NU), has worked in the three types of universities operating in Egypt: public, private and not-for-profit. “I worked for public universities for six years,” he says. “It was difficult and frustrating.”
As a result, several private and public entities have begun initiatives to train young people for jobs. EFE, for example, is a private NGO founded in the US that operates in the Middle East and North Africa (MENA) region through independent affiliate foundations. “Our business model is business-service oriented rather than education oriented. We find out the needs of a business and satisfy them through training,” says Ahmed. This training can include soft and technical skills.
The state-run Information Technology Industry Development Agency (ITIDA) was formed to empower the ICT sector. Among the programs offered by the agency is the Information Technology Academia Partnership (ITAC) initiative, which aims to increase the global competitiveness of Egyptian ICT companies.
At private for-profit universities, higher tuition fees can mean better facilities with fewer students per class. However, “when education and profit go head-to-head, profit usually wins, and this means that there will be sacrifices and compromises on the education side,” says Allam. “I worked in private universities for almost 12 years, and in my opinion the for-profit model doesn’t work because they are looking after their bottom line.” But Allam points out that affiliations with reputable international universities can force private universities in Egypt to invest in facilities and maintain appropriate class sizes.
Not for profit
The American University in Cairo (AUC) and Nile University (NU), established in 1919 and 2006, respectively, represent the old and new of not-for-profit education in Egypt. They represent the educational model that many in the field suggest is the most effective.
NU is “the first not-for-profit privately managed university focused on postgraduate studies,” says Hazem Ezzat, a professor and vice president of research, adding that since its beginning the school has collaborated with the private sector.
Ali Hadi, AUC vice provost, describes his university’s relationship with corporations as circular, where research can attract the attention of a corporation, which then provides support that allows further research. “An idea may be developed into a prototype that is patented,” he says. “Then a corporation would find it useful and pay for it. This corporation would then fund the university to do more research and development.”
Ezzat emphasizes that a university needs to be “ahead of the curve” when assessing private sector opportunities. “Sometimes we agree to collaborate, sometimes we don’t,” he says, pointing out that international companies have a btter understanding than Egyptian businesses of the importance of university work.
Business and engineering studies often attract the highest level of private sector involvement. “Corporations told us that communication and information technology, executive management and applied sciences were the specializations with the most potential, hence our three specializations: information technology and management, executive business administration, and engineering and applied sciences,” says Ezzat.
Advisory boards can be effective tools for shaping strategy and facilitating access to real-world expertise. At the newly established AUC School of Business, “the board is made up of academic professionals and industry experts from Egypt, MENA [Middle East and North Africa], the US and the EU,” says the dean, Sherif Kamel. “We have seminars where we bring case studies from the Egyptian market to highlight best practices in management. This brings the students in touch with what is happening in the real world,” he says.
AUC provost Lisa Anderson believes corporations also should take an interest in areas such as the humanities, social sciences and philosophy. “Companies hire our graduates because they are agile, imaginative thinkers... I think that people need to realize that being innovative and critical are the skills for the 21st century,” she says.
For traditional specializations such as industry and IT, universities frequently fill a research and development (R&D) role for companies that don’t have their own departments. “Five years ago, [Egyptian companies] spending money on developing a product was almost unheard of. Now things have improved,” says Hadi, “even though most companies I know of don’t have an R&D department as such.”
A matter of money“Active participation [with businesses] is not a luxury... It is a requirement for university survival,” says Hadi. “Fees account for 65 percent of operating budgets; the remainder comes from other sources, such as funds or grants.”
The Center for Advanced Studies established by IBM in 25 countries, including Egypt, is tasked with creating academic and governmental research opportunities. “This center is a win-win-win situation,” says Hisham El Shishiny, who is manager of the Cairo center and oversees operations worldwide. “All the results of our collaborations are in the public domain. We believe this is a very good model for open collaboration.”
Selection of research projects is based on what IBM calls “game changers... new trends in technology that will impact the IT industry,” explains El Shishiny. “After that, we select a university to cooperate with as well as visiting scientists from the US or Europe.” Currently, IBM is collaborating with over 450 universities worldwide.
Education-related collaboration with the government includes a Service Science for Management and Engineering program, an interdisciplinary approach to innovation in the service sector. The program will be run in all 17 public universities, with phase one starting this month. The project is an effort by IBM, the Ministry of Higher Education, the Supreme Council of Universities and ITIDA. “Our target is public universities, because this is where most students are and where the highest potential for improvement is,” says Dina Galal, IBM government programs executive for MENA.
IBM’s involvement in education extends to its “Smarter Planet” program, which stresses interconnectivity by maximizing the capacity of the world’s technology infrastructure. “The aim... is to create an education cloud with shared resources. Smarter education is more personalized and student-centric, and the cloud will help stakeholders share resources,” says El Shishiny.
Intel Egypt is also undertaking comprehensive efforts to improve primary and secondary education, such as Intel Teach (for teachers), Intel Learn (for students), and the Intel Science and Engineering Fair competition. “These programs are part of the Intel global strategy. Of course we tailor it to domestic needs,” says Taha Khalifa, Intel Egypt general manager. The importance of the company’s school involvement is to teach “21st century skills, like critical thinking, analysis and creativity, to kids at an early stage,” he says. Intel Teach has trained 270,000 teachers on the latest teaching techniques and expects that number to reach 500,000 by the end of 2011. About 40,000 students have participated in Intel Learn, getting training on how to use information and communication technology in their daily work.
At the university level, Intel is cooperating with ITIDA through the ITAC initiative, and working with Nile and Alexandria universities, among others, on graduation projects and R&D projects. “We are developing a special curriculum with the University of California, Berkeley, similar to an MBA. Also, we have a curriculum on multicore technology,” says Khalifa.
Missed opportunity
Educators and government officials see vocational education as an area with great potential for partnerships that could be critical for Egypt’s economy.
Vocational training can be expensive because it often requires extensive equipment and small class sizes, but the long-term payoff can be substantial for businesses and students alike, says Nadim of the IMC. “Vocational programs require the cooperation of factory owners in training those students on state-of-the-art technologies,” he says. “Sometimes companies say they can’t afford to shut down a production line for training. In fact, a large portion of factories see training as a cost that could be postponed.”
Proponents of vocational training also must struggle against “social stigma,” according to Nadim. Young people go to university to avoid this stigma, then often wind up requiring vocational training to get a factory job, he says, noting “this is a massive waste of resources.”
A study in Germany found that vocational training for one student costs the equivalent of LE 140,000 a year, half paid by the employer and half by the government. In Egypt, LE 3,000 is spent, Nadim says, which often results in mediocre training with the IMC forced to bear the cost of retraining. “We are barely covering the hundreds of thousands [already working in factories] who need this training. Once the load lightens, we will shift our attention to high-value learning courses like Six Sigma and lean manufacturing, and customize programs to newly introduced technologies,” Nadim says.
Realizing the enormity of training needs, the IMC established the Industry Training Council (ITC) in 2006 with capital of LE 500 million. The ITC is in charge of developing vocational training content, certifying training centers and overseeing projects aimed at reforming technical and vocational training. “Companies come to us with their training needs, and we then go to the ITC to direct those companies to the correct training facility,” explains Nadim.
The Technical and Vocational Education and Training (TVET) reform program was initiated in 2006 and extends through 2011, with plans to extend it beyond that date to focus on implementation. It is a E66 billion joint program with the European Union aiming at developing a strategy for vocational education. Ahmed El-Ashmawi, senior program adviser, explains that the TVET reform program is sector-based.
“During the project, we work on pilot programs to gauge the success of our suggestions. One of the biggest problems we faced was that there was no link between vocational training and industry,” says El-Ashmawi.
To provide a conduit for communication, the program established 12 enterprise training partnerships (ETPs), each focused on a specific sector. The not-for-profit ETPs have boards of directors, two-thirds of whom are from industry and one-third from public or private training centers. The partnerships are intended as a tool that industry can use to relay its needs to the education sector,” says El-Ashmawi. There also are ETP branches in Damietta, Alexandria and other governorates.
ETPs work closely with unions, associations and federations that “act like the training arm of the Egyptian Federation of Industries,” says El-Ashmawi.
The other part of the TVET reform program is to develop vocational training centers and schools. “We have a very limited budget of LE 90 million for equipment and must prioritize certain centers or schools,” he says. Centers located near industrial hubs – such as Sixth of October City, 10th of Ramadan and Borg Al Arab – receive the highest priority.
Risk and return
Despite the apparent mutually beneficial situation, universities and corporations have differing ultimate objectives, according to Ahmed of EFE.
The core of the problem is funding versus freedom of research. “The university needs to be careful not to be driven by money,” says Hadi. “We should have principles.” Ezzat agrees: “You have to be aware of industry needs but also keep a focus on your mission and your overall strategic objective... The mission is to educate, build capacity and skills, and use your competencies to mind the future of the sectors you have chosen to focus on.”
Despite a low level of involvement by corporations in vocational training, there are risks of too much influence. “A factory can request that a worker be trained on a particular task and nothing else,” says El-Ashmawi. “Our mission is to educate. Trainees need an array of skills and knowledge, giving them career options. And this is when disagreement between training providers and corporations happens.”
Others don’t think there will be a problem. “We have a strong sense of identity and purpose, of why we are doing what we are doing and the value it has for our students,” says Anderson, the AUC provost. “As long as this is retained, we welcome the opportunity to cooperate with businesses.”
For IBM, penetrating the education system is not possible. “We are only partnering with the government to help them achieve some of their goals in education.” For Intel, Khalifa believes that university partnerships will always be beneficial because the company is working on technologies and products that will be introduced in the market after 10 years from today.
Some universities are establishing niche programs to fill specific needs within the economy. One example is the AUC program in actuarial science, which uses mathematical models to assess risk for the financial services and insurance sectors, among others. “In 2004, there were 10 actuary scientists [in Egypt], six of them over 60 years old. We identified that such a specialization would be beneficial seeing that in 2004 there were four insurance companies. Now there are 29,” says Hadi.
Ahmed sees a risk of excessive corporate involvement in the formal education system. “Too much involvement is dicey because it could imply that the state has failed to support one of the main pillars of a nation state,” she says. “If you pass education to the private sector, they will begin by funding it, then by interfering in curriculum, then by owning schools. You are not educating school graduates to be employees; they can be poets, activists, scientists and dancers.”
An employable future
While there is general agreement on the existence of a gap between business needs and educational objectives, many believe the situation can be fixed.
Rising industrial exports – from LE 44 billion in 2004 to LE 92 billion in 2009 – can be seen as evidence that vocational training has improved over the past five years. “International buyers are not forced to buy from you. So this increase in exports means that international buyers see a quality product. And that means that the quality of the worker has improved,” says Nadim. Rachid Mohamed Rachid, minister of trade and industry, recently announced an ambitious plan for exports to reach LE 200 billion by 2013. “We will need to add almost 400,000 vocationally trained workers during this time coupled with the 200,000 already working but who need additional training,” says Nadim. “There is no option, we have to reach these levels of production.”
For crowded public universities, the quality of education needs to improve sooner rather than later. “The number of students must go down, the quality and work environment of faculty need to improve. The state guarantees free education for all; I think the system needs to be changed from free education to performance-based scholarships,” says Allam. “It will provide free education to those who deserve it; a student who spends eight or 10 years in university, failing every year and passing the next doesn’t deserve free university education.”
Not least of all, the business-education gap has strong roots in Egyptian society. “Most see the poor as unemployable... and the opposite is true,” says Ahmed. “This is a culture issue that will need time.”
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