MENA Enterprise Survey Report Working Papers: Volume 8 - The human capital of firms and the formal training of workers

Description

Investment in human capital through company-specific employee training can be rewarding for firms and their workers. By providing their employees with necessary skills, companies can improve their performance, increase innovation and raise their level of competitiveness. Through retraining, businesses can update their workers’ skills in the fast changing world of digitisation and automation, especially in the context of an ageing workforce in advanced economies.

However, data from the Enterprise Surveys across 35 economies in Europe and Central Asia and the Middle East and North Africa (MENA) region show that investment in formal training across companies has been low. On average, only 39% of medium and large firms provide formal training in these regions. For Egypt, Jordan, Lebanon, Morocco, Tunisia and the West Bank and Gaza the figure is lower, with 29 % of percent formal medium and large businesses providing formal training.

The proportion of university-educated workers is positively correlated with formal training in both regions, but the finding is more robust for the Middle East and North Africa. Increasing university education in the workforce in the MENA region may incentivize firms to invest more in their employees and improve the workforce by retraining and updating skills.

The Enterprise Surveys, conducted by the EIB, EBRD and the World Bank, provide insight into what lies beneath the region’s relatively slow growth. This is the eighth of nine working papers supporting the full report: Unlocking sustainable growth in the Middle East and North Africa private sector.