The UAE is an interesting case study in human capital, in part because there are few places in the world where you will find a predominantly expatriate workforce. While the economies of this and other oil-rich countries are still robust, the long-term effects of relying on transient foreign talent could very well derail progress for future generations.
This thorny subject was one of the talking points at a panel discussion 'Learning in and from the Arab World' involving leaders in the private and public sectors, at the Insead Leadership Summit Middle East.
"We did some forecasting with the UAE, maybe a year-and-a-half ago, before the real financial crisis hit. And the forecast said the UAE needs about a quarter of a million skilled people a year to help the economy keep growing," said David Arkless, President of Corporate and Government Affairs, Manpower Incorporated, the largest employer in the UAE outside of government.
The UAE is going to be unable to produce enough children "to fuel that economic growth. So, therefore, there are a couple of givens here. And one of the big givens it that this region will always depend on immigrant labour to a certain extent", Arkless told Insead Knowledge.
Take the oil and gas sector, for example, which too is experiencing a brain drain.
According to Sultan Al Hajji, Deputy General Manager of oil and gas company Total Abu Al Bukhoosh, this sector will lose 40 per cent of its skilled engineers in the next five years because workers are leaving faster than they are coming in.
That shortfall in local talent, says Sherif El Diwany, Director, Head of Middle East and Arab Business Council, World Economic Forum, should not be viewed as a threat but rather as an opportunity. "I think it's important that any country, anywhere in the world, if it wants to succeed, then it goes for the best talent, it buys the best service anywhere in the world. There's absolutely nothing to be ashamed of or be worried about in that sense. And therefore having an expatriate labour force is not a problem," he said.
Countries, El Diwany added, should instead concern themselves more with being able to attract the best talent in the world regardless of nationality, by providing them with a high standard of living for their families – because a happy workforce is also a productive one.
While Abu Dhabi's leaders have also acknowledged that foreign talent has indeed helped spur its economic growth, they have come to appreciate that the issue lies not so much in retention of that talent, but in the transfer of knowledge to the locals when the expatriates are long gone.
"This country has been, from the '70s, benefiting from foreign expertise, and is still doing so for realising all of its vision. Even in the modernisation process that we went through in the past four years, the focus has been institutional because we had that leverage of that foreign expertise and we're still keen on maintaining that," said Ali Al Ketbi, Assistant Secretary-General, Public Administration, General Secretariat of the Abu Dhabi Executive Council. "What we lack is that mechanism which transferred that knowledge and then institutionalised it, so it is benefitted on individual and organisation, and the community at large."
That transfer of institutional knowledge – or the know-how to do it – is where the panellists believe schools such as Insead have a pivotal role to play.
"This region, if it wants to grow economically, is stuck with the requirement for foreign labour," said Arkless. "The question is how do you manage and framework that foreign labour?"
El Diwany said: "I think you need to look at the knowledge capture of the institution. And this could be an area where institutions like Insead and others that are present here could focus and assist in helping public institutions deal with that challenge.
Arkless shares that view: "One of the roles that an organisation like Insead could play is to provide longer-term research, development, an intellectual think-tank that could change not just scientific or management things for the future, get a new mentality, but can change policy practice from where it is today to great ideas."
Al Hajji said: "Insead is a catalyst for an exchange of ideas, exchange of culture, as a bridge of two cultures between the West and East. Let's use this culture that it benefits all of us."
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