Boosting human capital to benefit the country

(File photo: Ameer Khalifeh/Jordan News)

Hamzeh S. Al-Alayani

The writer is a board member of a Jordanian public-sector government investments management company and a regular commentator on regional energy and industrial matters.

Jordan’s population of 10.8 million is young, as 70 percent are younger than 35. The Kingdom invests significant resources in education and skills development: nearly 10 percent of the government’s budget ($1.6 billion) is devoted to education.اضافة اعلان

The country’s human capital resources will be pivotal to securing Jordan’s future economic and geopolitical potential. As such, and as with other national priorities, the government should concentrate significant resources toward boosting the productivity and capacity for innovation of the workforce.

Investment in human capital is a significant driver of growth for modern economies; it supports key technology industries and unlocks scientific discoveries.

According to the World Bank, human capital consists of the knowledge, skills, and health that people invest in and accumulate throughout their lives, which enable them to realize their potential as productive members of society and gain various economic and non-economic benefits.

Jordan placed 102-nd, out of 191 countries and territories, in the Human Development Index  issued by the UN Development Program (UNDP), maintaining its ranking for the second year in a row. Jordan’s classification remained in the category of “countries with high human development”.

The number of employed Jordanians has decreased from 1,465,746 in 2017 to 1,338,308 in 2020. As a result, the number of unemployed has increased from 329,114 in 2017 to 404,105 in 2020, or by about 23.0 percent. Jordan needs to close the gap.

Jordan is home to 10 public and 21 private universities, with more than 267,000 undergraduate and 18,000 graduate students. Jordanian universities provide a diverse spectrum of academic programs, of which 35 percent are in business, accounting, economics, engineering, and computer science.

Increasing investment in higher education creates pathways to promote specific in-demand skill sets, particularly in science, technology, engineering, and mathematics. With increasing investment in the country’s higher education system, policymakers should institute targeted programs to create university talent pipelines for specific skill sets, such as logistics, cybersecurity, manufacturing, and AI expertise.

After decades of brain-drain of top talent, Jordan should work to reverse the flow to achieve brain gain from the rest of the world. The government needs to incentivize foreign-educated citizens to return to the Kingdom to plug skills shortages and create a diverse environment for innovation.

Jordan needs to improve its capacity to cultivate, attract, and retain human capital. Its national talent could help it become more competitive, make it a regional power, and have an impact on innovation and talent in the region. Another dimension critical to enhancing national competitiveness is the country’s ability to retain domestic talent.
After decades of brain-drain of top talent, Jordan should work to reverse the flow to achieve brain gain from the rest of the world.
Global trends show that higher education in Jordan should focus more on preparing students for a changing and dynamic world that knows the requirements of the labor market. Universities need to move from indoctrinating to teaching students how to think and how to learn.

The government should also act as a partner by focusing on developing high-quality human resources through education and skills, on-the-job training. Organization needs to embrace skills training, as trained workers can increase the productivity of their companies.

Indeed, if Jordan’s human capital grows, it will generate new jobs in different sectors and diversify the contribution to the GDP. In this context, government needs to focus on realizing economic growth and creating jobs. It should equip the youth with the elements of success and ensure that those with bright ideas have access to finance.

Growth in the digital economy provides an opening to invest in Jordan’s human capital to meet new demands. There is an opportunity for Jordan startups to capitalize on it and become an offshoring and outsourcing hub for export services. This would also lead to greater economic integration in the MENA region, helping to capture the growth momentum in job-rich areas, a vital source of growth for small, open economies like Jordan’s.

Manufacturing is the fourth-largest sector employing Jordanians (10.4 percent). The industrial sector should attract the attention of all stakeholders, including the government.

Jordan also needs to restructure the mining sector to attract new foreign direct investment, increase its competitiveness and level of production, and thus its exports and contribution to the local market. These investments could then generate sufficient employment opportunities.

Hamzeh S. Al-Alayani is a board member of a Jordanian public-sector government investments management company and a regular regional energy and industrial commentator.

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