Al-Riyadh newspaper | A qualitative shift in addressing unemployment

Absorbing national energies in the most developed and productive sectors

In recent years, the Kingdom of Saudi Arabia has witnessed a qualitative shift in the mechanisms for addressing the unemployment issue, moving beyond traditional solutions that relied on direct employment or short-term treatments, towards a comprehensive development approach based on building an economy more capable of generating and sustaining opportunities. This transformation reflects a strategic direction based on empowering the private sector to be the main driver of job creation, enhancing its contribution to economic development, in addition to expanding the base of participation in the labor market and raising the efficiency of national human capital. In this context, the importance of developing policies that are more closely linked to the needs of local communities has emerged, which contributes to achieving greater alignment between labor market outcomes and development requirements in various regions, and supports the creation of job opportunities commensurate with the economic characteristics of each region.

These transformations confirm that addressing unemployment is no longer just employment numbers, but has become part of an integrated development vision aimed at building a more flexible, efficient and sustainable labor market, capable of absorbing national energies and directing them towards the most developed and productive sectors.

Addressing unemployment in modern economies no longer depends on traditional solutions that have been associated for many years with direct employment policies or temporary initiatives with limited impact, but rather has become part of an integrated development system based on building an economy capable of creating job opportunities in a sustainable manner, and achieving a balance between economic growth and the needs of the labor market.

“Market needs”

The Kingdom realized early on that addressing the challenges of the labor market cannot be achieved through employment alone, but rather begins by building an educational and training system that is directly linked to the needs of the local economy and the changing development requirements in various regions. That is why recent years have witnessed a clear shift in reformulating the relationship between educational outcomes and labor market needs, through modernizing school curricula and introducing new specializations that are compatible with promising economic sectors, such as technology, artificial intelligence, renewable energy, logistics, tourism, and industry.

The concerned authorities also worked to expand vocational and technical training programs and support applied education paths that focus on the skills actually required in the work environment, instead of being limited to traditional theoretical education.

Technical colleges and specialized institutes have contributed to preparing qualified national cadres to work in sectors that were previously largely dependent on expatriate workers.

On the other hand, the partnership between educational institutions and the private sector has been strengthened, so that companies are contributing directly to identifying the skills required in the future, and participating in designing appropriate training programs.

This methodology helped reduce the gap between what the student learns within the educational institution and what the employer needs in practice.

This trend confirms that the Kingdom has moved from the concept of traditional education to the concept of building human capital that is compatible with the needs of the local community and responds to rapid economic transformations, thus increasing employment opportunities and enhancing sustainability in the labor market.

«تمكين وقيادة»

The shift in reformulating the role of the private sector is one of the most prominent foundations on which the Kingdom has relied in addressing labor market challenges in recent years, as the employment philosophy has moved from the traditional model, which was largely dependent on absorbing job seekers in the government sector, to a more sustainable economic model based on empowering the private sector to be the main engine of growth, and the primary partner in creating job opportunities and absorbing national competencies.

This transformation reflects a growing realization that modern economies are no longer built on government employment as the first solution, but rather on a productive economy capable of generating continuous job opportunities linked to investment and economic expansion.

To achieve this trend, the Kingdom worked to implement a wide series of economic and regulatory reforms aimed at improving the business environment, facilitating investment procedures, and reducing bureaucratic obstacles that were limiting the growth and expansion of companies.

Commercial and investment systems were also developed to create a more attractive environment for local and international investors, which contributed to increasing the number of new economic establishments and raising the market’s ability to create diverse jobs in strategic sectors such as industry, logistics, technology, e-commerce, tourism, entertainment, and renewable energy.

In parallel, the concerned authorities launched specific programs to support business owners and encourage them to invest in national cadres, by providing financial incentives, wage support programs, and employment-related training initiatives, so that the job seeker is qualified according to the needs of the actual job before entering the labor market.

This approach has helped gradually raise nationalization rates in many economic activities, and has increased the ability of citizens to integrate into specific jobs with higher added value.

«تنمية وفرص»

The Kingdom has been keen to ensure that addressing unemployment is linked to the actual needs of each region, based on the fact that economic and development characteristics differ from one city to another, and that sustainable job opportunities cannot be built on uniform solutions, but rather must arise from the local economic environment itself, according to the available resources and the relative advantages that each region enjoys. Therefore, development policies in recent years have tended to strengthen the concept of regional development, and to link economic plans to the nature of the activities and opportunities possessed by each local community, ensuring the creation of jobs that are more closely linked to the economic and social reality of each region.

In agricultural areas, activities related to agricultural production, food industries, and associated supply chains were supported, while coastal areas focused on developing the sectors of tourism, maritime transport, logistics services, and ports, while major cities witnessed a significant expansion in the technical, service, commercial, and financial sectors, along with accelerated growth in the digital economy and entrepreneurship sectors. This economic diversification has contributed to creating job opportunities that are more closely linked to the needs of local communities, rather than relying on a unified economic model that does not take into account development differences between regions.

Major projects spread across various regions of the Kingdom also contributed to moving local markets and creating direct and indirect jobs for residents, whether in the areas of construction, operation, services, or support activities that arise around major development projects.

Employment has become part of the comprehensive local development process, and not just a job separate from its economic and social environment, which has enhanced the sustainability of opportunities available to the population.

This approach clearly contributed to reducing the development gap between regions, and gave local communities a greater role in benefiting from the economic opportunities that arise within their geographical scope, which reflected positively on employment rates, raised the level of economic participation of the population, and also enhanced the stability of local communities by providing job opportunities closer to their natural environment. This experience confirms the Kingdom’s success in building a balanced development model that links the labor market to the real needs of each region, and makes economic development more comprehensive and sustainable at the level of the entire nation.

«دعم وريادة»

One of the basic pillars that the Kingdom has relied on to enhance the alignment of the labor market with the needs of the local community is the significant expansion in support for small and medium enterprises and entrepreneurship, as they are among the economic sectors most capable of creating diverse and rapidly growing job opportunities, especially in local communities that need flexible economic solutions that are appropriate to their social and economic nature, and contribute to stimulating commercial activity within cities and governorates away from relying on traditional patterns of employment.

The Kingdom realized early that this sector represents one of the main engines of any modern economy, because of its high ability to expand, innovate, and respond quickly to changing market needs.

Over the past years, the Kingdom has worked to build a more supportive environment for entrepreneurs, by facilitating procedures for establishing projects, developing regulatory systems, providing concessional financing, launching specialized programs to support innovation, in addition to developing business incubators and providing growth accelerators that help young people transform their ideas into productive and viable economic projects. These policies have contributed to the spread of thousands of small and medium enterprises in multiple sectors, including retail, services, technology, restaurants, e-commerce, light industries, and professional services, which have become an essential part of local economic activity.

These projects are characterized by being directly linked to the needs of the local community, because they often arise in response to an existing demand within the city, neighborhood, or region itself, which makes them more capable of providing jobs that are compatible with the surrounding economic environment, and giving the community economic solutions that emanate from within it.

The growing culture of self-employment and independent work has contributed to the creation of new sources of income and opened broad horizons for young people to enter the labor market through more flexible economic models, away from the concept of a traditional job linked to a single employer. The Saudi experience has proven that small and medium enterprises are not just economic projects of limited size, but have become an influential development tool in addressing unemployment, because they create job opportunities of a direct local nature, and give young people a wider space for economic participation, creativity and financial independence, and also support the building of a diversified economy that is more capable of absorbing future changes.

This trend confirms the Kingdom’s success in transforming entrepreneurship into a real development path that contributes to enhancing economic and social stability, and increases the contribution of local communities in creating national economic growth.

«بناء وتحول»

In recent years, the Kingdom has succeeded in developing a new concept of the labor market based on high flexibility and the ability to respond quickly to rapid economic transformations, so that decisions related to employment, training and vocational qualification have become largely dependent on analyzing accurate data and reading the future needs of the national economy, instead of relying on traditional estimates or temporary treatments that prevailed in previous stages. This transformation reflects a modern approach to managing the labor market, which is based on anticipating economic changes and early preparation for the jobs and skills that new sectors will require in the coming years.

The great technical development that the Kingdom has witnessed has helped in building advanced databases that provide accurate indicators of the most developed economic sectors, jobs that are expected to be in high demand in the future, and the technical and technological skills that business owners need, which has enabled the concerned authorities to design more efficient policies in directing job seekers towards areas that are witnessing actual demand, while developing training programs that are more closely linked to the real opportunities available in the market, thus reducing the gap between qualifications and the actual need for jobs.

The Kingdom has also witnessed a noticeable expansion in modern work patterns such as flexible work, part-time work, freelancing, and remote work. These are job models that have contributed to creating new opportunities for groups that did not previously find suitable opportunities, such as women, students, residents of remote areas, and those with independent skills.

This contributed to expanding the base of economic participation within society, and raising rates of participation in the labor market through more diverse options that suit social conditions and modern changes in the business environment.

This trend is integrated with the comprehensive economic transformation that the Kingdom is witnessing, as the rapid growth of new sectors such as tourism, entertainment, technology, industry, renewable energy, and logistics services has created completely different job needs than before, which necessitated the entire labor market to be reshaped to become more able to keep pace with the new economy and its changing requirements.

This transformation also contributed to redefining the concept of job, such that skill, competence, and adaptability became essential elements in building individuals’ professional futures.

This model reflects a profound transformation in the management of the unemployment file, as the Kingdom is working to build a dynamic and renewable labor market linked to the movement of the local economy and the development of promising sectors, and gives society broader opportunities to participate in development and production, in a way that achieves sustainable employment, raises the efficiency of the national economy, and enhances the Kingdom’s ability to build a more competitive economic system prepared for the requirements of the future in the long term.