L arge, educated labour pools have contributed to a bloated public sector throughout the Middle East and North Africa (MENA). According to the Organisation for Economic Cooperation & Development (OECD), the World Bank (WB), and the International Monetary Fund (IMF), MENA public sectors employ between 14 per cent and 40 per cent of all workers in the region. Historically, the public sector served as a political solution to the economic problem of unemployment. Entrepreneurship programmes that support small to medium enterprises through financial and technical support are one long-term solution for addressing excess labor capacity, but they require investment in the private sector and can offer little in the short term. Meanwhile, MENA fiscal budgetary commitments have increased and public sector employees are retiring, collecting ever-dwindling pensions even as life expectancies increase.
The future of the MENA region requires a creative solution to transition public sector employees into the private sector in order to promote balanced economic growth. The private sector cannot create employment opportunities in the short term without intermediary forces – such as foreign investment, regulatory reform, and skills development – so a medium-term approach is needed to draw down public sector employment. We propose an approach known as ‘intrapreneurship,’ which has produced continued gains for both the private and public realms. Canada, the US, and Egypt offer examples of successful intrapreneurship examples.
What Is Intrapreneurship?
Intrapreneurship is characterised by the ‘start up’ style of management, characterised by flexibility, innovation, and risk-taking. The objective is to circumvent bureaucracy and fast-track private sector development by harnessing or taking advantage of new opportunities and new processes or designs.
Intrapreneurs work from within an institution, providing their expertise to that institution rather than to an external party. The success of Google, LinkedIn and Dreamworks, for example, is due to their ability to embrace intrapreneurship: offering time and resources to employees who demonstrate creativity and initiative. Intrapreneurs can enhance efficiency and productivity in large organizations (Forbes, 2012). For instance, intrapreneurs within the Sony Corporation worked to produce sponsored search engines via Yahoo, Scion17 free Internet radio, and, most impressively, the Sony Playstation.
Many global non-profit hold contests to invest in innovation and the talent behind it. Emerging market economies, like Brazil, are key competitors. However, the 2012 Ashoka contest, co-sponsored by the International Finance Corporation (IFC), provides a telling example of the need for Arab countries to enhance their participation in intrapreneurial practices: as of December 15, only one of 77 contest entries were from the Arab world.
Both the U.S Department of Justice (DOJ) and the U.S. Government Accountability Office (GAO) promote a culture of intrapreneurship within their organisations. DOJ and GAO operate “Employee Suggestion” programmes whereby ideas that promote institutional efficiency are recognised by the organisations’ leadership. The GAO offers mentoring programmes that give budding intrapreneurs the opportunity to explore ideas and receive critical feedback. The increased dialogue created through shortterm placements and online sessions allows employees to enhance their skills and knowledge base.
Intrapreneurship rewards both the individual and the institution; even if employees enter the private sector, the institution can claim success in “spawning” new business entities. Multiply this scenario across several institutions over ten years and the result is a generation that has contributed its talent to both the public and private sector.
Intrapraneurship benefits the larger organizational culture by increasing employee satisfaction and productivity. And once employees – including civil servants – realise they can pursue ideas within a supportive environment, they often do so in innovative ways.
There are four key benefits to facilitating intrapreneurship within the MENA public sector:
Transition out of public service
Intrapreneurship provides a desirable alternative for those in public service who face early retirement. The cost of investing in public-sector intrapreneurship initiatives can offset the cost of the benefits civil servants collect upon retirement.
The end of entrepreneurship stigma
Jumpstarting entrepreneurship in MENA is a challenge. There is a pronounced stigma to being an entrepreneur in the MENA region. In Egypt, “failed” entrepreneurs can face criminal charges. Also, much of the population is over the age of forty and believes that it has entered a stage of life in which it is too late to assume entrepreneurial risk. Finally, even if donor-supported initiatives like Jordan’s ICT group promote entrepreneurship, public-sector employees are unlikely to leave safeguarded jobs.
But the stigma against entrepreneurs may not extend to intrapreneurs once certain conditions are met. First, given that many MENA countries are also emerging market economies, intrapreneurial programs must come from within, so that institutions can claim ownership of the program, even with support from outside partners. Shared ownership is key to addressing the impression that these are externally imposed reforms. Secondly, the problem for intrapreneurs is that their “enterprising” ideas may appear to challenge public sector traditions and achieve little traction. Therefore, implementing an intrapreneurial programme within institutions allows participants to contribute without managerial obstacles.
Promotes skills sharing at universities
In 2012, Saudi Arabia ranked 12 out of 183 economies in the “Ease of Doing Business Index”, achieved in part by the country’s ability to harness the entrepreneurial efforts of its Dhahran Techno-Valley (DTV) effort. DTV operates as a partnership between a university and multi-national corporations to develop offshore R & D centres: Within five years, the partnership led to a specialised technology sector hub where employees innovate from within.
Skills sharing at universities can use personnel structures already in place for employees who wish to pursue professional development opportunities. Large personnel structures exist in many MENA government offices – and have overlapping job functions that allows them time to engage in knowledge transfer activities. Mid-level career U.S. GAO employees have accumulated specialised knowledge this way. Although it may not qualify them for senior management positions, they can use their new-found expertise to serve as adjunct faculty at universities.
Helps latent women and youth into work
MENA’s public sector’s uptake of intrapreneurship relates to two groups that are crucial to increasing growth in MENA economies: women and youth.
Women in Egypt and Tunisia attend school longer than men, but are often restricted from entering the formal economy. Women make up 14 per cent of Jordan’s workforce, among lowest rates in the world, according to Minister Reem Abu Hassan. Consequently, many women disengage from the workforce once they marry.
If women and youth in MENA are not tapped as a potential resource, countries like Oman – which has a shortage of scientists and engineers – will have to continue importing skilled expatriate labour.
Unlocking Potential — Intrepreneurship in MENA
Intrapreneurs will be crucial to modernising economies throughout MENA.
In 2011, Ernst & Young Financial Services partnered with Endeavor – a global not-for-profit organisation – to launch its Intrapreneur Programme. The programme allows Ernst & Young’s top-performing managers to carry out six-week placements at companies within their home countries – many of which are emerging market economies in the Middle East (Egypt, Jordan, and Lebanon).
According to Endeavor Egypt participant Amr Shady: “Participants in the programme have a skill set that we – as entrepreneurs in the Middle East – don’t have. Their knowledge and experience can help us navigate the threats and risks we face each day, while enabling us to pursue the growth opportunities that will transform our companies and countries.”
Indeed, when employees explore inventive opportunities, they bring fresh perspectives to business challenges. For MENA, this approach is key to mainstreaming entrepreneurial practices, both in the public and private sectors.