(MENAFN- Muscat Daily) A recent report by the United Nations Conference on Trade and Development (UNCTAD) says underperformance of the national labour market is a major obstacle in development of innovation potential of Oman.
The report which has been prepared following a government request says three key areas require attention of officials. They include development of national human resource national IP system and economic diversification. If these issues are left unaddressed they could hamper the development of a functional national innovation system.
Currently the country is maintaining its growth at a satisfactory level of over four per cent a year states the report. However it points out that many new jobs have been filled by lower-cost imported labour which may pose a serious challenge to resolving the issue of domestic unemployment.
Furthermore growth based on large percentage of imported low-cost labour can be a strong disincentive to innovation and technology-based growth and economic diversification.
Omanisation can be a positive factor for innovation if the increased employment of Omanis in firms and industries is matched with improved productivity business sophistication and eventually innovation. However much remains to be done in linking the educational system with industry requirements so as to produce a workforce that has the skills needed by firms.
The UNCTAD report says that Oman may be characterised as being simultaneously a labour-shortage and a labour-surplus economy. Shortages arise because private sector employment opportunities are growing faster than Omani human skills and capabilities. A surplus arises simultaneously as many Omani nationals are reluctant to accept offers of employment in the private sector in the hope of switching to the government sector.
The labour market mainly suffers from two basic imbalances. The first is that Oman's education system produces too many graduates in humanities and liberal arts and a clearly insufficient number in technical and scientific fields. The second is that Oman's growing economy and relatively open job market attract foreign labour with qualifications up to secondary school level; people who are willing to work for less than the prescribed minimum wage for Omani nationals. The policy solution so far has been to hire excess graduates for public service jobs and through the Omanisation process to encourage private firms to employ an increasing numbers of Omani nationals.
The report further states that a policy priority should be to reduce university enrolments in non-vocational studies while placing greater emphasis on education and training institutes to increase the production of expertise needed by firms and industry. Achieving this requires active interaction between industry and educational institutions. The government and its education authorities should offer opportunities for studies in non-vocational disciplines only if they are prepared to provide public sector employment for graduating students.
The report reveals that a great majority of jobs in the private sector in Oman are held by non-Omanis and are concentrated in semi-skilled and skilled occupations where wages are fairly low. The general preference for public sector jobs that offer better wages benefits and working conditions diminishes progressively as people move up the wage education skill and experience ladder. There have been proposals to bring remuneration in the public sector in line with that in private firms. However a more realistic policy target would be to restrain future increases in remuneration.
The UNCTAD mission observed that linkages between labour and technical education and training are underdeveloped and that the technological needs of economic sectors vary widely.
It is difficult to link higher education to innovation when incubators established at technical colleges cannot find firms interested in cooperating beyond some involvement in the design of curricula. The report says that even simple activities such as placing students in internships in companies seem to be a challenge as there are no legal obligations for firms to offer internships.
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