Abstract
This chapter uses the results of the macro and firm surveys to show the interaction between the deficient educational system and the high incidence of unskilled workers and their implications.
We find that the major reasons for heavy dependence on foreign technologies at the micro level are low levels of both skill and technology due to the deficient educational system and the high incidence of unskilled workers. We find that the deficient educational system – due to low quality of education – and the excessive share of unskilled workers has led to low skill levels, poor provision of training, serious skills mismatch, weak linkages, lack of a networks and hindered the transfer of knowledge. These factors have interacted with each other and led to poor technology indicators, poor indigenous capability to build the local technology and a heavy dependence on foreign technology. These results prove hypotheses 3.a–3.b in Chap. 1 above concerning the low skill and technology indicators at the micro–macro levels: the serious implications of the interaction between the causes and consequences of the deficient educational system and the high use of unskilled workers. We confirm hypothesis 3.c. in Chap. 1 above that the major causes of low level of local technology are low/a lack of R&D activities due to a lack of skills, transfer of knowledge, networks and collaborations between universities and industry/firms.
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Notes
- 1.
As reported by 56 % of the respondent policy makers and experts to the macro survey.
- 2.
As indicated by 100 %, 97 %, 94 % and 92 % of the respondent policy makers and experts respectively.
- 3.
As reported by 92 %, 92 % and 91 % of the respondent policy makers and experts to the macro survey respectively.
- 4.
As indicated by 87 %, 86 % and 84 % of the respondent policy makers and experts to the macro survey respectively.
- 5.
As reported by 83 % and 83 % of the respondent policy makers and experts to the macro survey respectively.
- 6.
As indicated by 79 % of the respondent policy makers and experts to the macro survey.
- 7.
As reported by 94 % of the respondent policy makers and experts to the macro survey.
- 8.
As reported by 92 %, 89 %, 89 % and 86 % of the respondent policy makers and experts to the macro survey respectively.
- 9.
As indicated by 97 %, 89 %, 89 % and 86 % of the respondent policy makers and experts to the macro survey respectively.
- 10.
As reported by 100 %, 94 %, 89 % and 89 % of the respondent policy makers and experts to the macro survey respectively.
- 11.
As indicated by about 81 %, of the respondent policy makers and experts to the macro survey.
- 12.
As in most other developing countries, the mismatch is attributed to deficiency in the educational system.
- 13.
- 14.
At the aggregate level, the educational matrix implies the distribution of population according to educational level: low level of education refers to illiterate, literate, primary and preparatory school; medium level of education includes secondary, post-secondary and below university; and high level of education includes university and postgraduate levels.
- 15.
The transfer of knowledge and external schooling effects refers to knowledge transferred from knowledge holders (high skilled workers/people) to knowledge recipients (low skilled workers/people) – cf. Cowan et al. (2001), p. 9. Knowledge in this sense refers to know how or tacit knowledge embodied in people, and is different from the broad definition of technology, which refers to both embodied and disembodied knowledge.
- 16.
Another possible explanation for the low transfer of knowledge can be interpreted in relation to the prevailing conditions within private firms. Since within private firms there may be fewer incentives for the incidence of transfer of knowledge from high to low skilled workers.
- 17.
This result is consistent with the finding of the UAE as reported by El Sabaa (1997), who notes: “It is widely observed that industrial entrepreneurs in the technically advanced projects are strictly against leakage of their technologies outside their factories. Thus, they minimally contribute to developing the technology environment in the country. This adverse impact has been amplified by the unwillingness of foreign as well as local entrepreneurs to employ local manpower, to train them in their factories, either because they doubt their capabilities, or for fear to leaking their technology secret to other competitors. The limited supply of local industrial manpower, coincided with the unwillingness to employ them in both foreign and local industries applying advanced technologies, resulted in constricting the role supposed to be played by expatriate manpower in transferring technology to the industrial sector in the Gulf region. Moreover, the large scale industries despite using more sophisticated advanced technologies, however, they minimally contribute to elevate the technology transfer to the local industrial sector, as they strictly keep their operational and managerial techniques as top confidential secrete and prevent their leaking outside their units. To some extent, the chance of their flow to the rest of the operating factories seems better in the medium size factories”. El Sabaa (1997), pp. 22, 24–25.
- 18.
The lack of transfer of knowledge can be interpreted as a lack of absorptive capacity, mainly related to deficiencies of education and continued dependence on imported technologies.
- 19.
As indicated by 97 %, 92 %, 92 % and 92 % of the respondent policy makers and experts respectively.
- 20.
As reported by 86 % and 86 % of the respondent policy makers and experts.
- 21.
As indicated by 83 % and 78 % of the respondent policy makers and experts respectively.
- 22.
For instance, the insufficient resources and facilities hindered the ability of the National Council for Training to organise training activities, and most probably lead to existence of chaos and messiness in training activities; there are 195 training institutions and the council does not know about their activities and is unable to organise them due to the lack of necessary resources.
- 23.
As reported by 51 %, 48 %, 36 % and 21 % of the respondent firms respectively.
- 24.
As indicated by 42 %, 48 % and 38 % of the respondent firms respectively.
- 25.
As reported by 46 %, 32 %, 27 %, 26 % and 21 % of the respondent firms respectively.
- 26.
These results seem consistent with the findings of the earlier studies in the UAE conducted by Nour (2005b), the UAE University (1994, 1997), Gray (1999) and Abdelkarim and Haan (2002). For instance, the UAE Education Assessment Report (1994) shows that both technical and vocational education and training provision are unregulated, uncoordinated and unplanned, while the results of the UAE University (1997) show the limited contribution to private sector training provision by both the public and government sectors. Moreover, the findings of Gray (1999) show that only 30 % of the respondent firms provide systematic training. The provision of training is selective in most cases – focused on some occupational groups, but not others – and for two thirds of the respondent firms, the provision of training was limited to on the job training. The study concluded that the UAE does not have a training-led employment culture. Employers have become used to bringing in their workers from outside the country with readymade skills and replacing them with similarly skilled workers. There has been little incentive to provide skill upgrading except in response to immediate needs such as the introduction of new technology. The local training industry has suffered from the uncoordinated nature of provision and the very limited contribution by public sector organisations and higher education institutions to this variety of provision. Most of training provision has been in low-investment, low-cost and quick-profit areas such as marketing, public relations, sales, computer awareness and management development. The private sector training is relatively undeveloped and uncoordinated, and has limited market due to both limited demand and limited supply. Moreover, the provision of public sector training is constrained by the inadequate involvement of public education institutions. For instance, the Higher Colleges of Technology (HCTs) had little involvement in the important area of adult technical education, including vocational training and retraining. See Gray (1999), pp. 15, 33, 34, 43. Additionally, the findings of Abdelkarim and Haan (2002) show that the UAE public sector training is still limited due to less attention, awareness and resources. See Abdelkarim and Haan (2002), p. 15.
- 27.
It is convenient in this chapter to briefly indicate the consequences with respect to low skill and skills mismatch at the micro level and to discuss this more fully later in Chap. 7. That serves our aim in this chapter to compare and integrate the macro–micro consequences of low skill level. This brief discussion in this chapter also substantiates the third hypothesis in Chap. 1 above about the interaction between the deficient educational system at the macro level and the high incidence of unskilled workers at the micro level and the serious implications on low skill levels and skills mismatch. It is appropriate to discuss the skills mismatch problem more extensively later in Chap. 7, where we provide a broader, more indepth and coherent analysis of skill problem and the implications of the prevalence of low-skilled workers at the micro/firm level.
- 28.
We define the mismatch as the differences between the required and actual education. Actual education refers to high (university and above), medium (secondary) and low (below secondary) levels of attained years of education that represent the supply of skills. We define the required education by the required qualifications for each of the occupational classes translated into average years of schooling that represent the demand for skills. We observe that the inconsistency between the required and actual education implies inconsistency between demand for and supply of skills, which we interpreted as skills mismatch (cf. the detailed discussion in Chap. 7 below).
- 29.
The value is measured in Sudan’s local currency, Sudanese Pounds, which equalled US$ 2.50 Dollars when the survey was held (2010).
- 30.
As reported by 5 %, 3 % 7 %, 20 %, 9 % and 5 % of the all firms, chemical, food, textile, large and small respondent firms respectively.
- 31.
As reported by 15 %, 22 %, 10 %, 17 %, 20 %, 14 % and 10 % of the all firms, chemical, food, metal, large, medium and small respondent firms respectively.
- 32.
We measured the contribution of a research unit to adapt the imported technologies qualitatively, by asking firms how the research unit contributed to adapting imported technologies. In addition to a lack of qualified workers, there may also be other factors such as a lack of incentives or pressure to adapt or master imported technologies as firms can always opt to buy the required technologies or techniques.
- 33.
This can also be interpreted as a lack of demand-pull since firms can buy all technologies or techniques. Our findings are consistent in some respects with the findings in the UAE as discussed in Nour (2005b) and Haan (1999), who notes “R&D capacity in the UAE is presently very limited. While some research is taking place at the University and other institutes of higher education, it is -as usual in such institutions – more geared towards pure science and tends to have only limited relevance for the productive sector. While the Higher Colleges of Technology place emphasis on more practical training, hardly any R&D takes place, only as a byproduct of the training. Within the private sector in the UAE likewise very few R&D activities are going on. Most manufacturing and other firms tend to rely on imported technologies (both in terms of hardware and software), as well as imported materials and even expatriate manpower. There is very little interest in carrying out research, and the R&D activities are small-scale in nature and mostly only concern minor adaptations to the companies’ own products. In all it is estimated that less than 1 % of turnover is used for this purpose. The parastatal sector, in which a number of large basic industries are operating, will do better. There is also some agricultural research ongoing. Without such R&D facilities and efforts, the UAE is almost completely dependent on imported technologies. And without the necessary adaptations to local conditions (e.g. temperatures, effects of dust and sand winds, special cultural aspects, the country’s socio-political system, etc.), even these technologies cannot be optimally applied. Moreover, a genuine technology culture to motivate the involvement in R&D and promotion of local technology is now absent in the UAE. The UAE society is geared more predominantly to non-technical education, training and employment. Technical qualifications and occupations are not rated very high by its social values and cultural traditions. The UAE only has a limited industrial tradition (e.g. trade), and lacks explicit policies to stimulate and direct technological development”. See Haan (1999), p. 37, 38.
- 34.
As reported by 6 %, 8 %, 3 %, 8 %, 6 %, 7 % and 5 % of the all firms, chemical, food, metal, large, medium and small respondent firms respectively. This includes five firms: one small chemical, one medium chemical, one medium metal, two large chemical and one large food firms applied for patents.
- 35.
As reported by 66 %, 44 %, 43 %, 40 % and 35 % of all respondent firms respectively.
- 36.
The terms “new product” and “new process” refer to new products and processes intended even just for local firms or for local markets and not necessarily for the international market.
- 37.
Short, medium and long run refers to next 3 years, next 3–5 years and next 10 years respectively.
- 38.
As reported by 71 %, 42 % and 14 % of the respondent firms respectively.
- 39.
These results are consistent with the findings in the UAE as indicated by Nour (2005b) and El Sabaa (1997), who notes “The adoption of different approaches in transferring technology differs according to certain criteria, such as: the scale of industry and its activity. Large size and some specific sectors, namely chemical and petrochemicals industries have better use of sophisticated advanced technologies”. See El Sabaa (1997), p. 21, 22.
- 40.
These results are consistent in some respects but differ in others with the findings in the UAE as indicated by Nour (2005b), El-Sabaa (1997) and Haan (1999) respectively. “The major channels of technology transfer are: joint ventures, and industrial foreign projects, the latter accounts for the first source of technology transfer. The turn-key projects are preferred channel of technology transfer in the Gulf region mainly because of the keenness to avoid defects of execution and to guarantee the maximum consistency of the project’s design, lines of production, quality of the products, facilities of training, etc. But it has very limited role in transferring technology to local industry, because it is confined to their plants, with no minimum leakage allowed. Thus they contribute nothing to implant advanced technologies in the country. Technology transfer to the UAE has obviously contributed to accelerating industrial and economic growth, elevating the standard of national products both quality-wise and quantity-wise. In particular, the transfer of technology contributed to rapid growth of local industrial sector. However, a number of negative factors are still adversely affecting the transfer of technology; the technologies transferred could hardly approach its target of constituting an autonomously developing local technological base, similar to those in the Far East industrial countries. Because of: the inadequate awareness of the end target of technology transfer, the lack of a constitutional framework or comprehensive plan for transferring technology, the insufficient local base of technological data, the lack of qualified local manpower necessary for transferring technology and the contracts of technology transfer”. See El Sabaa (1997), pp. 23–26. “The UAE is almost completely dependent on imported technologies. And without the necessary adaptations to local conditions (e.g. temperatures, effects of dust and sand winds, special cultural aspects, the country’s socio-political system, etc.), even these technologies cannot be optimally applied”. See Haan (1999), p. 38.
- 41.
Our assumption and respective findings are plausible and consistent with the results in the UAE as indicated by Nour (2005b) and the results of El-Sabaa (1997), which indicate numerous different channels of technology transfer to the UAE, such as: foreign industrial investments, offset programs, training missions, technological imports, industrialisation licenses, patents, technological products, foreign manpower and industrial consulting offices. See El Sabaa (1997), p. 26.
- 42.
For instance, according to Sudan Ministry of Investment, among the efforts that aim at promoting foreign investment, the government has issued the investment encouragement law, which grants encouraging exemptions to investors and indicates that the investor has the right to operate without a Sudanese partner. In addition, in order to promoting foreign investment the government has established free zones including: Suakin Free Zone and Aljaily Free Zone. The Free Zones and Free Markets Law (1994) represents the legislative framework for the establishment and operation of free zones and markets in Sudan. The rules resultant from this law represent the organisational framework for operating and managing free zones in Sudan. This law provides several advantages of investment in free zones, for instance the industrial, commercial or service investments, which are licensed to be established in the free zones enjoy several advantages. This includes the following: exemption of the projects from profits tax for a period of 15 years, renewable for an extra period dependant on the decision made by the concerned minister commencing from the 1 year period of grace which follows the year of commencement of production; salaries of expatriates working in projects within the free zones will be exempted from the personal income tax; exemption of products imported into the free zone or exported abroad from all customs fees and taxes except service fees and any other fee imposed by the board of Sudan Free Zones Company; real estate establishment inside the free zones area are exempted from all taxes and fees; invested capital and profits are transferable from Sudan to abroad through any bank licensed to operate in the free zone and exemption of products of industrial projects established in the free zones from customs fees; depending on materials used and local costs incurred in production, provided that the value be estimated by a committee assigned for this purpose by the board of Sudanese Free Zones Company. See Sudan Ministry of Investment: http://www.sudaninvest.org/English/Sudan-Invest-FreeZone.htm, accessed January 30, 2011. These results are consistent with the findings in the UAE as indicated in Nour (2005b). For instance, Fasano (2002) indicates that other than Abu Dhabi, the emirates have established free zones that allow 100 % foreign ownership of companies. These zones are particularly important in Dubai, where they have attracted a large number of foreign companies. See Fasano (2002), p.331. El Sabaa (1997) finds that the adoption of open market philosophy, supported by the existence of nine free zones in the seven emirates and the advantage of 100 % foreign ownership and control, encourages foreign industrial investors to set up their projects and to promote technology transfer to the UAE. See El Sabaa (1997), p. 23.
- 43.
As indicated by 83 %, 81 %, 73 %, 73 % and 65 % of the respondent firms respectively.
- 44.
For instance, from the firms’ perspective the increasing need for updating or upgrading the packing machine, the use of communication and information technology and computer technology in production for productive work and the use of production or work-related machines led to increase in production and all has increased the demand for skilled workers. In addition, the introduction of new production lines, the increasing use of modern packaging and covering machines, the use of modern (cut and wrap) machines, the use of modern tagged machines all require a high-technical skilled workers and all led to increase in the demand for skilled workers to facilitate work and increase production. From the firms’ perspective for the previous 3 years the important factors for the impact of the use of new technology on causing constant demand for skilled workers related to the use of machines is relatively new, as the introduction of new machinery reduced the number of workers. In addition, from a few firms’ perspectives, for the previous 3 years the important factors for the stability in the demand for skilled workers are due to the stability or limited increasing use of new technologies, machines and other technology-related production, that have no effect on increasing the demand for skilled workers and also because the use of the automatic packing machines motivated few firms to reduce employment. Moreover, from a few firms’ perspectives, for the previous 3 years the important factors for the impact of the use of new technology on decreasing demand for skilled workers is attributed either due to the decreasing use of machines, equipment and new technology that required the use of high skilled workers for few firms, or because the limited use of new technology replaced the use of workers because the use of new technology is easy to operate in wide areas.
- 45.
From the firms’ perspective the negative impacts of skilled workers are reported by few firms and seems to be limited; this includes for example: the potential increasing unfair and intense competition between workers that probably caused a decline in productivity; the shortage of some skilled workers that probably caused high wages and that probably caused increase in production cost, and the increasing possibility of sagging employment because skilled workers do not continue to work for a long time in the same firm and move to work in other competing firms that probably caused increasing uncertainty and instability of production.
- 46.
As indicated by 31 %, 24 % and 74 % of the respondent firms respectively.
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Nour, S.M. (2013). Assessment of Skill and Technology Indicators. In: Technological Change and Skill Development in Sudan. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-32811-4_5
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