industry and workforce readiness -...

Clean Energy in MENAIndustry and Workforce Readiness

Clean EnergyBusiness Council

March

2019

www.cebcmena.com/

M i d d l e E a s t & N o r t h A f r i c aالشــــــــــــــــــــرق األوســــــــــــــــــــط وشمـــــــــــــــــــال افريقيـــــــــــــــــــا

2 Clean Energy in MENA Industry and Workforce Readiness

Foreword

The Intergovernmental Panel on Climate Change (IPCC) report was an urgent call for action. With 2018 as the 4th warmest year on record, we are increasingly likely to breach the 1.5°C limit, leading to extreme weather events and natural disasters. Despite the evidence, the COP24 meetings were inconclusive. The political response, once more, is ambiguous and indecisive. We need to rapidly transform the global energy mix to mitigate the risks of catastrophic climate change. We must invest in and accelerate the global adoption of intelligent renewable energy systems and clean technologies for our cities, transport systems and activities.

The need to adapt is arguably the most urgent in MENA given growing droughts and desertification, some of the highest levels of water stress in the world, intensive use of fossil fuels, rising sea levels and pressure on natural resources from high population growth. Migration to escape the impact of climate change will lead to social and political stresses. How prepared is the region to face the risks of climate change? Does it have the capacity, the knowledge, skills and human capital?

Our CEBC report, done in partnership with EY, surveys the level of preparedness of businesses and people in the region to face megatrends and highlights the large gap between the perceived importance and the perceived preparedness. To respond to the challenges, the clean energy ecosystem requires strategic direction from government, effective and enabling policies, organisational effectiveness and investment the availability and quality of knowledge and skills in the labour force, including harnessing the large potential of educated women.

The clear and positive message of our report is that the MENA region has plentiful, accessible, sources of clean energy like solar and wind, as well as large financial resources and access to technologies like artificial intelligence and blockchain, and can radically change its energy mix to enable job creation and development. There is no trade-off between decarbonisation and growth. This is a historic occasion for the MENA region to participate in the 4th industrial revolution through clean energy and technology.

H.E. Dr. Nasser SaidiChairman of the Clean Energy Business Council

3Clean Energy in MENA Industry and Workforce Readiness

Table of Contents

01 Executive Summary Page 04

02 Introduction Page 06

03 Megatrends Page 09

04 Government Leadership Page 12

05 Organisational Effectiveness Page 14

06 People in Clean Energy Page 16

07 Recommendations Page 18

08 Conclusion Page 20

09 About this report Page 21

10 Glossary and Endnotes Page 22


01 Executive Summary

Megatrends: clean energy drivers and challengesStrong forces are driving and reshaping our world and Business-As-Usual: technology is connecting us, globalisation is integrating us, and demographics are changing the size of countries and economies. These forces translate into megatrends, transformative drivers that foster paradigm-shifting ideas. Governments and business must adapt, especially businesses in clean energy which are highly responsive to megatrends.

This report focuses on the perception and level of readiness of people, businesses and governments in the MENA region to address the challenges and risks arising from the megatrends. It starts by examining how megatrends put pressure on people and organisations to adapt and become more efficient. The report then highlights the main findings of the CEBC MENA survey, which asks about importance (i.e. how relevant is this megatrend to me or my organisation) and readiness (i.e. how ready am I and how ready is my organisation for this megatrend), as well as questions related to capacity development, gender in the workplace, and professional satisfaction.

The report examines 6 megatrends: Climate change, Post-oil economies, Well-being, Urbanisation, Cybersecurity and Artificial Intelligence, and how they are perceived by individuals. It identifies key enablers that organisations in clean energy need to develop in the medium and long term, and examines these enablers in the region and the effectiveness of current policy and institutional support regarding megatrend readiness.

As megatrends are perceived differently by people in different industries and with different backgrounds, this section examines how business priorities reflect the perceptions of individuals.

Key takeaways on Megatrends Æ The perceived importance of megatrends is not translating

into readiness measures. This gap is wider regarding Climate change and Well-being

Æ Governments are proactive regarding clean energy, which can be complemented with additional support for R&D

Æ Better education increases the awareness of megatrends and their challenges

Æ Well-being should become more of a priority for organisations alongside financial incentives and business disruptions (e.g. post-oil economy).

Government Leadership: How are countries leveraging their people?This section explores how the rapidly evolving clean energy sector requires building capacity with both ‘soft’ and ‘hard’ investments: in human capacity and knowledge, and in infrastructure and logistics. Government policies, initiatives and incentives are needed to develop human capital.

Considering the importance of leveraging female talent in preparing the region and the clean energy sector for the upcoming megatrends, this section has a special focus on gender policy in the public sector.

We also highlight Morocco as a case study for integrated policy and provide insights from work carried out by IRENA.

Key takeaways on Governments Æ Government policy, such as Industrial policy, sends important

signals to the ecosystem

Æ Incorporating all talent, including women, is essential to improve a country’s readiness

Æ Further improving the working conditions for expats and nationals is key to attract and retain the MENA workforce

Organisational effectiveness: How is the workforce being leveraged?The report examines how organisations are responding to the opportunities and the challenges of megatrends, to analyse how each force affects the way organisations access and maintain their human capital, and operate their business.

Since human capital is a key enabler for organisational growth and resilience, this section reports on the effectiveness of organisational policy to attract and retain talent, and how this affects gender balance in the workplace.

Key takeaways on Organisations Æ Promoting inclusiveness in the workplace is key to retaining

young talent in clean energy

Æ Further improvement of organisational policies could facilitate the advancement of female talent in the workplace

Æ A nurturing workplace is better at retaining talent than a professionally competitive one


People in clean energy: Is optimism turning into action?The report examines the readiness of the workforce and the priorities, skill gaps, and barriers faced by people in their careers.

The report identifies the barriers to promotion and how these could reflect the low effectiveness of the clean energy ecosystem in providing opportunities for professional development. A description of a clean energy ecosystem is found on page 6.

The report explores the perceived skill gap and examines the role of formal education and on-the-job training in bridging these gaps to improve the quality of the MENA workforce.

This section of the report explores how individuals address the readiness gap through their careers and other activities, with a focus on gender. Women play a critical role both as users of clean energy and as participants in the workforce, and the survey revealed a significant difference between how men and women in the MENA region tend to perceive and respond to megatrends.

Key takeaways on People Æ Institutional support is needed to fill the gap between

organisational needs for skills and policy, and the ecosystem’s capacity to provide them

Æ Individuals need more options to improve readiness through their careers and jobs

Æ Capacity development needs to address both formal education and on-the-job training

Æ Measures to tackle the gaps in education and R&D need to be gender sensitive to capture female talent

So... what’s missing?Identified gapsThe region’s clean energy ecosystem shows great progress, but several gaps need to be addressed to tap the full potential of the region:

Policy and industrial regulation: Many governments could benefit from a more integrated policy to address all aspects of the ecosystem. Strong, clear, time-consistent and coordinated strategies would be useful.

Finance: There is a need for stronger engagement by financial institutions and for mechanisms to facilitate investment and entrepreneurship.

Technology: Access to technology is limited to projects and needs focus in building know-how in the region.

Capacity: Education, skill development and on-the-job training need focus and incentives, both for employment and entrepre-neurship. In addition, policies to incentivise female talent need to be maintained and enhanced.

Infrastructure: More collaboration is needed between the public and the private sector to identify the needs of the population and the economy, and offer relevant and high-quality services to meet them.

Research and Development: Mechanisms and investment is lacking to develop and deploy region-specific solutions, as R&D investment in the MENA region is often low.

Recommendations: What is being done around the world to fill the gap?The report ends by identifying best international practices to help bridge the readiness gaps. It looks at how individuals and organisations could tap into the opportunities of megatrends, and reap the benefits of a changing demographic structure.

It builds on existing good practices in the MENA region to provide recommendations on:

Æ how policy could help integrate and align efforts in the clean energy industry

Æ how governmental and institutional leadership could guide individuals and organisations towards a more prepared ecosystem

The report concludes by evaluating the region using the Renewable Energy Country Attractiveness Index to understand how MENA stands compared to other regions, and identify good practices that could be implemented in the region to improve its attractiveness for clean energy development.


FinanceSolid financial institutions and mechanisms that foster investment and entrepreneurship

TechnologyAccess to technology and innovation, and spaces to share knowledge and replicate good ideas

Policy and industrial regulationConsistent, reliable and enforced regulatory frameworks, that build trust and confidence among players

CapacityStrong systems for education and development, that produce skilled workforce and service provision of high quality to all players

Research and DevelopmentResources to create

knowledge, innovate, and develop new solutions for

local and regional challenges

InfrastructureAvailability of infrastructure

and access to a network of services that allows

for connected and intercommunicated players

Building blocks of the Clean Energy Ecosystem

Clean Energy Ecosystem

Research & Development

Policy & regulation

Finance

Technology

Capacity

Infrastructure

02 Introduction

Report ObjectiveThe report analyses the findings of the Clean Energy Business Council (CEBC) survey to identify the measures necessary to support the development of the clean energy sector in the MENA region. The survey was carried out between April and September 2018, and was addressed to individuals working in MENA. The report intends to build a better understanding of how ready the clean energy sector is to support the ambitions of organisations and the targets set by Governments in MENA, and to provide insights and recommendations for all stakeholders to prepare for the future of clean energy in the region.

Report ScopeThis report looks at the clean energy industry as an interconnected and interdependent network of building blocks that need to work together for the system to thrive and address the upcoming challenges. In other words, as an ecosystem, which is detailed in the diagram below.

Based on that notion, the report explores the readiness of organisations, governments and people within this ecosystem to face the risks and challenges of the megatrends that will shape the future.


200Survey respondents

70% 30%

in more than

15Countries

covering at least

15nationalities

Survey Interviews RECAI index

Desk research

Report MethodsThe report taps into the knowledge and perceptions of people in the clean energy sector to gain a better understanding on how organisa-tions, people and governments are preparing for the future.

The report draws insights from a broad survey that covered multiple countries and industries, as well as interviews with high-level experts from key institutions, such as IRENA (see box on page 12).

The outcomes are complemented with desk research on case studies and leading practices, and evaluated against the Renewable Energy Country Attractiveness Index -RECAI-, developed by EY15.

The result is a set of recommendations for organisational and public policy aimed at preparing people, businesses and governments within the ecosystem for a disruptive future.

Survey Overview

Silent Generation & Baby boomers 1925 - 1964

Generation X 1965 - 1985

Millennials & Generation Z 1986 - 2012

22%

50%

28%

Western nationalities

Asian nationalities 7%

9% Expats

Locals

84%MENA nationalities


Industries Genders Education Levels

Socio-economic Status

Age Brackets

Demographic factors

from a diverse range of demographic backgrounds

63%working in clean energy within MENA

Survey MethodologyThe web based survey consisted of a 36-item questionnaire. Descriptive statistics examined the demographics of respondents and the types of organisations for which they work. Wilcoxon signed-rank tests were used to compare the paired ratings for importance and readiness. This non-parametric test helped determine the statistical significance of different responses. Kruskal-Wallis tests were used

to identify statistically significant group differences (determined by descriptive variables in the survey) regarding gender, policy and institutional effectiveness. The Chi-Square Test of Association was used to determine group differences in the responses regarding individual contribution to Mega Trends and in the question referring to the Bloomberg New Energy Finance Outlook 2017.


What are the megatrends affecting clean energy?Megatrends refer to major transformative trends that will significantly shape the future of people, governments and organisations. Understanding and adapting to megatrends is key to long-term success1.

As shown below, these forces fundamentally change the Business-As-Usual paradigm, forcing all sectors to adapt to new risks and opportunities. This is how megatrends translate into drastic changes for the clean energy ecosystem.

Disruptive forces shape business-as-usual by increasingly constraining the environment for organisations and governments

DISR

UPTI

VE FO

RCES

GLOBALISATIONGlobal markets

Interconnec�vityMigra�on pa�erns

TECHNOLOGYAr�ficial intelligence

Lowering costs

DEMOGRAPHICSGender equality

Popula�on growthYouth unemployment

Urbanisa�on BUSINESS AS USUAL

RISKSEnvironmental

Geopoli�cal Economic

The CEBC selected six megatrends to guide the survey, considered material for the clean energy sector in the region. These included:

Climate change: The region is highly vulnerable to warmer temperatures and water scarcity.

Post-oil economies and demand for energy: Clean energy sources are abundant in the region and good progress is being made in their deploy-ment.

Health, happiness and well-being: With improving living conditions, health and happiness are becom-ing a priority for the population.

Urbanisation and demographic changes: The region is moving towards denser cities and urbanised settlements.

Cybersecurity, IoT, connectivity and analytics: A more connected region means a larger impact of cyber-threats.

Artificial intelligence, robotics and automation: As more of our everyday processes are developed by external thinking, what does the transition look like?

03 Megatrends


Respondents identified climate change as the most important megatrend regarding its impact to organisations. Businesses acknowledge that factors like climate change regulation, environmental constraints, customer requirements, post-oil development, or public health concerns, will require them to adapt to this new paradigm.

Are organisations and individuals ready to respond to the megatrends?The impact of megatrends needs to be internalised by organisations in their strategies and growth plans. 58% of respondents stated that their organisations are seeking a higher rate of growth. In contrast, 24% reported that their organisations are planning for lower or no growth, and 16% did not know.

The survey shows that the importance of megatrends has been identified by organisations and people alike but, as seen in the graph below, there is a large gap between how important a megatrend is perceived to be by an organisation, and how ready it is to handle it.

The gray line reflects the level of importance that organisations assign to each megatrend. The blue area shows the perceived level of readiness of individuals. The yellow area shows the level of readiness that individuals perceive in their organisations.

A large gap exists between perceived importance and perceived readiness for each megatrend

Climate Change

Post OilEconomies

Well-Being

Urbanisation

SecurityCyber

ArtificialIntelligence

As a rule of thumb, individuals tend to see themselves as more ready for megatrends than the organisations to which they belong, with the gap being statistically significant when it comes to Climate Change and Well-being.

This gap between importance and readiness could reflect the awareness of organisations of the gap between the anticipated market (e.g. mainstreaming of renewable energy technologies, decarbonisation of the economy, smarter urban development), and their current capacity to face these challenges.

How is the region responding to these megatrends?With vast natural resources, financial wealth and a large young population, the region can develop its clean energy ecosystem to navigate and benefit from these megatrends. The question remains whether appropriate responses will be developed.

In line with COP21 commitments and UN SDG objectives, governments in the region are setting ambitious targets10. To achieve them, the clean energy ecosystem needs to progress on several fronts to maintain the momentum in the long-term. Organisations in clean

energy have identified government policy and human capital as the most important factors to enable growth and development:

Access to skills/human capital

Governmentpolicy

Respondents were asked about the effectiveness of their governments in preparing for factors like Clean Energy, Diversification and Sustainability, Next generation industries, Smart City Thinking, and Research & Development. The one that stood out was Clean Energy.

64%rated their governments as mostly or fully effective in developing the clean energy industry

72%rated their governments as less than mostly effective in Research & Development R&D.

50% rated their governments as less than somewhat effective in Smart City Thinking

Governments were reported to have little effectiveness regarding R&D. With a growing population reaching productive age, developing their skills and investing on innovation and R&D should be a policy priority. Instead, countries allocate less than 1% of the GDP2, well below the OECD average (2.4%)3.

Those who work in clean energy in MENA tend to rate their organisation as more ready to deal with climate change, post-oil energy, and urbanisation than those who are not.

How does background affect individual perception of megatrends?The demographic and professional characteristics of respondents affect how they rate the importance of a megatrend to their organisation, and how ready it appears to them.

Employees in the Clean Energy sector (in blue) tend to rate Post-oil economy as more important for their organisation, and Well-being as less important for their organisation, than those in other industries (in yellow). Respondents anticipate the business impact of post-oil economies, but do not perceive it to be as critical as the public health impacts of a carbon-based economy:

35% of the respondents identified Government policy as a key enabler for growth, because of its role in providing a framework for the market.

1/3 identified access to human capital as the key enabler, highlighting its role in developing new skill sets to face new challenges.


Proportion of respondents that ranked a megatrend as Very Important, as per field of work

Post-oil Economies

32%

68%

Well-being

40%

60%

Clean Energy Other industries

Individuals with bachelor degrees and below rate themselves and organisations as more ready than those with Master degrees and above. This could imply lower awareness of the implications of megatrends among individuals with lower education levels and highlight the relevance of education in preparing the region.

Individuals with higher incomes perceive Well-being as less important to their organisation than those with lower incomes, suggesting that people with higher incomes often improve their well-being by their own means, and that organisations often prioritise monetary compensation over well-being benefits. As Well-being becomes more important to individuals, organisations need to focus both on well-being and compensation to attract and retain talent.

Key takeaways on Megatrends Æ The perceived importance of megatrends is not translating

into readiness measures. This gap is wider regarding Climate change and Well-being

Æ Governments are proactive regarding clean energy, which can be complemented with additional support for R&D

Æ Better education increases the awareness of megatrends and their challenges

Æ Well-being should become more of a priority for organisations alongside financial incentives and business disruptions (e.g. post-oil economy


04 Government leadership

How can governments lead the way to a ready clean energy ecosystem?Each country in MENA should seek solutions that are effective for their context. The interview and case study below show examples of different governmental approaches.

The key role of Industrial PolicyInterview with

Dr. Rabia Ferroukhi, IRENAAs leader of the Policy Unit, Dr. Ferroukhi highlighted the importance of Industrial Policy to support the development of clean energy in the region and mentioned the case of Morocco as an example of how policy can be used to leverage the development of private clean energy generation.

Another key insight is that, even though the gender employability gap is less pronounced in clean energy than other sectors, female under-representation is still an issue13. IRENA is currently conducting a global survey on gender and renewable energy to deepen the knowledge of gender issues in the industry. The link to the survey can be found in the Endnotes14.

Dr. Rabia Ferroukhi joined the International Renewable Energy Agency (IRENA) in 2011, and is currently the Deputy Director of the Knowledge, Policy and Finance Centre. She has over 20 years experience in the energy sector and has contributed in several research papers for institutions like IRENA and the Gulf Research Centre.

Tapping the potential of clean energy in MENA: The case study of MoroccoMorocco, unlike many other countries in the region, has close to no oil reserves and is highly dependent on oil imports. This elevates manufacturing costs, adding up to as much as 30% of the total. This is an important incentive to foster clean energy and move away from a carbon-based economy. The Moroccan author-ities have developed interesting mechanisms to help develop the clean energy ecosystem4:

1. Concentrated Solar Power over Photo-voltaic Incentivising a less mainstream technology that adapts better to their needs and capacities.

2. Reduced risk for investors Assigning agencies to develop performance scenarios, mobilise international financing, and guarantee minimum revenue by purchasing from the supplier and reselling to the utility.

3. Encouragement of new projects Allocating funding and competitive biddings specifically for renewable energy.10

How are governments leveraging their female workforce?The future of the clean energy industry requires inclusive policy. This means greater participation of females and their potential in the clean energy ecosystem.

Respondents were asked to rank government policies designed to leverage the female workforce according to their effectiveness. Encouraging female participation in Science, Technology, Engineering and Mathematics, and promoting healthy and inclusive work environments appears to be key:

64% rated promoting women in STEM as mostly or fully effective

60% rated protection against gender harassment as mostly or somewhat effective


Financial support was rated highest as fully effective

57% rated promoting women to leadership positions within the public sector as mostly or fully effective

Access to business resources was rated as mostly or fully effective by

59% of the female respondents

Promotion of women to senior corporate levels was rated lower than other policies

What about generations?

There is no statistically significant generational differences for government effectiveness(based on parametric tests)

Key takeaways on Governments Æ Government policy, such as Industrial policy, sends important

signals to the ecosystem

Æ Incorporating all talent, including women, is essential to improve a country’s readiness

Æ Further improving the working conditions for expats and nationals is key to attract and retain the MENA workforce


05 Organisational effectiveness

How can organisations harness disruption?Disruptive forces are becoming more pronounced and transforming the mainstream market. As this happens, organisations need not only to become aware of the coming transformations, but also to adapt and harness them on time. Technologies like blockhain or efficient energy storage could boost adaptable firms while driving others out of business1. New constraints can translate into new opportunities, and support the transformation and creation of new businesses, provided that organisations adopt flexible business models1.

The three disruptive forces that trigger megatrends, set out on page 9, affect organisations in the MENA region in many ways:

Globalisation in the MENA region has taken a turn in the past couple decades towards economic openness and regional integration, increasing migration between MENA countries, and from other parts of the world5.

For organisations, this translates into a continuous rotation of talent to attract and retain, and fluid supply chains.

Technology for the MENA region comes as an enabler for urbanisation and development through mobile internet and smart cities. On one hand, by connecting remote areas, and by supporting their growing urban population on the other6. Access in this context is critical, and access to renewables technology was highlighted by respondents as key for their future development.

For organisations this means empowered customers demanding decentralised energy and information, and a constant evolution of products and services.

Demographic change in the region is led by youth, with 40% of the population younger than 25, and youth unemployment as high as 28%7.

For organisations, this poses a unique chance to attract the right talent to the right jobs, tap the potential of women and graduates, and diversify the economy. But also depends on the ecosystem offering the right skills to support the impact of megatrends (e.g. clean energy specialists).

Key takeaways on Organisations Æ Promoting inclusiveness in the workplace is key to retaining

young talent in clean energy

Æ Further improvement of organisational policies could facilitate the advancement of female talent in the workplace

Æ A nurturing workplace is better at retaining talent than a professionally competitive one

How are organisations leveraging their workforce?Organisations in MENA are implementing policies aimed at attracting and retaining a dynamic and engaged workforce. These policies were ranked according to their degree of effectiveness:

Least effective

Somewhat effective

Effective

Investment in research Intellectual Property

Professional development Professional mobility

Continued learning Mentoring Work-life balance

Two groups rated policies toward inclusiveness as highly effective: Millennials (1986-1994), and the clean energy labour force. This means that fostering environments with cultural, gender and age diversity should be a priority for organisations that seek to attract young people and people with experience in the clean energy industry.


What about gender?

Organisations are effective at attracting women.

Less effective at retaining women

And even less effective at advancing women

Is there a balanced mix of men and women in your workplace in the MENA region?

said, overall, there are more men than women in the workplace

Maternity leave programs

Salary equity

Networking opportunities

Inclusive culture

Women quota in senior roles

Mentorship

Capacity to transfer between roles

Paternity leave

But at the executive level, this number jumps to

47%

62%

Are these policies effective to attract and retain female talent?

So what? Organisations are in the process of incorporating female talent, but need to maintain and enhance these efforts to tap into the full potential of the region.


06 People in Clean Energy

To what do individuals aspire and what are the barriers to achieving it?Although elements like training and flexibility are considered important , the overall main concern of employees around the world is competitive compensation8. This reflects a competitive professional culture, especially in the GCC region, which stimulates migration and mobility. The working population, especially in the Millennial group, is willing to move within and between countries and organisations in the quest for competitive compensation. This is challenging for the ecosystem, as it need to provide the necessary skills to a transient population and retain the skilled individuals.

Consistently, the CEBC survey revealed that, although 21% of the respondents are happy with their current role, 53% aspire to a managerial or executive role. Age and lack of experience are the main obstacles to achieving it:

Barriers to achieving an aspired role

Age and experience

Corporate or societal culture

Location

Government policyFamily support

Education

4%5%5%

13%

18%

39%

This finding is consistent with barriers identified in other regions. The 2018 New York Clean Energy Industry Report9 indicated that the top reason for hiring difficulty was the lack of technical or comparable experience. In a region like MENA, where the clean energy industry is still relatively nascent, this could mean that the real barrier behind Age and Experience (39%) is the lack of opportunities to engage in comparable roles within the region.

Another interesting finding is that Skilled Human Capital (Education, 5%) and Governmental Policy (5%) were not ranked as important barriers by the respondents. This contrasts the high rating they were given for organisational growth. In other words, the lack of reliable policy and education is a barrier for organisational growth, but not for professional growth.

This means that, even though organisations need reliable policy and skilled labour to function properly, they are still not compensating for this with stricter skill requirements or less favourable working conditions.

As megatrends make these constraints tighter, institutional support can help organisations grow in the region and attract better prepared human capital.

What are the existing workforce skills gaps?Respondents overwhelmingly identified executive skills, usually related with work experience, as the most important to reach their career goals. Technical skills, more closely related to formal education, were ranked as essential for some roles, while almost insignificant for others. This highlights the need for internship systems and on-the-job learning as well as academic background to achieve the goal of developing the region’s skills.

It also reflects the type of challenges that the clean energy sector is facing. The ecosystem is anticipating drastic changes such as climate change and post-oil economy. Hence, it requires executive skills to guide the vision, and technical skills to execute it.

Social skills and administrative skills such as management and organisational skills, were ranked as less important to individuals for the achievement of their career goals.

Definitions of the skill sets used for the survey

Technical skills

Technological skills Engineering Mathematical skills

Executive skills

Strategy

Leadership

Oversight

Directing

Social skillsNetworking

Marketing

Communication

Stakeholder engagement

Administra-tive skills

Managing processes

Organisational skills


How are individuals contributing to addressing the readiness gaps?The survey shows individuals are proactive in identifying and addressing their readiness gaps, but gender plays a role in how they contribute.

Half of the male respondents contribute to readiness through their careers and through compensated activities. In contrast, only a quarter of the women contribute to readiness through job-related activities. Almost half of the respondents (47%) approach readiness through their jobs, and only 3% are not contributing in any way.

25%of females

50%of males

47%of all respondents

are contributing through remunerated activities. Only 3% said they were making no contributions

Consistently, more women volunteer through NGOs and community service to improve readiness to megatrends, while a small percentage of men turn to similar activities.

67%of females

20%of males

contribute through voluntary activities at NGOs or through community service

As with Government effectiveness, education and R&D are not reported as being effective in increasing individual readiness to megatrends. This is particularly evident with women. Only 8% of females say they are improving their readiness by increasing their knowledge and expertise through research, as compared to 30% of males.

Key takeaways on People Æ Institutional support is needed to fill the gap between

organisational needs for skills and policy, and the ecosystem’s capacity to provide them

Æ Individuals need more options to improve readiness through their careers and jobs

Æ Capacity development needs to address both formal education and on-the-job training

Æ Measures to tackle the gaps in education and R&D need to be gender sensitive to capture female talent

Committing to gender equality: The example of Schneider Electric17 As a multinational organisation, Schneider is aware of the importance of inclusiveness in the workplace. Hanan Darwish, Cluster President of Gulf and Pakistan, recently said: “Standing up for diverse and inclusive workplaces can deliver business benefits, such as higher levels of innovation, customer orientation, and employee engagement, and lower turnover rates”. Some of Schneider‘s policies to boost female talent are:

1. Global Family Leave Policy: Launched in 2017, this policy covers employees at all levels, of any gender.

2. Gender Pay Equity Process: 85% of Schneider’s employees work in countries covered by a gender pay equity process.

3. Energy Training and Entrepreneurship Programme: Schneider is challenging gender roles by offering training on technical and entrepreneurship skills to men and women from disadvantaged communities.

So... what’s missing?Identified gapsThe region’s clean energy ecosystem shows great progress, but several gaps need to be addressed to tap the full potential of the region:

Policy and industrial regulation: Many governments could benefit from a more integrated policy to address all aspects of the eco-system. Strong, clear, time-consistent and coordinated strategies would be useful.

Finance: There is a need for stronger engagement by financial institutions and for mechanisms to facilitate investment and entre-preneurship.

Technology: Access to technology is limited to projects and needs focus in building know-how in the region.

Capacity: Education, skill development and on-the-job training need focus and incentives, both for employment and entrepre-neurship. In addition, policies to incentivise female talent need to be maintained and enhanced.

Infrastructure: More collaboration is needed between the public and the private sector to identify the needs of the population and the economy, and offer relevant and high-quality services to meet them.

Research and Development: Mechanisms and investment is lacking to develop and deploy region-specific solutions, as R&D investment in the MENA region is often low.


07 Recommenda-tions

What needs to be addressed for readiness to increase throughout the clean energy ecosystem?Our findings have shown that organisations, governments and people all agree that upcoming megatrends are important, but that current incentives and policy signals are insufficient to translate this perception into readiness measures.

Clear strategies and policies would signal the market to better align towards a common direction. With this in mind, this report highlights some measures that could help the ecosystem achieve the desired outcomes.

Policy and industrial regulation: Respondents have highlighted the need for integrated policy to support all aspects of the clean energy ecosystem. A first step could be creating dedicated clean energy agencies, as has been done in countries like Algeria and Egypt. As of now, good progress has been made in strengthening the institutional capacity regarding energy, which could be followed by similar progress in other aspects of the ecosystem10. Governmental support is also needed to support the establishment of young industries, such as clean energy.

To account for the high levels of migration in the region, the workforce would also benefit from mechanisms that facilitate moving, such as migration agreements and policy to encourage inclusive corporate and societal cultures.

Finance: The large youth population and high youth unemployment rates call for education to be complemented with mechanisms to foster entrepreneurship and investment, including relevant training. Programs are needed to support small and medium clean energy projects, both technically and financially. Countries like Tunisia and Jordan have taken steps by allocating budgets and identifying alternative sources of financing, as well as by assigning specific entities to mobilise and facilitate funding10.

Furthermore, the survey shows that many activities towards readiness are being done pro-bono, showing the need for entrepreneurship and investment mechanisms, as well as publicly funded initiatives, to encourage more involvement.

Technology: Policy can have a huge impact on which technologies are favoured in the long-term. Consequently, a systemic perspective is needed to avoid discouraging appropriate solutions unintentionally. Industrial technology policy should focus on the social and environmental performance of each technology for each case, instead of limiting the evaluation criteria to a set of technologies. An example of this diversification can be seen in Morocco, Saudi Arabia and Sudan, where feasibility studies were conducted to explore the potential of

energy resources other than solar or wind, such as geothermal, waste-to-energy and bioenergy10.

Capacity: Less education means less awareness of the challenges of megatrends. Policy aimed at improving the quality and availability of technical training is essential, as is fostering opportunities for internships and on-the-job training. This could be done through governmental programs and partnerships with the private sector, and should address entrepreneurship as well as employment. An example of a capacity building initiative for clean energy is Abu Dhabi’s Masdar City, intended to train and prepare the workforce for a new energy industry10.

Regarding female talent, related policy is slowly taking hold, but needs to be consistent in the future to exceed the current integration rate (<30%)11 . Promoting women leadership, providing support for motherhood, guaranteeing salary equity and inclusiveness, and providing networking opportunities, seem like the most effective approaches.

Infrastructure: The development of energy projects requires support infrastructure such as transportation and healthcare services for their construction and operation. Institutional leadership is needed to stimulate partnerships aimed at improving the quality and reach of infrastructure. In Morocco, for instance, institutional mechanisms leverage private initiatives with positive social and environmental value10. Other governments in the region are exploring Public-Private Partnerships as a tool for development12.

Research and Development: Governments are being effective in developing the clean energy industry, but need additional mechanisms to foster R&D and support businesses in becoming producers as well as consumers. Collaboration between the academic and the private sector needs to be cultivated to build local capacity to develop region-specific solutions. Kuwait, for example, has established research centres to explore clean energy technology and policy10.

Where does MENA stand in comparison to other regions?To understand MENA’s position with respect to the global landscape, it is necessary to evaluate how different elements of the ecosystem behave separately and how they interact.

A useful indicator for this evaluation is the Renewable Energy Country Attractiveness Index -RECAI-15. The index assesses the factors that drive renewable energy on each market, and how attractive they make an ecosystem.


Pillars of the Renewable Energy Attractiveness Index

Economic stability and investment

climate

Secure & affordable

supply, renewable energy gap

Political stability and support for renewables

Access to market, in-frastructure and finance

Technology maturi-ty and

resource availability

According to the latest RECAI report15, the most attractive countries are China, USA, Germany, India and France, while the highest MENA country in the ranking is Morocco in 12th place. Only 4 MENA countries have consistently reached the top 40 (Morocco, Egypt,

Pakistan, and Jordan) of the RECAI ranking. Saudi Arabia was recently included and is the only GCC country in the ranking, in place 39.

EU targets have supported the development of clean energy in countries like Germany and the UK, showing the importance of policy to send strong and consistent signals to the market.

Subsidy-free projects and tech-neutral auctions are appearing in countries like Germany, Spain and Ireland, showing how access to technology can be an effective mechanism to dynamise the market and improve infrastructure.

For countries like Denmark and the Netherlands, interconnecting their grids with other European countries has allowed for larger scale projects. This shows the importance of regional alliances and cooperation to leverage projects and for knowledge sharing and capacity building.

Countries in the MENA region need to address these gaps in order to be better able to attract capital and talent.


08 Conclusion

The clean energy ecosystem is highly responsive to globalisation, technological advance and demographics, as well as megatrends such as climate change and attitudes towards well-being. The MENA region has excellent access to clean energy sources like solar and wind, as well as large financial resources, and could use them as enablers for growth and development.

The MENA region is also undergoing a transition that could entail important demographic dividends as a larger proportion of the population reaches a productive age. Besides young talent, female talent can be attracted and retained more effectively in the clean energy sector.

Institutional leadership remains key to harness this young labour force through the clean energy ecosystem. Policy needs to be comprehensive, coordinated and time-consistent to send clear signals to all sectors, create safe and attractive environments for infrastructure development, and improve the skills of the labour force.

Education, on-the-job experience and better opportunities for entrepreneurship and investment need to be fostered in the region. Altogether, these measures could help prepare governments, organisations and people for the challenges of the future.

How optimistic are individuals about the future of clean energy?The New Energy Outlook, performed by Bloomberg New Energy Finance in 2017, reported that renewable energy sources are set to represent almost three quarters of the $10.2 trillion the world will invest in new power generating technology until 2040.

Respondents were asked if they believed this was realistic, and more than 65% answered yes.

Individuals acknowledge the challenges ahead, but also believe it is possible to harness these forces and transform them into opportunities for the clean energy ecosystem to grow and develop.


09 About this report

Authors and contributorsAdvisorsDr. Nasser Saidi (CEBC Chairman)Dr. Raed Bkayrat (CEBC Managing Director)Gus Schellekens (EY Partner)

Core TeamDr. Amira Khattab (DarkMatter)Laura Florez Urazan (EY)

Clean Energy Business Council Survey Project DirectorMalakeh Al Hajj (CEBC)

Project SupportLaure Alazet (CEBC)Fazil Abdul Rahiman (EY)

DisclaimerThis report has been prepared using the results of a survey developed, distributed and collated by the Clean Energy Business Council.

EY and the Clean Energy Business Council disclaim all liability and responsibility for any errors or omissions in the data and information set out in this report. The information in this report is not intended to be a comprehensive review of all developments related to clean energy in the MENA region and is provided “as is” with no guarantees of completeness, accuracy or timeliness, and without representations, warranties or other contractual terms of any kind, express or implied. No party should seek to rely on the data or information set out in this report, which is provided on a non-reliance basis. Readers should carry out their own independent verification of any data and information in this report and should take tailored professional advice when consider-ing any matters set out in this report

About the Clean Energy Business CouncilRegistered as a Not for Profit Company in Masdar City in Abu Dhabi, the Clean Energy Business Council is the pre-eminent organisation rep-resenting the private sector involved in the clean energy sector across the MENA region.

The goal of the CEBC is to establish a dialogue between the public and private sectors to drive the development of appropriate and much needed regulation and policy to support the development of this vital sector. The Council gathers leaders of the clean energy sector all over the MENA region.

About EYEY is a global leader in assurance, tax, transaction and advisory ser-vices. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

The MENA practice of EY has been operating in the region since 1923. For over 90 years, we have grown to over 5,000 people united across 20 offices and 15 countries, sharing the same values and an unwaver-ing commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplish-ments over the years, reaffirming our position as the largest and most established professional services organization in the region.

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All Rights Reserved.


10 Glossary &

Endnotes Glossary18 Awareness Having knowledge about the state and implications of a situation.

Barrier Anything that obstructs progress.

Bioenergy Energy derived from biofuel.

Business-As-Usual Traditional course of business activities.

Clean Energy In this report, energy generation that does not emit greenhouse gases.

Competitive Compensation Remuneration for a job that is equivalent to other remunerations for a similar job in the market.

Constraints Limitations or restrictions imposed by surrounding conditions.

Culture Behaviours and beliefs characteristic of a particular group. In this context, it refers to culture in a company (corporate), society (societal) or an organisation (organisational).

Cybersecurity Security intended to protect a system against damaging activity through the Internet.

Demographic Dividend Refers to the benefit that a population can reap from a change in the demographic structure.

Demographics Statistical data or characteristics of a population.

Disruption A radical change in the way an activity is conducted. In this report, it refers to emerging forces that drive transformation in the market.

Diversification The process of developing or implementing a diverse range of products or services to prevent business collapse in case of a radical change in the market.

Diversity The inclusion of individuals from different backgrounds and characteristics (e.g. genders, nationalities, socio-economic status, etc.).

Economic Openness In this context, it refers to the level in which international trade affects the national or domestic economy.

Enabler Refers to a factor that make something easier or possible

Entrepreneurship In this context, refers to emerging businesses or new companies.

Gap In this context, the difference between the current state and the objective state.

GDP Gross Domestic Product. Refers to the productivity of a country in one year.

Geothermal Energy Energy generated through the heat of the centre of the Earth.

Importance Significance or relevance of a factor.

Incentive Reward mechanism to encourage a certain activity.

Leverage In this context, the capacity to empower for a positive outcome.

Mainstream A dominant or widespread tendency.

Mechanism A structure to support and set in motion. In this report, it is often used to refer to an established framework to foster a desired activity.

MENA Middle East and North Africa

Mentorship Providing guidance and counsel to an individual to foster their development.

Migration Movement of individuals from one country to another.

Mobility In this context, capacity or ease to migrate or change job.

Momentum In this context, refers to the inertia that a trend or an activity gains in the process of becoming mainstream.

Monetary Compensation Remuneration for a job in money (i.e. salary).

Networking Activity of building relationships to exchange information.

OECD Organisation for Economic Co-operation and Development.

Paradigm A framework that contains the commonly accepted assumptions and ways of thinking of a topic.

Perception In this context, refers to the feeling or idea that individuals have regarding the conditions of their environment.

Policy An established course of action that serves as guideline for subsequent actions or decisions. In this context, it refers to a core strategy that is used by organisations or governments to guide the players towards a definite objective.

Post Oil Economies In this context, refers to the economic systems that will follow the reduction or conclusion of the use of oil-based products.

Priority Importance within a group. High-priority refers to a very material topic that should be addressed first; low-priority refers to a less material topic that can wait.

Pro-Bono Non-remunerated, non-payable

Readiness Being prepared for something. In this report, it is used as an indicator of how prepared an individual, government or organisation is to an event or a change.

Research and Development R&D Refers to the activity of evaluating and applying scientific research for its commercial use.


Smart City Refers to an urban centre that uses information and communication technologies and services for its operation.

Stakeholder A player with a key interest on how an activity is conducted.

Statistically Significant A result that is unlikely to have occurred by chance and, after being tested with statistical tools, describes a behaviour

Subsidy-Free Projects Projects that operate without governmental financial support.

Systemic perspective In this context, a comprehensive perspective that takes into account most aspects of a system.

Tech-Neutral Auctions Biddings for electricity generation in which different technologies compete against each other. It is usually used to refer to biddings for renewable energy.

Training The education or instruction that an individual receives to conduct an activity

Urbanisation Process through which the population moves from rural environments to cities, or increase the size of complexity of existing towns.

Waste-To-Energy Process of capturing energy from waste products (e.g. incineration).

Well-Being A satisfactory state of wellness, health and happiness. In this report, it also refers to work-life balance.

Workforce In this context, group of individuals in a productive age that are available for work. This includes employment, freelance work, and business-creation.

Endnotes1 The upside of disruption: Megatrends shaping 2016 and beyond, EY, 2017

2 UNESCO Institute for Statistics

3 Developing renewable energy projects, PwC, 2016

4 A shining example of green energy in Morocco, EY, 2018

5 MENA Trade & Investment in the New Economy, Mediterranean Development Fund, 2003

6 Global Findex, World Bank, 2017

7 International Labour Organization, ILOSTAT database, 2017

8 Workforce 2020: What Matters Most at Work, Success Factors & Oxford Economics, 2014

9 New York Clean Energy Industry Report, NYSERDA, 2018

10 Pan Arab Renewable Energy Strategy 2030, IRENA, 2014

11 Demographic and Economic Material Factors in the MENA region, MENARA, 2017

12 Private sector to help region bridge funding gap, Gulf News, 2018

13 Renewable Energy and Jobs: Annual Review, IRENA, 2017

14 Global survey on Gender and Renewable Energy, https://survey.eu.qualtrics.com/jfe/form/SV_eIZVZdBXXxE1YxL

15 RECAI, EY, November 2018

16 RECAI, EY, May 2018

17 Standing Up for Gender Equality Boosts Business Competitiveness for Gulf Organisations, Schneider Electric, 2018

18 Definitions in this Glossary were formulated using www.dictionary.com/

Clean Energy Business Council MENA Masdar City Abu Dhabi, UAE [email protected] www.cebcmena.com/

EY Middle East (Abu Dhabi Branch) P.O. Box 136 Nation Tower 2, Corniche Abu Dhabi, UAE +971 2 417 4559 www.ey.com/EM/en

November 2018 © 2018 Clean Energy Business Council

M i d d l e E a s t & N o r t h A f r i c aالشــــــــــــــــــــرق األوســــــــــــــــــــط وشمـــــــــــــــــــال افريقيـــــــــــــــــــا

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