The Ministry of Labour has recently announced that the private sector in the UAE must create about 100,000 jobs in the next 10 years to accommodate new citizens entering the labour market.
At first glance this, statistic does not seem overpowering, but in context you get a feeling for the magnitude of the challenge. According to the Dubai Statistics Center, one of the largest employers in the country, The Emirates Group, employed 1,571 Emiratis as of last December. This would suggest that the UAE needs to create more than six companies of a similar scale every year for the next 10 years to achieve its goals.
Such an assumption isn't entirely accurate. At present about one in 14 employees in the private sector is a UAE national, and this statistic will change naturally because of population growth and as a result of the Government's continued investment in education.
However, this alone will not meet the challenge UAE legislators face. The UAE needs to either regulate to massively increase the proportion of Emiratis in the workplace, or innovate to create massive growth.
Saudi Arabia also has a youthful population faced with significant unemployment, and the government is also looking for answers. Its first response has been one of regulation, since it has recently announced that it will not renew the working visas of foreign nationals after six years. Qatar is considering options at the other end of the spectrum; permanent residency for expatriates who hold a particular value to the economy.
An interesting parallel might be drawn between major financial centres of London and New York in the mid-2000s. Following the September 11 attacks and the collapse of Enron, the US built walls of regulation and became more introverted and heavily reliant on its own massive, but faltering internal financial markets.
By contrast the UK, with a much smaller domestic economy, opened itself up to the world, unified regulators in a more flexible approach and opened its doors to the best and brightest individuals from the four corners of the Earth.
London became a melting pot of global talent, and as a result began to eclipse New York in terms of foreign initial public offerings, equity, currency and derivative trading.
The result for native Britons was a buoyant economy, where in 2007 14 per cent of the government's tax receipts came from just 3.5 per cent of its population and new careers were forged in an environment of competition and unsurpassed global excellence. With hindsight, we all got a bit carried away, but the argument remains relevant for the UAE. If the Government seeks to create 100,000 high-value careers for UAE citizens, its relative size precludes it from relying on internal markets, but it must seek to expand its presence as an international hub and a gateway for trade and services to the GCC markets and beyond.
If it wishes to act internationally, it must be a centre of global human capital excellence, and this is only supported by attracting the best talent from around the world.
It's not just about attracting the talent, but creating the right environment and infrastructure for growth and innovation.
While the number of available jobs in the market is picking up (the Gulf Recruitment Group [GRG] placed 1.64 employees per consultant per month from March through to May this year compared with 1.04 in the same period last year), the gain seems to be thanks to a slight increase in confidence in the market and the padding out of existing departments depleted in the downturn, rather than the much more encouraging opportunities with new businesses.
Less than 2 per cent of new jobs registered with the GRG this year are based in businesses or business lines that have been operating for less than 24 months.
Much of this seems because of a lack of free cash flow to invest in new business. The capital markets remain stagnant, and huge steps could be taken to encourage liquidity, overseas investment in UAE markets, and even foreign listings simply by consolidating the exchanges in the UAE and supporting the Emirates Securities and Commodities Authority in its ambitions to create a genuine asset management industry.
This would ensure middle-class participation in capital markets, and must be accompanied by good corporate governance and transparency, which would further set the UAE apart as the destination of choice for overseas investment in the Gulf.
Currently, the US economy is struggling to create jobs through stimulus and schemes targeted at reviving the manufacturing and small and medium enterprise sectors.
Europe seems set to commit the sort of knee-jerk legislative hara-kari that so blighted the US financial markets 10 years ago.
The world is moving eastwards, and without the legacy debt and social burdens faced by the West, the UAE has the chance to create real opportunities in a globally competitive economy for its citizens.
It must choose the carrot over the stick.
Toby Simpson is the chief executive of the Gulf Recruitment Group