On December 17, 2010, after having his produce confiscated by the police, Mohamed Bouazizi, a 25-year old Tunisian street vendor set himself on fire, causing his death, and unleashing massive street riots that quickly spread first across Tunisia, and then to several other North African and Middle Eastern countries. This desperate act by a young man who could support his family only by selling fruits on the street, turned out to be the catalyst of what became known as the “Arab Spring”. This act also illustrated in dramatic fashion the desperation and hopelessness of large numbers of young people across that very sensitive region.
After much turmoil, pain, and suffering in the region, and the physical or political demise of several leaders, including Gaddafi in Libya, Mubarak in Egypt, and Ben Ali in Tunisia, the root causes of the Arab Spring have still not been addressed in any meaningful way. A key root cause is the endemic youth unemployment in the region – at about 30% the highest rate anywhere in the world. In a region where almost 65% of the population is under 30 years old, this is a massive problem. Every year, about 5 million new people in the region enter job markets that are unable to provide decent employment to often well-educated job seekers. This only expands the ranks of millions of discontented young people with no future and no hope, creating a ticking time bomb. A key lesson of the Arab Spring is that the youth unemployment ticking time bomb eventually explodes.
Even though the reasons behind the current mass demonstrations in the North African country of Algeria are multiple (more democracy and freedom, change of leadership, honest governance, etc.), lack of job opportunities for the young is a core motivator. Lead by young students and unemployed or underemployed youth, these massive and miraculously peaceful demonstrations – now in their fourth week – have shaken the current regime of ailing president Bouteflika to its core. Whether these mass demonstrations will spread to other MENA countries – as the Tunisia unrest did – is an open question.
For any hope of long-term stability in the MENA region, the youth unemployment ticking time bomb has to be addressed in a consequential way. It is now recognized that the usual ways of creating jobs for the youth through government programs or the private sector will not be enough. New, more creative job creation models are also needed. Social entrepreneurship, a business model that combines a social mission (such as employment creation) with proven market-based principles may be one new and promising approach to creating sustainable jobs. This new business model has been gaining popularity in recent years. An example of a successful social enterprise is Education For Employment. EFE’s objective is to “help young women and men through demand-driven training programs that link them to the world of work while creating opportunities for them to develop their professional skills, build social capital and engage in their communities” (https://efe.org/en/about/overview/). EFE is now active in eight MENA countries.
With millions of new job seekers added every year, the scale of job creation is a critical factor in MENA countries. This is where franchising can play a significant role. Franchising is a business model where the owner of a product or service (the franchisor) grants the right and support to independent third parties (the franchisees) to conduct business under its brand name and methods. Franchising is a powerful business model that creates and grows small and medium-size businesses and helps generate large scale employment. In the United States – where modern franchising is the most developed – franchising was responsible for 16.1 million jobs in 2016. According to the International Franchise Association, franchised small businesses grow at a faster rate and create more jobs than other businesses.
An aspiring young entrepreneur can start an independent business or join an established franchise network as a franchisee. In most MENA countries where the entrepreneurial culture is not deeply rooted, franchising is a compelling model for the youth. Because the young franchisee “is in business for himself but not by himself”, he does not necessarily need entrepreneurial and managerial skills and experience. The attractiveness of the franchising model is that it can offer the young franchisee the information and tools necessary to successfully operate a business: operations manual, marketing plan, training, ongoing technical and managerial support, in addition to an established brand name.
A sensible job-creation policy for MENA policymakers is to promote franchise businesses by encouraging the expansion of local successful enterprises into franchise networks. Providing financing and technical support would encourage young entrepreneurs to become franchisees and business owners – and job creators. International franchises could also be encouraged to open and expand operations in these countries, sharing their know-how, and helping develop franchise networks with local franchisees. Successful social enterprises can multiply their impacts by franchising their operations.
However, for entrepreneurship and franchising to flourish and meaningfully contribute to tackling the youth unemployment challenge, MENA countries have to undertake major institutional reforms. Most MENA countries have unattractive political, legal, and regulatory environments, making it difficult to start and expand new businesses. Necessary reforms include respect for the rule of law, more transparency in business dealings, combatting corruption, and less bureaucracy, among others. It is worthwhile to note that many of these reforms are also part of the demands of the demonstrators in Algeria now and of the Arab Spring of the early 2010s.
Though by no means the only ways to address the daunting youth unemployment challenge in the MENA region, entrepreneurship, franchising, and particularly social entrepreneurship and social franchising, can help create opportunities and hope for millions of disillusioned and restless young people. They could help transition to a region where the youth can believe in a future of hope and opportunity – thereby peacefully deactivating the youth unemployment ticking time bomb.