The right people
Over the past couple of decades, one the main challenges that the technology sector has faced globally relates to bridging the IT skills gap. The pace of technological advancements and disruptions has continuously left companies with the need to update their employees with the latest IT knowledge. Similarly, education institutions are constantly pressured to keep their IT curricula in line with the latest needs of the labor market. Cisco’s investment in Saudi Arabia presents an interesting case of how a multinational company has successfully partnered with government institutions to address this challenge and secure the human capital required to fuel the needs of businesses and organizations in the digital era.
Cisco is the world's largest networking company, with more than a 50% share of the total worldwide switching and router market. It is estimated that over 80% of the world’s internet traffic running on Cisco’s networks. The company entered the Saudi market just thirteen years after it was established in the US in 1984. Since that time, Cisco's relationship with the Kingdom has evolved from being a provider of hardware and product services to become a government partner and a trusted advisor in the fields of technology education and training, cyber security, as well as IT and telecommunications infrastructure and the digital transformation of healthcare, among other sectors.
When Cisco came to Saudi Arabia in 1997, the Kingdom’s IT infrastructure development was in its very early stages. At the time, Saudi Arabia had a fixed telephone penetration of 9.8% compared to 63.3% in the US. Mobile cellular subscriptions stood at 1.7% in Saudi Arabia and 20.1% in the US. IT was a quickly evolving field, and what students learned during their education often became outdated by the time they graduated and began to seek employment. Therefore, the biggest challenge Cisco faced when entering the Saudi market as a thirteen-year-old company was the mismatch between the certifications and qualifications being offered in local education and the needs of employers.
In that vein, the challenge of finding human resources with the required IT skills did not just lie in the technology sector. Cisco traditionally outsources many of its non-core needs such as logistics, human resources and finance. Coming in the early days with a nascent Saudi ecosystem, these human capital needs were also scarcely met by the market, especially on the tech-integrated level that Cisco's operations demanded.
Partnering with the government to build the workforce of tomorrow
To address this skills gap, Cisco began to expand its scope from being a provider of products, services and technology solutions to one of training and human capital development as well. In 2006, John Chambers, Cisco's former Executive Chairman and CEO, came to the Kingdom at a time when the country had started to increase its focus on developing its ICT infrastructure and capabilities. Interestingly, Saudi Arabia had surpassed the US in terms of mobile penetration, with a rate of 77.6% compared to 76.3% in the US, although Internet usage had at the time reached 68.9% in the US, but still stood at 19.5% in Saudi Arabia.
Chambers signed a memorandum of understanding with the governor of the Technical and Vocational Training Corporation (TVTC) to embed Cisco’s Networking Academy courses into TVTC's computer science academic program. TVTC is a government training institute that links Saudi vocational students with employers who have employment opportunities but insufficient technical talent, with branches in all major Saudi cities.
With a “train the trainer” model, Cisco brought their training programs to TVTC and other partners, therefore gaining access to a larger number of Saudi students than the company could reach alone. Since launching this program, Cisco has had almost 100,000 students graduate from the program, creating a huge pool of talented Saudis for all employers in the technology ecosystem, and beyond.
In parallel, Cisco invested in its in-house training capabilities. Since 2005 Cisco has had associate programs where they send employees to Europe for training, and since 2009 they have run internship programs designed for Saudi IT students. In the Kingdom, Cisco also started to apply the on-the-job training and shadowing strategy that is applied in Cisco globally.
To encourage diversity and address the gender divide that affects the tech sector internationally, Cisco has also launched several initiatives for training female Saudis. In 2010-11 Cisco Saudi Arabia had one of the highest percentages of female employment across all of their emerging markets branches.
A sea of talent
Currently, Cisco boasts a Saudiization rate higher than industry average and is able to flexibly hire and train new resources in line with the projects and customer demand. At its highest, the company achieved nearly 60% Saudiization in 2015 when the ICT sector overall rate stood at 50%.
Their experience stresses the importance of having a long-term vision and commitment to the local economy which enables viewing training as an investment rather than a cost. Saudi employees see the value in coming to work with a reputable international company, while the offering of training and professional development facilitates retention and reduces staff turnover.
Today Saudi Arabia is one of just 15 countries that Cisco has chosen for its Country Digitisation Acceleration (CDA) programme, a global initiative with the breadth and scope to drive economic growth and create next-generation jobs through digital adoption at a country level. The CDA program is a long-term partnership with national leadership, industry and academia to help set the agenda for countries with deep commitment to digitisation. Crown Prince Mohammed bin Salman's philanthropic organisation dedicated to the development of Saudi youth, MiSK, has raised digitisation awareness by advocating for the importance of learning to code.
The government drive is based firmly on job creation and an understanding of the economic impact tech skills can have. During the Crown Prince's visit to Silicon Valley in 2016, agreements were signed between several Saudi organizations and US tech companies including Cisco to develop digital infrastructure in the Kingdom. As a result, the company is currently working with the government on digital transformation projects in the fields of healthcare, education and smart cities.
The framework for the future
Saudi Arabia is a very different country than the one that Cisco entered in 1997 and John Chambers visited in 2006. In 2016 internet penetration was at 74% in Saudi Arabia and 76% in the US, with Saudis ranking among the world’s most active users of social media. Among other targets, the Kingdom’s Vision 2030 aims to take internet usage to the next level and achieve 85% active users by 2020.
In terms of education and training, Vision 2030 features a number of initiatives aimed at bridging the skills gap that companies like Cisco have long been working on. The Vision pledges to “offer preparation and training to those unable to find employment so they can smoothly join the workforce whenever possible,” and to “redouble efforts to ensure that the outcomes of our education system are in line with market needs”. This includes the launch of the National Labor Gateway (TAQAT), a labor gateway already soft-launched that connects private- and public-sector employers with employees who match their needs, offering services to both and facilitating training throughout employees' careers. The Vision also mentions a focus on advanced technologies and entrepreneurship as top priorities for training.
Under the National Transformation Program (NTP), the first executive program of Saudi Vision 2030 with specific goals established for achievement by 2020, the Ministry of Communications and Information Technology (MCIT) has pledged a $3.9bn budget from the government to carry out various reforms and training initiatives. The launch and activation of ICT training centers in partnership with major of ICT companies will itself receive a budget of $8.9m. The MCIT targets to rehabilitate and employ 20,000 Saudi cadres in the ICT sector by 2020.
Under other ministries, $2.3m will be spent to activate a career training program for graduates and job seekers in ICT companies, in addition to other spending on vocational training colleges and a national program for e-training of government employees among many other training initiatives. While 7% of high school graduates then go through TVTC's training programs outlined above, this proportion is targeted to be 12.5% by 2020.
In a promising move for the future of the ICT sector, Abdullah Alswaha was appointed the Minister of Communications and Information Technology in April 2017, after twelve years as the Managing Director of Cisco Saudi Arabia. The move was lauded as one of many signs in the last two years that the top leadership of the country will continue to put a greater priority on technology and the immense potential it has on positively impacting society and the economy.
- Riyadh - Jeddah - Dammam
- ICT Advisory & Training
- Information & Technology
- United States
Country of Origin