Growth through youth,” the key note of this week’s 14th Jeddah Economic Forum is in one respect a platitude. A country’s young people are its future. This is as true of Saudi Arabia as of anywhere else in the world. Yet the challenges facing the Kingdom in mobilizing its youth are often subtly different, as indeed some at the Forum pointed out.

Saudi Arabia is a wealthy country with a booming economy. The government’s dedication to the fostering of a nonoil economy, along with its extraordinary levels of investment in transport infrastructure, health and education and brand new industrial centers, has created a raft of opportunities for the Saudi workforce, particularly new entrants. Yet there are consistent signs that the Kingdom’s current prosperity is not translating into a surge of new Saudi workers.

Indeed, unemployment among Saudi nationals actually rose 1.6 percent from 10.5 percent at the end of 2009 to 12.1 percent at the end of 2012. Some analysts believe that when last year’s figures are published, they will at best show no difference but are more likely to record another rise. Given the job opportunities that are waiting in the private sector, this is an absurdity. Part of the answer to this conundrum rests in a little-noted IMF statistic published last year. The International Monetary Fund’s economists noted that in the ten years to 2010, no less than seven million jobs were created in the GCC states. The reaction to this figure ought to be ‘Outstanding!’ Unfortunately, fully 88 percent of these new jobs were taken up by foreigners. And Saudi Arabia was no exception to this ratio.

What on earth is happening here? The government has cracked down on illegal workers, in a campaign which ought to have changed the face of Saudi employment. There are legal stipulations and financial incentives for Saudi firms to employ Saudi nationals. The Kingdom has spent hundreds of billions of riyals on educating every Saudi child. Those who show the aptitude have been able to pursue their studies through higher education and beyond, being funded generously to attend international universities of the highest standard. Young people with less aptitude have been channeled into thorough-going technical academies. There, they have been taught the sort of skills, which will equip them for an artisanal or other less high-powered occupation.

Given all this, the problem that ought to have been dominating this year’s Jeddah Economic Forum was how the private and public sector could create yet more jobs for new waves of eager young people, thrusting their way into the jobs market. Instead, it was made clear that there was a disconnect between those available for work and the businesses that wanted to employ them. This was particularly true of the retail sector, which has been suffering serious staff shortages since the clampdown on illegal foreign workers.

An underlying text at the forum, mentioned largely outside plenary meetings, was that many young Saudis were either reluctant to work or lacked the sort of solid work ethic that commercial businesses require. Until now it has been the public sector that has been a consistent supplier of jobs. The very brightest and best new entrants were snapped up by organizations such as SAGIA or Saudi Aramco. The rest found often undemanding positions within the bureaucracy. Dedication to their duties within government or quasi-government organizations has been mixed, to the extent that departments are now setting up electronic attendance record keeping, to catch officials who less happy to turn up to work than they are to draw their salaries.

An inefficient civil service, which fails to deliver governmental services to society, in an efficient and timely manner, represents an economic cost to the Kingdom. The loss however may be hard to quantify. With private business, it is a very different matter. Thanks to the Kingdom’s all-important membership of the World Trade Organization, Saudi companies are having to compete on a level playing field with some of the best business in the world. The competition is tough. Profits depend on the efficient execution of deals with increasingly tight margins carried out to ever higher standards.

Labor is generally the highest cost any firm must cover. Modern businesses have little or no room for “dead wood,” for carrying employees who, for whatever reason, do not pull their weight. Saudi employers want highly-motivated new entrants, with a strong work ethic, which includes an intense pride in seeing a job well done. What is surely clear is that currently, they are simply not finding such young people in sufficient numbers. Somewhere along the line, surely within the education system, something is going badly wrong.