World Bank approves US$15m grant to help Palestinian IT sector create more jobs

“The IT sector has the potential to make a strong contribution to economic growth. It can offer opportunities to Palestinian youth, who constitute 30% of the population and suffer from acute unemployment,” said Kanthan Shankar, World Bank Country Director for West Bank and Gaza.

The World Bank has approved a US$15 million grant to improve sustainable economic opportunities for much Palestinian youth through the information technology (IT) sector. The new Technology for Youth and Jobs (TechStart) Project aims to help the Palestinian IT sector upgrade the capabilities of firms and create more high-quality jobs.  

“The IT sector has the potential to make a strong contribution to economic growth. It can offer opportunities to Palestinian youth, who constitute 30% of the population and suffer from acute unemployment,” said Kanthan Shankar, World Bank Country Director for West Bank and Gaza. “There are more than 3,000 IT graduates every year from Palestinian universities, and most of them do not have a job. Moreover, the sector is less vulnerable during crises and can accommodate remote work during times like the COVID-19 pandemic or other restrictions on movement. This new project is part of the World Bank’s strategy to invest in a stronger entrepreneurship ecosystem for job creation.” 

More than a quarter of working-age Palestinians were unemployed even prior to the COVID-19 crisis. Youth unemployment stood at 37% in the fourth quarter of 2019 and alarmingly at 61% in Gaza. Palestinian women’s participation in the labour force is the lowest in the MENA region, mainly because of mobility restrictions. 

The IT sector has the potential to be a source of economic growth and employment. Demand for IT services has increased significantly in the Palestinian territories, and there is a growing trend toward IT outsourcing. The new project will tap this potential source of job creation and address the constraints on its expansion in the Palestinian territories while helping develop an ecosystem that spurs innovation and research and development.

Given that the IT sector relies primarily on technology and skilled human capital, the project will encourage companies to invest in these areas, thus addressing impediments to the supply of high-quality IT services. It will target firms and individuals that need upskilling to better meet the needs of clients. The project will also provide seed grants to stimulate private investments in the sector, including research and development.  Private sector actors will have the opportunity to invest in new IT firms, training, or human resources services. 

The project will also stimulate the demand for Palestinian IT services by attracting foreign direct investment, fostering partnerships with global tech companies, and improving market access. It will help diffuse information abroad on market opportunities in the Palestinian IT sector. This is even more critical in a fragile and conflict-affected environment that often struggles to attract investment. With awareness-raising, the project seeks to expand opportunities and broker new deals. The IT firms will not only benefit from new incomes but will also be exposed to new know-how in technology and marketing their services. 

“The outlook for the Palestinian IT sector is promising if the right actions are taken,” said Iulia Cojocaru, World Bank Senior Private Sector Specialist. “The project offers a set of interventions to support the transfer of high-tech knowledge and build the practical skills of graduates, and, at the same time, increase sector competitiveness and expose IT firms to global best practices and standards. While improving the overall tech ecosystem and attracting investments, Palestinian educated youth will have new opportunities to find high-skilled jobs.”