Human capital is the main resource for Palestine and should, in theory, be a motor for the growth of its economy. Locked into the status quo of its geopolitical situation, Palestine has not been able to post economic growth figures in recent years. Its archipelago economy is segmented into a set of island economies (Gaza, the West Bank including Area C, and East Jerusalem), which all have to deal with their own constraints. The Palestinian economy, which survives on external funding and has a private sector that is mostly dominated by non-productive sectors, has not been able to create the necessary jobs to absorb the annual numbers of graduates entering the labour force. This excludes a growing group of well-educated Palestinians from actively engaging in the Palestinian economy.
The issues of graduate unemployment and female discrimination in accessing the labour market have their roots in social norms that prevail across the entire region, but the degree to which young men and especially young women are increasingly excluded from playing an active role in society is worrisome. The first to be affected are individuals, their families and their household economy, but Palestine's overall human capital and economy are also at stake.
As in many countries, the policy realm around initial education is disconnected from the economy. With a graduate unemployment rate of 31.5% (47.6% for women and 19.0% for men), Palestine cannot afford to ignore skills mismatch. Global shifts in education and training systems in the direction of flexible individual learning pathways provide an opportunity to revisit the overly traditional education system in Palestine. A comprehensive approach to learning is necessary for a society where technical upskilling and vocational reskilling pathways can be expected to become sorely needed lifelines for the bulk of unemployed university graduates.
Constrained by the status quo of its geopolitical predicament, Palestine's fragmented archipelago economy has little choice but to make the most of its human capital's ability to play a role in global value chains. As a result, an agile, well-educated (and reskilled) workforce could be a motor for growth, either within the technology sector or through the digital transformation of traditional sectors. An expanded version of the VET training system (including continuing training) could play a pivotal role in boosting the contribution of human capital to updated value chains, but a more comprehensive lifelong learning perspective on human capital development might be even better equipped to do so.