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Linkages to Industry

Accessing Human Resources in External Markets to Scale Palestinian Startups

By Olga Batran

In 2022, 51 local higher education institutions graduated 46,000 students,*1 50 percent of whom remain unemployed.*2
 This is not surprising when we take into consideration that half of the local economic establishments*3 are small traditional, frequently informal firms, geared towards the domestic market – with low potential for growth and competition and limited employment capacity.
Occupation-imposed restrictions, together with outdated technology, high operational cost, and zero investment in R&D by small local businesses, create a vicious circle in which small enterprises emerge as a last resort for self-employment. They compete mercilessly in a micro market, only to fail quickly. This cycle also has a negative effect on educational institutions, as a weak private sector neither demands innovation nor values knowledge, which leads to outdated programs and methodologies. The private sector and education are two sides of the economic paradigm, and economic development cannot occur if one of them is undervalued. Traditional approaches to development and education, however, do not meet the needs of societies that are in crisis, struggling to survive in a harsh and unfairly manipulated marketplace. As a result, local small businesses, the primary drivers of the Palestinian economy, remain outside the “radar” of most developmental interventions and struggle to survive – funders consider them too small and their economic outputs “insignificant” and direct their focus typically towards larger enterprises, exporters, IT, and the like. Meanwhile, recent graduates find themselves ill-equipped to fulfil labor market needs and struggle to get the practical experience that would make them attractive to employers.

Within this landscape, the B-Hub at Birzeit University presents a holistic model that aims to tackle the pressing issues confronting the Palestinian economy, such as the vulnerability and downfall of small businesses, harmful social and ecological practices, and the prevalent joblessness among young people. It provides a mutually beneficial symbiotic relationship between education and industry and is well-suited to the local circumstances, where the prospects for internships and apprenticeships are minimal, owing to the predominance of micro and small private enterprises (96 percent of all local enterprises).
B-Hub’s model taps into the enormous knowledge capital of Birzeit University faculty and students and uses it to support small enterprises. Through B-Hub, university student teams, supported by faculty members, engage in solving the problems that micro enterprises are facing.

Instead of producing consulting reports with recommendations on what the enterprises should do, B-Hub supports companies in developing and implementing effective solutions after conducting a thorough diagnosis of the business performance and the micro-market context in which the enterprise operates. These solutions cover various business and technical areas, including production process optimization, family business restructuring, inventory management, realistic business planning, creative marketing plans, crisis management, and so on. These areas of expertise are often inaccessible to local small enterprises through conventional consulting models. Another crucial service is R&D for product development, which is vital for local companies that tend to replicate existing product designs from the market without much improvement. This service is also central to B-Hub’s industry exposure model, as R&D assignments involve students from various university faculties, especially scientific and technical specializations, who have the fewest opportunities to get practical skills. Examples of R&D projects that have been completed for local manufacturing and agrotech companies include methods for paper recycling, wastewater treatment, recipes for natural cosmetics, design for production lines and machines, electricity-saving techniques, and the development of chemical formulas for detergents, polymers, and isolation materials as well as innovative construction materials.

This model of exposing students to the industry not only benefits companies but also provides a highly practical learning venue for students and broadens the horizons for faculty members. In addition, it stimulates an entrepreneurial mindset among students, inspiring them with ideas for starting their own businesses. In fact, several B-Hub startups have been launched as a result of R&D assignments, where students identified niches where they could apply their technical and engineering knowledge. Moreover, this model naturally cultivates twenty-first-century skills, such as problem-solving, communication, research, negotiation, and analytical skills.

*1 “Distribution of Higher Education Institutions in Palestine by Type of Institution and Region, 2021/2022,” Palestinian Central Bureau of Statistics (PCBS), available at https://www.pcbs.gov.ps/Portals/_Rainbow/Documents/Higher_Education_2021_01E.html.

*2 “Press Release on the Results of the Labour Force Survey: Third Quarter (July – September, 2022) Round,” PCBS, available at https://www.pcbs.gov.ps/post.aspx?lang=en&ItemID=4353.

*3 The total number of economic establishments in Palestine is about 146,000, among these, 94,000 are private, of which 83,000 are micro and small enterprises, employing 1 to 10 persons. See “Preliminary Results of the Population, Housing and Establishments Census, 2017,” PCBS, 2018, available at chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.pcbs.gov.ps/Downloads/book2364-1.pdf.

  • Olga Batran is a private-sector development professional with more than 20 years of local experience. She is deeply committed to supporting local small manufacturing enterprises and social and green entrepreneurship, and her passion lies in creating opportunities for these businesses to thrive, grow, and contribute to sustainable economic development. Currently, she manages B-Hub, a business incubator of Birzeit University.

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