Whatever the system is, the fact is unchanged. A country's economy is heavily based on the competitiveness globally. When the workforce cannot offer good quality workers at reasonable price, the country will lose its competitiveness.
All the factors only plays a part of the equation, nepotism, government involvement, war, crime, education. But in the end of all, the answer is in ourselves. Can we produce quality product at competitive price? If not, then, explain to me why someone should spend more money on us to produce equal or less quality products? Without that, doesn't matter it is nepotism or not, there is no job because we are expensive.