How to Implement Skills Development Programmes

1
How to Implement Skills Development Programmes in
South East European Countries
First Meeting of the Working Group on Human
Capital Zagreb, 10 July 2007
2
How To Implement Concept what is it and how
does it fit in with the Investment Compact
strategy?
Concept
FDI - SME linkage programme
Regulatory Impact Analysis
Skills development Increasing labour
mobility
Public procurement systems
3
The How to approach is the logical extension of
Investment Compact support to the SEE region
Concept
The Investment Compact Investment Reform Process
(IRPTM) model
OECD good practices
Support in implementation of priority
reforms
Collaborative benchmarking of government policy
Annual Process to Achieve Impact
HOW TO Guidelines Investment promotion Regulator
y reform Human capital Anti-corruption
Six annual country priorities
4
Differentiating Factors
Value added of the How to guidelines
Easy to use

• Practical step-by-step approach that is adapted
  to officials that still have limited experience

• Will be developed in close cooperation with
  experts from the region to ensure maximum
  relevance and impact
• Development in regional context ensures that
  lessons learned from countries with similar
  historical and regional experience are distilled
  to the benefit of all participants

Incorporates strong input from the region

• Progressive transfer of expertise to support the
  implementation of recommended measures

Builds capacity progressively
Responds to a specific request for practical
support

• SEE countries express a need to have practical
  guidelines on what to do to implement specific
  policy priorities

5
What do we mean by skills ?

• There are two types of skills basic skills and
  occupational/ specific skills.
• Basic skills, or basic competences, such as
  literacy and numeracy, and generic skills, such
  as team working and communication, are applicable
  in most jobs.
• Occupational skills are capabilities and
  expertise in a particular occupation or activity.
  They are defined in relation to specific job
  profiles and consist in a combination of basic
  skills/competences, specific skills, training and
  job experience.
• In principle, the more specific skills get, the
  less transferable between occupations they
  become.
• However, in reality, a specific set of skills can
  open various employment opportunities, related to
  the same cluster of occupations.

6
What do we mean by skills ?

• The most common measures of skills are
  qualifications. These can be either educational/
  academic qualifications or professional
  qualifications. On the job training in the
  workplace is a vital source of skills development
  and career progression.
• For individuals, formal qualifications provide
  portability in the labour market, certifying the
  acquisition of certain skills.
• For employers, they provide valuable signals when
  recruiting new workers and also motivate
  employees to complete their training.

7
What do we mean by skill gap ?

• Skill gap is defined as a mismatch between skill
  demand and skill supply.
• Skill demand is essentially equivalent to
  employment demand from the various sector of the
  economy, expressed in terms of skill content. Its
  evolution is determined by shifting of sectoral
  profiles, shifting of occupational profiles
  within sectors and shifting of occupational
  specific skills.
• Skill supply is equivalent to skills embodied in
  the existing workforce and its evolution is
  determined by flows of new entrants in the labour
  market ( school leavers as the main contribution
  ), flows of individuals exiting the labor market
  and migration dynamics. The Up-skilling of those
  already in the workforce is another important
  element.

8
What kind of skill gap ?

• An economy can suffer from short term, medium
  term or long term skills gap.
• Short term gap happens when the skills offered by
  people currently looking for employment do not
  match skills requirements of current job
  vacancies
• There are several ways of addressing short term
  gaps increase labour market flexibility,
  temporary immigration, provision of additional
  training by employers.
• Medium and long term gaps are more complex to
  identify and tackle. They are the focus of this
  workshop.
• Skill gaps can occur at the national level,
  specific geographical regions or within specific
  sectors or occupation clusters.

9
Identifying skill demand in the private sector (I)

• Companies operate on a relatively limited time
  horizon. They know current vacancies and they
  project future vacancies taking into
  consideration work replacement, internal skill
  upgrading and growth prospects.
• Demand is expressed in terms of vacancy
  announcements completed with job profiles,
  stating the set of skill required.

10
Identifying skill demand in the private sector
(II)

• Companies surveys provide useful information on
  skill demand but the time horizon remains limited
  (max 3 years)
• They will hardly able to quantify the level and
  composition of demand in the medium term given
  that those determined by a number of external
  factors such as technical innovation, macro
  economic climate, business cycle, competition
  etc.

11
Identifying skill demand in the private sector
(III)

• Because of this limitation, skill demand
  projections over the medium-long term have to be
  based on a number of assumptions regarding future
  economic scenarios
• Those in turn have to take into account national,
  regional and sectoral economic strategies ,
  technical innovation and global trends

12
Identifying skill supply

• They are numerous factors determining skill
  supply long term demographic trends, short term
  fluctuations of the workforce, immigration
  dynamics , education systems outputs, training
  provision etc
• This will be further developed in the following
  presentation.

13
A few considerations (I)

• It is clear that a fundamental issue regarding
  skill development is time mismatching
• On one hand, while it is possible to elaborate
  relatively accurate estimates of short term skill
  demand, long term skill demand projections are
  necessary far less accurate, based as they are on
  a set of questionable assumptions
• On the other hand, human capital accumulation is
  a long term process. Strategic choices made in
  the basic education cycle, contribute to
  determine the final outcome

14
A few considerations (II)

• How to minimise the risk of a potential future
  mis-matching between demand and supply?
• From the point of view of an individual, guidance
  and orientation are extremely important.
• In concrete terms, the risk for an individual is
  to spend years acquiring competences through
  formal education that are not recognized has a
  platform for developing occupational skills by
  employers.

15
A few considerations (III)

• If a gap emerges, the smooth transition from
  education to the world of employment risks to
  become instead a jump in to the world the
  unemployment or underemployment.
• For the society, the emergence of wide skill gaps
  correspond to a massive waste of resources and
  lower long term economic growth.

16
A few final questions

• What is role of the education system, simply a
  provider of basic competences or a provider also
  of specific competences/occupational skills?
• What is the role of the private
  education/professional training providers?
• What is the role of on job training?
• How labour market regulations can smooth the
  transition from education to employment and
  support the acquisition of skills?
• And specifically for SEE, how to contain the
  emigration of highly qualified individuals?