Skills policies as drivers

of development
Reported by: Marielou Cruz-Manglicmot
Coordinating Skills Development Policies With
Economic Policies
Skills development policies and strategies need to be coordinated with and
closely linked to industrial, trade, technology, macroeconomic and
environmental policies to create a sustainable and dynamic development
process
 Emerging problems in skills development
policies with economic policies
Information problems with the nature and level of the workers skills
-to avoid risk, identify and assess skills in a credible manner and
communicates the information efficiently to employers and the labour
market
 Emerging problems in skills development
policies with economic policies
Coordinating the adoption of new technologies and diversification into new
industrial sectors with skills development.
can be addressed through policies and institutions by:
1. align incentives for workers, enterprises and the public sector to invest in
complementary forms of knowledge and skills.
2. promote cooperation between the various skills providers with a view to
establishing coherent and consistent learning paths.
 Emerging problems in skills development
policies with economic policies
Incentives-
Government policies and institutions need to provide incentives to
entrepreneurs to invest in discovery, such as by protecting the returns of the
firm, provides investment in the research and process as well as by promoting
the development of non-traditional activities.(Hausmann and Rodrik, 2003)
 Government failure
Government policies and coordination efforts may be subject to failure due
to lack of information, technical skills or good governance, including
corruption and opportunistic behaviour.
 A CALL FOR INTERVENTION.
Therefore governments needs to design institutional arrangements and monitor
outcomes carefully. Getting the policies right,(Lall, 2004. Rodrik, 2004)
Provide institutional framework for the coordination of policies across government
agencies.
HOW TO COORDINATE? Through SOCIAL DIALOGUE
Coordinate the process of skills development with the national development
strategy, and skills forecasting and labour market information systems, for early
identification of skills needed.
 Importance of social dialogue
It builds social capacity for learning, innovation and productivity
Builds relationship and trust between individuals, agencies, departments and
other organizations involved in the TVET system, science and the
production system(Brown, 1999)
Echoes the needs and aspirations of its constituents.
 IDENTIFICATION OF SKILLS NEEDED
The early identification of skills needs is an important element of forward-looking skills
development strategies as it serves to link future labour market needs with skills
development systems.
helps to reduce uncertainty over future skills demand, thereby increasing incentives for
workers and employers to invest in training.
It helps to prepare workers for the changing demand for skills and to maintain employability
and employment.
At the level of the national economy, it reduces skills mismatches and avoids skills shortages
and bottlenecks to development and growth. Countries have developed a wide variety of
approaches and methods for identifying skills needs and disseminating and using the respective
information.

What are these approaches and methods?

Approaches And Methods
Quantitative forecasting approaches
use economic statistics models to analyse macroeconomic data from national
accounts and data from labour force surveys with a view to forecasting long-
term trends in labour markets at the national or regional level. These top-
down approaches project national growth, productivity, labour supply,
labour market participation, working time and other macroeconomic
variables. For each sector, changes are forecast in the demand for occupations
and the level of employment in each occupation. The implications are then
analysed in terms of changes in education, training and qualifications.
 (OECD)
The Organization for Economic Cooperation and Development (OECD) is
a unique forum where the governments of 34 democracies with market
economies work with each other, as well as with more than 70 non-member
economies to promote economic growth, prosperity, and sustainable
development. (https://usoecd.usmission.gov/our-relationship/about-the-
oecd/what-is-the-oecd)
 The manpower requirement approach
Developed by the OECD. Their sole purpose was to inform planning
policies of ministries of education, manpower planning and human
resources development. Many developed and developing countries in all
regions used these approaches until the 1980s. However, the manpower
planning approach proved to be inflexible, rigid and too limited in informing
the labour market and the skills development system in an increasingly
dynamic world. It also suffered from many methodological shortcomings
(Neugart and Schmann, 2002).
 Forecasting Approach
The model forecasts the growth rates in demand for each occupation by
analysing trends in occupational shifts. It does not forecast employment
levels for a given type of education, but consistently integrates supply and
demand interactions and dynamic effects, such as labour market adjustment
and technological changes, into skill profiles in specific occupations. The
information is disseminated to labour markets to improve the educational
and occupational choices of individuals, as well as to inform and support
educational, economic and labour market policy formulation. (Crvers and
Hensen, 2007; Crvers and de Grip, 2002.
 Labour market information (LMI) analysis
LMIS units, sometimes also called labour market
observatories, aim to provide up to date
LMIS in many European and catching information on the trends and dynamics of
up countries coordinate the collection, sectoral and occupational skills
processing, storage, retrieval and
requirements, new occupations and the
dissemination of labour market
information (Mangozho, 2003). The user skills that will emerge as a result of
groups for this information include policy- technological and economic change.
makers in ministries of planning,
education, economic development and
labour, employers and workers
organizations, enterprises, training
institutions, public employment services
and individual students, workers and
jobseekers.
Sectoral approach
Labour market analysis, establishment surveys, qualitative feedback from stakeholders and
specific studies of cross-sectoral issues are among the approaches used in this process.

Sectoral bodies:
(1) monitor developments in their sector, including the influence of
globalization, changing technology and new management practices;
(2) analyse how these changes affect the demand for skills; and
(3) assess the degree to which each of the sectors has the appropriate skills to
support economic changes
Difficulties in organizing and maintaining
LMIS

First, the practice of using LMI to guide demand-based skills development

systems is not well understood in many transition and developing countries.
Second, many countries experience great difficulty in producing the basic
labour market statistics that underpin labour market information, such as
household and labour force surveys.
Third, there is insufficient cooperation between institutions to ensure that
LMI products are credible and relevant. Lack of cooperation also results in
poor distribution of the information that is developed (Sparreboom, 2001).
 Good LMIS can be developed and strengthened in developing and
industrialized countries by:

tailoring LMI to the needs of the various users;

diversifying sources of LMI and using a variety of public and private sector
institutions;
combining quantitative and qualitative LMI;
finding multiple uses for information and nurturing intelligent users of LMI;
promoting continuous improvements in data gathering;
assessing the usefulness of LMI;
and developing political and institutional support.
 South Africas National Skills Development Strategy includes the
establishment of a skills development information unit. This unit relies on
various approaches to identify skills needs, including basic labour market
analysis, stakeholder panels at the national and sectoral levels and more
advanced econometric analysis of future skills needs. The unit is located
in the Department of Labour, which also manages the new Skills
Development Strategy, so that the production of relevant labour market
information can be closely aligned to the needs of policy-makers and
stakeholders (Sparreboom, 2004)
 Irelands success.
forward-looking and coordinated policies have been at the heart of Irelands success.
The country is currently aiming to attract investment in knowledge intensive industries and
to develop the bio-pharmaceuticals and international financial services sectors.
Policies and institutions build expertise and clusters, develop R&D capacity and provide
highly educated personnel and support for advanced technologies.
Institutions which identify skills requirements early, communicate the information to
training authorities and promote training within enterprises contribute to creating a dynamic
sectoral development process.
Social dialogue, particularly at the national level, plays a central role in the skills development
process and in coordination.
 Summary..
skills development can be a powerful catalyst for change. To realize this
potential, skills development policies need to be integral components of broad
national development strategies so as to prepare the workforce and enterprises for
new opportunities and adopt a proactive approach to dealing with change. Develop
institutions that collect and share information, thereby helping to anticipate trends
and match the demand for and the supply of skills. Coordination between agencies,
stakeholders, training institutions, employers and workers necessitates a degree of
institutional sophistication, which in turn requires effective social dialogue.