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G20

A Skilled Workforcefor Strong, Sustainableand Balanced Growth

A G20 Training Strategy

INTERNATIONAL LABOUR OFFICE

GENEVA, NOVEMBER 2010



A Skilled Workforce for Strong,Sustainable and Balanced Growth

A G20 Training Strategy

International Labour Ofce • Geneva



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A Skilled Workforce for Strong, Sustainable and Balanced Growth: A G20 Training Strategy

International Labour Ofce – Geneva, 2010

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training policy / vocational training / vocational education / skill requirements / training employment relationship / economic

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How many women and men are in employment and how productive they are at work has a lot do to with the available opportunities to acquire and maintain relevant skills.Countries, enterprises and persons all perceive skills development as strategic, andconsequently seek to step up investments in skills. In aspiring to realize the potential o skills development, they ace common challenges.

In Pittsburgh in September 2009, G20 Leaders called or putting quality jobs atthe heart o the recovery, and committed to implementing recovery plans that supportdecent work, help preserve employment and prioritize job growth. To that eect theywelcomed the ILO’s Global Jobs Pact and agreed on the importance o building anemployment-oriented ramework or uture economic growth.

Leaders adopted a ramework or strong, sustainable and balanced growth as the

instrument or their cooperative action. They acknowledged the role o skills develop-ment in that ramework, stating that “each o our countries will need, through its ownnational policies, to strengthen the ability o our workers to adapt to changing marketdemands and to benet rom innovation and investments in new technologies, cleanenergy, environment, health and inrastructure.”

They asked the ILO, in partnership with other organizations, and with employersand workers, to develop a training strategy or their consideration.

The ILO prepared such a strategy which was submitted to, and welcomed by, theLeaders at their Summit in Toronto, in June 2010. In Seoul, in November 2010, Leaderspledged to continue to support national strategies or skills development, building onthe G20 Training Strategy.

In preparing this strategy, the ILO worked closely with employers and workerswhom it consulted widely. It drew on the Conclusions on skills or improved productiv-

ity, employment growth and development adopted by the International Labour Coner-ence in June 2008.

The ILO interacted extensively with international, regional and national organi-zations and institutions. The strategy benetted rom intensive collaboration with andinputs rom the OECD. Experts rom many international, regional and national agenciesgenerously shared their views, experience and ndings; notably rom the Asia Develop-ment Bank, the Asia-Pacic Economic Cooperation (APEC) Working Group on HumanResource Development, the European Training Foundation, the EU Expert Group onNew Skills or New Jobs, UNESCO, the World Bank; as well as the ILO’s International

Training Centre in Turin and the Inter-American Centre or Knowledge Development inVocational Training (ILO/Cinteror). The Inter-Agency Group on Technical and Voca-tional Education and Training has also been mobilized in the exercise.

Preface



iv A Skilled Workforce for Strong, Sustainable and Balanced Growth

An early version o the training strategy was discussed at the G20 Employmentand Labour Ministers Meeting in Washington DC in April 2010, who recommendedprioritizing education, lielong learning, job training and skills development strategieslinked to growth strategies.

The wide consultations we have carried out, the body o knowledge we haveexamined, point to a number o critical elements.

The rst is broad availability o quality education as a oundation or uture train-ing. Education or all, and children in school and not at work, is an essential oundationo uture training.

A second is building solid bridges between the world o work and training provid-

ers in order to match skills provision to the needs o enterprises. This is oten done bestat the sectoral level where the direct participation o employers and workers togetherwith government and training providers can ensure the relevance o training.

A third is continuous workplace training and lielong learning enabling workersand enterprises to adjust to an increasingly rapid pace o change.

Fourth is anticipating and building competencies or uture needs. Sustaineddialogue between employers and trainers, coordination across government institutions,labour market inormation, employment services and perormance reviews are steps toan early identication o skill needs.

Fith is ensuring broad access to training opportunities, or women and men, andparticularly or those groups acing greater diculties, in particular youth, lower skilled

workers, workers with disabilities, rural communities.Decent work, a universal aspiration, is the best path to sel-advancement o womenand men. It underpins the stability o communities and amilies. It is an integral compo-nent o strategies or sustainable growth and development. And skills are pivotal todecent work strategies.

The training strategy or strong, sustainable and balanced growth addresses strate-gic issues as well as practical arrangements. It provides a platorm or urther exchangeo ideas and experiences among a wide range o institutions, enterprises, experts romall countries. It will strengthen the cooperation among international agencies, andinorm the ILO’s work.

We are pleased to make this G20 training strategy widely available. I am convinced

you will nd it useul in guiding your own assessments o the paths leading to moreeective and broadly accessible training provision o relevant skills, and ultimatelydecent work in sustainable enterprises.

Juan SomaviaDirector-General,International Labour Oce



Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Key messages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction 3

Investing in workorce skills: a widely shared objective . . . . . . . . . . . . . . . . . . . . . 3

A broad denition o training and skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Benets rom adequate investment in good-quality education and skills. . . . . . . . . 4

Widely agreed guiding principles linking skills and work . . . . . . . . . . . . . . . . . . . . 5Sustaining relevance to the world o work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

What is in this report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

PART I: Global drivers of change: opportunities and challenges

for training and skills development 7

Demographic change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Educational attainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Equity and inclusive growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Globalization o markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Technology and innovation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Climate change and transition to the green economy. . . . . . . . . . . . . . . . . . . . . . . . 13

PART II: A strategic framework to bridge training and the world of work 15

Diverse realities, common and dierent challenges. . . . . . . . . . . . . . . . . . . . . . . . . 15

A common ramework or skills development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Meeting today’s and tomorrow’s skills needs 18

A holistic approach 18

A l i e - c y c l e p e r s p e c t i v e 19

Convergence across policies 19

Contents



vi A Skilled Workforce for Strong, Sustainable and Balanced Growth

PART III: Building blocks of strong training and skills development strategies 21

Anticipating uture skills needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Participation o social partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Sectoral approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Labour market inormation and employment services . . . . . . . . . . . . . . . . . . . . . . . 26

Training quality and relevance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Gender equality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Broad access to training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Youth 29

People with disabilities 29

Migrant workers 29

Small enterprises, sel-employment and the inormal economy 31

Not just training, but using that training 31

Financing training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Assessing policy perormance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Illustrations o recent training policy applications . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Skills or economic recovery 34

Skills or green jobs 35

Sharing knowledge and experience 39

Training and development cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Selected references . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41



Equipping the workorce with the skills required or the jobs o today and those o tomorrow is a strategic concern in the national growth and development outlooks o allG20 countries. Together, G20 leaders have pledged to support robust training strategiesto meet the challenges o ostering strong, sustainable and balanced growth in eachcountry and globally.

The globalization o markets is accelerating the diusion o technology and thepace o innovation. New occupations are emerging and replacing others. Within eachoccupation, required skills and competencies are evolving, as the knowledge content o production processes and services is rising.

A major challenge in all G20 countries is simultaneously to enhance the respon-

siveness o education and training systems to these changes in skill requirements andto improve access to training and skills development.

Many G20 countries have used training and retraining in their responses to theemployment challenges arising rom the global nancial crisis o 2008. Lessons learnedsince that time are being applied more widely.

Ultimately, each country’s prosperity depends on how many o its people are inwork and how productive they are, which in turn rests on the skills they have and howeectively those skills are used. Skills are a oundation o decent work.

A strategic framework for skills development

The cornerstones o a policy ramework or developing a suitably skilled workorceare: broad availability o good-quality education as a oundation or uture training; aclose matching o skills supply to the needs o enterprises and labour markets; enablingworkers and enterprises to adjust to changes in technology and markets; and anticipat-ing and preparing or the skills needs o the uture.

When applied successully, this approach nurtures a virtuous circle in which moreand better education and training uels innovation, investment, economic diversica-tion and competitiveness, as well as social and occupational mobility – and thus thecreation o more but also more productive and more rewarding jobs.

Good-quality primary and secondary education, complemented by relevant

vocational training and skills development opportunities, prepare uture generationsor their productive lives, endowing them with the core skills that enable them tocontinue learning.

Key messages



2 A Skilled Workforce for Strong, Sustainable and Balanced Growth

Young women and men looking or their rst jobs are better prepared or a smoothtransition rom school to work when they are given adequate vocational education andtraining opportunities, including in-work apprenticeships and on-the-job experience.

Working women and men periodically need opportunities to update their skillsand learn new ones. Lielong learning or lielong employability captures the guidingpolicy principle here.

Sustaining robust training policies and systems

Robust training policies and systems are grounded in the characteristics and institutions

o each country. Nevertheless, a number o common building blocks can be identied. Agood skills development system will be able to: anticipate skill needs; engage employ-ers and workers in decisions about training provision, including in specic sectors;maintain the quality and relevance o training; make training accessible to all sectors o society; ensure viable and equitable nancing mechanisms; and continuously evaluatethe economic and social outcomes o training.

To keep training relevant, institutional and nancial arrangements must build solidbridges between the world o learning and the world o work. Bringing together busi-ness and labour, government and training providers, at the local, industry and nationallevels, is an eective means o securing the relevance o training to the changing needso enterprises and labour markets.

Institutions to sustain the involvement o employers and workers and their repre-sentative organizations are critical to keeping training relevant and ensuring that train-ing costs and the gains o productivity improvement are shared equitably.

Maintaining a close connection between training policies and employment policiescreates an eective bridge between the worlds o learning and o work. Policies to improveskills combined with policies to sustain growth and investment, acilitate job search, andsupport entry and re-entry into the labour market can lead to more and better jobs.

Many benets derive rom making training and skills opportunities broadly acces-sible to all women and men. Special measures can help overcome the diculties somegroups ace in accessing skills – or example, people with disabilities, members o minority groups, those in need o a second chance.

Sharing knowledge and experience

There is plenty o scope or continuing and deepening exchanges o knowledge andexperience among countries on training and skills development policies and systems. Itis particularly valuable or countries to share their experiences in dealing with the moredicult challenges o maintaining the relevance o education and training to the worldo work, and in moving rom policy principles to application.

There is also scope or taking a close look at the interlinkages between skills poli-cies, training systems and development, reviewing how knowledge and experience o training strategies and policies can help low-income countries address their growth and

development challenges.



In Pittsburgh in 2009 G20 leaders pledged “to support robust training eorts in [their]growth strategies and investments” in the context o a ramework or strong, sustain-able and balanced growth.

To that end, they called “on the ILO, in partnership with other organizations, toconvene its constituents and NGOs to develop a training strategy or [their] consid-eration”.1

The ILO has worked, in cooperation with other organizations, including the Organ-isation or Economic Co-operation and Development (OECD) and regional traininginstitutions, to develop a training strategy. Close consultations were held with represent-atives o business and labour, and with skills experts rom G20 and other countries.2

A preliminary version o the training strategy was submitted to the G20 Employ-ment and Labour Ministers Meeting convened in Washington, DC in April 2010. Attheir Summit in Toronto, the Leaders welcomed the G20 Training Strategy.

The training strategy has beneted rom the viewpoints given by ministers as wellas urther consultations with workers’ and employers’ representatives and internationalorganizations and experts.

Investing in workorce skills: a widely shared objective

All G20 countries have identied skills development as a strategic objective. All are

stepping up investments in skills. India adopted an ambitious National Skills Devel-opment Policy in 2009. South Arica is adjusting training strategies under the newlycreated Ministry or Higher Education and Training.

The United Nations is committed to the Millennium Development Goal o achiev-ing universal primary education: ensuring that, by 2015, children everywhere, boys

1 This document has been prepared with substantial input rom the OECD.

2 Formal consultations were held as ollows: Meeting o Experts on Skills on Global Training Strategy, Turin,

15–17 March 2010, with participants rom governments’, workers’ and employers’ institutions, universities and

think tanks; Upskilling out o the downturn: Global Dialogue Forum on Strategies or Sectoral Training and

Employment Security, Geneva, 29–30 March 2010; Seguimiento a la “Carta de Brasilia”: Estrategia de Formación

G20, Lima, 4–5 March 2010, organized by ILO/CINTERFOR (Inter-American Centre or Knowledge Developmentin Vocational Training); special meeting o the Inter-Agency Group on TVET, Geneva, February 2010 (including

UNESCO, OECD, the World Bank, the European Training Foundation, and the Asian Development Bank).

Introduction




and girls alike, are able to complete a ull course o primary schooling. UNESCO, insupport o the Education or All campaign, recently adopted new guidelines on techni-cal and vocational education and training.

In 2008, Government, Worker and Employer representatives at the InternationalLabour Conerence adopted a set o conclusions on skills or improved productivity,employment growth and development (ILO, 2008a).

The OECD has produced several major reports on vocational education and train-ing and on school-to-work transitions (OECD, 2009; OECD, 2010a).

The European Commission has embarked on a New Skills or New Jobs Initiative(EC, 2010).

The World Bank is preparing a new skills strategy geared towards employabilityand productivity.

A broad denition o training and skills

Training and skills development is understood in broad terms, covering the ull sequenceo lie stages.

Basic education gives each individual a basis or the development o their poten-tial, laying the oundation or employability.

Initial training provides the core work skills, general knowledge, and industry-based and proessional competencies that acilitate the transition rom education into

the world o work.Lielong learning maintains individuals’ skills and competencies as work, tech-

nology and skill requirements change.Dierent countries ocus on dierent elements as they see relative strengths and

weaknesses in their own skills development systems, and as they learn more aboutinnovations and experience in other countries.

Benets rom adequate investment in good-qualityeducation and skills

Skills development enhances both people’s capacities to work and their opportunities atwork, oering more scope or creativity and satisaction at work.

The uture prosperity o any country depends ultimately on the number o personsin employment and how productive they are at work. A rich literature exists on the linksbetween education, skills, productivity and economic growth.

Estimates or European countries show that a 1 per cent increase in training daysleads to a 3 per cent increase in productivity, and that the share o overall productivitygrowth attributable to training is around 16 per cent (CEDEFOP, 2007).

Available evidence rmly establishes that a combination o good education withtraining that is o good quality and is relevant to the labour market

■

empowers people to develop their ull capacities and to seize employment andsocial opportunities;

■ raises productivity, both o workers and o enterprises;



5Introduction

■ contributes to boosting uture innovation and development;

■ encourages both domestic and oreign investment, and thus job growth, loweringunemployment and underemployment;

■ leads to higher wages;

■ when broadly accessible, expands labour market opportunities and reduces socialinequalities.

Widely agreed guiding principles linking skills and work

Good-quality basic education or all is an agreed goal and an essential prerequisite orurther skills development.

Establishing solid bridges between vocational education, training and skills devel-opment, and the world o work makes it more likely that workers will learn the “right”skills, namely those required by the evolving demands o labour markets, enterprisesand workplaces in dierent economic sectors and industries.

Eective partnerships between governments, employers’ and workers’ organiza-tions, and training institutions and providers are critical to anchor the world o learningin the world o work.

Broad and continued access to training and skills development opens up the oppor-tunities or and benets o both initial and lielong learning to all, enabling women and

men o all ages, in both urban and rural areas, to ull their aspirations.Dedicated policies and measures are required to acilitate access to training and

skills development by individuals and groups hindered by various barriers, includingpoverty and low income, ethnic origin, disability and migrant status.

Education and skills policies are more eective when well coordinated withemployment, social protection, industrial, investment and trade policies.

By using up-do-date inormation, those working in education and training can assessthe match between the skills they are teaching and those in demand in the workplace.

When that inormation is put at the disposal o young people and workers byemployment and vocational guidance services, it can help them to make better-inormedchoices about education and training.

Sustaining relevance to the world o work

Countries share many o the diculties in ensuring that learning is eective, sustainedand relevant to the world o work.

General education budgets account or a large proportion o total governmentexpenditure. Yet educational achievements vary widely both across and within coun-tries. When general education ails in its basic objective o raising the cognitive skills o the population, the economic and social costs can be high. In some countries, possiblecuts in spending on education and training in the ramework o scal consolidation

policies could substantially hinder uture development. It is all the more important tomanage public training resources eectively, given their importance as a key driver o long-term growth.




During the nancial crisis begun in 2008, training and education eatured as keycomponents in the stimulus packages adopted by many G20 countries. Now, as someo these countries are embarking on scal consolidation, it is important to ring-enceeducation and training budgets. Cutting back on these social expenditures can jeopard-ize long-term growth perspectives and aggravate rather than alleviate scal problems.

The gul between the world o learning and the world o work can be wide. Theormer is oten classroom-based and academic, while the latter is dominated by thepractical demands o production processes, deadlines and workplace organization.Change happens ast in the world o work, driven by innovation and by developmentsin technology and markets. Keeping up with this pace o change is a continuing chal-

lenge or learning institutions. The active participation o employers’ and workers’representatives in vocational education and training institutions is essential to bridgingthis gul. Crossing the gul can be particularly challenging or women, people withdisabilities, communities in remote rural areas and others without access to good-qual-ity education.

While most countries have seen an unprecedented expansion o their educationand skill base over the past decades, there is a persistent gap between the kind o knowl-edge and skills that are most in demand in the workplace and those that education andtraining systems continue to provide. The ease with which young women and men enterthe labour market is a good indication o how relevant their skills training has been.

Assessing the continued relevance and quality o training institutions and

programmes, relative to their cost, is a challenge. Tools and methods, including inter-national comparisons, require urther development.Most importantly, skills by themselves do not automatically lead to more and

better jobs. Skills policies must be part o a broad set o policies that are conducive tohigh rates o growth and investment, including investment in basic education, healthcare and physical inrastructure, strong growth in good-quality employment, and respector workers’ rights.

What is in this report

This report is composed o three elements: the reasons why a skills strategy is needed;a conceptual ramework or such a strategy; and recommendations or its eectiveimplementation. These correspond to the three parts o the report, which address in turnthe why, what and how o equipping the workorce with the skills required or strong,sustainable and balanced growth.

Part I briefy describes selected drivers o longer-term change that challengenational skills development systems and provide the motivation or a commitment toimproving them.

Part II provides a conceptual ramework or a skills development strategy, withreerence to national policy objectives, that is relevant to the diverse realities and needso individual countries.

Part III assembles the essential building blocks o a robust training strategy ascalled or by the G20 leaders, with reerence to a range o illustrations drawing onnational examples.



Global trends, aecting all regions, set the context or education and training todayand in the uture. A selected number o global drivers o change are considered here:namely, the supply-side challenges o demographic change, educational attainment andcommitments to inclusive growth, and the demand-oriented challenges o globalizationo markets, technological innovation and climate change.

Demographic change

Worldwide, the rate o population growth is declining, though it remains high in some

countries and regions. Some countries ace ageing societies. Others have burgeoningyouth populations.

Taken as a whole, the world population is marked by declining ertility and risinglie expectancy. The primary consequence o both trends is population ageing. Theproportion o the population aged 60 years and over will rise in the more developedregions rom 22 per cent in 2010 to 33 per cent in 2050, and in the less developed regionsrom 9 per cent to 20 per cent. 3

The population o working age (25–59 years) will decline in the more developedregions between 2010 and 2050 in both absolute and proportional terms, alling rom49 to 41 per cent o the total population. In contrast, the working-age population in theless developed regions will grow slowly as a proportion o the whole, rom 43 per cent

in 2010 to 46 per cent in 2050.4 These trends have three major implications or education, skills and training.First , economic growth will depend even more heavily than today on the produc-

tivity o the workorce, complemented by rising labour orce participation rates, espe-cially among women and older workers. The challenge o lielong learning, particularlyamong ageing but economically active persons, will increase in salience correspond-ingly. For example, China will experience rapid population ageing in the next ewdecades and so will have to maintain and upgrade the skills o a growing pool o matureand older workers in addition to making urther progress in ormal education.

3

United Nations, World Population Prospects: The 2008 revision (New York, Department o Economic and SocialAairs, 2008).

4 Ibid.

Global drivers of change: Part i

opportunities and challenges for training and skills development




Second , in several regions the growing size o the youth cohort will continue tochallenge both education and training capacities and job creation rates as more youngpeople enter the world o work. Everywhere, young people with low skill levels arending it hard to secure jobs.

Third , international fows o migrant workers will continue to grow, raising chal-lenges concerning air access to training and how to ll skill gaps in some countrieswithout creating them in others.

Educational attainment

Education has been identied as an important determinant o economic growth. Higherlevels o educational attainment lead to a more skilled and productive workorce,producing more eciently a higher standard o goods and services, which in turn ormsthe basis or aster economic growth and rising living standards.

As progress is made towards the goal o universal primary education – stimu-lated by the Millennium Development Goal and the Education or All initiative led byUNESCO – demand rises or secondary schooling, including vocational education andtraining. Countries in all regions and o all development levels seek to ensure that basiceducation is o suciently good quality to prepare students adequately or vocationaland urther training.5

Data rom the UNESCO Institute or Statistics, assembled by Barro and Lee,show major progress in educational attainment over time, but also major dierencesbetween countries. Average years o schooling or those aged 15–24 years in develop-ing countries rose rom 3.15 years in 1950 to over 8.5 years in 2010. Over that sameperiod, average years o schooling or 15–24 year-olds in industrialized countries roserom almost seven years to over ten years. In 2010, the average number o years inschool or girls reached 84 per cent o that or boys in developing countries and 98 percent in advanced countries.6

Good-quality basic education is closely correlated to economic growth, althoughit cannot denitively be stated to ollow rom it. Such education is a oundation orurther skills development in productive employment, both initially and throughoutadult lie. Moreover, a wide distribution o educational attainment across society is abetter indicator o likely uture economic growth than a high average level. A country’scapacity to pick up new technologies and turn them to economic advantage is greateri its education and training system creates a broad base o adequately educated indi-

5 Comparative data on enrolment in education are published by UNESCO. Measurements o the quality o educa-

tion are also available, generated by internationally comparable tests o educational achievement. Such measures

include the International Adult Literacy Survey, conducted by Statistics Canada and the OECD; the PISA scores

surveyed by OECD every three years measuring reading, mathematics and science literacy o 15-year-olds; and the

Trends in International Mathematics and Science Study, now in its third round (commencing 2003; previous rounds

began in 1995 and 1999), covering 49 countries. Beginning in 2011, the OECD Programme or the International

Assessment o Adults’ Competencies (PIAAC) will build internationally comparable evidence on skills in the adult

workorce and how these skills have been used in the workplace.6 Robert Barro and Jong-Wha Lee, “A new data set o educational attainment in the world, 1950–2010”, Working

Paper 15902, National Bureau o Economic Research, April 2010.



9PART I Global drivers of change

viduals able to continue learning throughout their careers. Literacy rates are a basicindicator o education coverage and vary widely across G20 countries (table 1). A lowliteracy rate signals an education system that is not preparing society as a whole orurther learning and productive work.

It is increasingly acknowledged that training and skills development, whether inschools or elsewhere, is an essential complement to general education in equippingpeople to grasp opportunities in the world o work.

Equity and inclusive growth

G20 countries’ commitments to inclusive and balanced growth, and the internationalcommunity’s commitments to a global reduction in poverty, also drive eorts to expandthe availability o good education and training.

Women’s rising rates o participation in the ormal labour market and rising levelso educational attainment both contribute to greater social equality between womenand men. The educational perormance o women is generally better than that o men.However, women ace widespread barriers in seeking to achieve the goal o equality

o opportunity and treatment in employment. Gaining new and higher-level skills canboth help more women to enter the labour market and contribute to lowering genderdisparities in the labour market.

Country %

Argentina 49.2

Australia 93.8

Brazil 33.8

Canada 94.8

China 93.5

France 92.6

Germany 90.6

India 92.2

Indonesia 46.7

Italy 87.5

Japan 96.7

Korea, Republic o 96.2

Mexico 48.9

Russian Federation 88.4

Saudi Arabia 33.1

South Arica 35.3

Turkey 58.2

United Kingdom 92.9

United States 91.8

Source: OECD, 2010b, table A3.

Table 1: Proportion of students attaining basic literacy, based on average test scores in mathematicsand science from the beginning of primary to the end of secondary schooling (PISA scale)




Eorts to combat marginalization in working lie are best ocused on early educa-tion and youth employment. Young people who are not integrated into the labour marketat an early age are at high risk o long-term lower wages and employment insecurity,and youth unemployment rates tend to be inversely proportional to level o educationalattainment.

In many countries, the transition rom school to work is a critical threshold. Asuccessul transition is greatly acilitated by good access to vocational education andtraining and in-work experience.

Worldwide, 80 per cent o people with disabilities live below the poverty line.Evidence o skills decits among persons with disabilities is most apparent in countries

where quotas or employing disabled people cannot be met because o low educationand skill levels.

Globalization o markets

The dening characteristic o the past 50 years o world economic growth has beenthe closer integration o markets across regions. This is observed most distinctly in thegrowth o world trade, oreign direct investment (FDI) and migration.

World trade grew 1.6 times as ast as world GDP between 1950 and 2007. Overthe latter part o this period trade increased by 5 per cent annually while GDP grewby only 2.9 per cent. Between 1950–73 and 1974–2007 global FDI as a share o worldGDP grew by a actor o ve, reaching over 25 per cent in the latter period. 7

As world trade has grown, so the pattern o exports has changed. The share o industrialized countries in world exports o manuactures has been declining since the1950s, and more sharply rom the 1980s. This decline refects the increasing specializa-tion o the industrialized countries in services. The correlate is a rising share o devel-oping countries in world manuactures exports to just over a third in 2006, twice thelevel o 25 years ago (gure 1).

Shits in the geographical origins and in the composition o trade have majorconsequences or skills requirements. Economic transormation, or example romagriculture into manuacturing and services, or changes within an economic sector,or example rom more labour-intensive manuactures to higher value-added manuac-tures, change skill requirements. Adjusting the skills o the workorce to these chang-ing requirements, whether in a country, a local area or a single enterprise, is a continu-ing challenge everywhere.

International movement o labour, rom South to North, but also within the Southand within the North, is another prominent eature o globalization The total numbero international migrants has grown steadily to reach 214 million in 2010, o which theILO estimates hal are economically active or migrant workers.

The increase in migration within and among countries calls or special arrange-ments to be made or the education and skills training o immigrants, and or the recog-nition o the skills they bring with them. It also calls or policies to retain human capitaland avoid brain drain. A separate concern is that curtailing the movement o skilled

7 World Trade Organization, World Trade Report 2008: Trade in a globalizing world (Geneva, WTO, 2008).




These trends are refected in both output and trade. The value o world trade ininormation and communication technology (ICT) goods increased rom US$1,000billion in 1996 to over US$3,500 billion in 2007. Non-OECD countries were respon-sible or nearly hal the 2007 total, compared to just 15 per cent a decade earlier(OECD, 2008).

Innovation and technology translate into investment in xed capital and in work-orce and entrepreneurial skills which in turn lead to higher productivity. Countries withlower levels o economic development accordingly display lower levels o output perworker. However, these countries also tend to register more rapid increases in output(gure 2).

Rapid innovation will continue to characterize investments as enterprises expandinto new products and services. While the pace o change may be aster in emerg-ing economies, the more advanced countries will seek to keep their competitive edgethrough investment in innovation.

In all countries the implications or skills development are momentous. Many o the jobs that will be generated over the next two decades do not exist today; yet most

o the workorce o those years is already in education and training. Even so, the needto upgrade skills applies not only to young people in schools, universities and traininginstitutions, but also to the current generation o workers.

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Figure 2: GDP per person employed, 2008 (constant 1990 US$ at PPP), and change since 1990

Source: ILO labour statistics database, Key indicators of the labour market , 6th edition (Geneva, ILO, 2009).



13PART I Global drivers of change

Climate change and transition to the green economy

Climate change is a major driver o technological change and innovation in the searchor measures and policies to mitigate or help adjust to its eects. Sustainable develop-ment and the integration o environmental protection into economic and social devel-opment objectives are among the most challenging issues on the national and interna-tional policy agenda.

The level and structure o employment and skill needs worldwide will be aectedboth by the direct impact o global warming (particularly in agriculture, shing, tour-ism and mining) and by the policies adopted at the local, national and international

levels to reduce carbon emissions.The notion o “green jobs” has become an emblem o a more sustainable econ-omy and society. Jobs in all economic sectors are subject to “greening”, but six sectorshave particular salience in this respect: energy supply, especially o renewable energy;construction; transportation; basic industry; agriculture; and orestry. Millions o green

jobs already exist worldwide. The report launching the Green Jobs Initiative counted atleast 2.3 million in the renewable energy sector alone in just six o the G20 countries.9 The same report estimated that measures to reduce energy consumption and CO2 emis-sions in the residential building sector could generate 3.5 million new jobs by 2050.

Alarmingly, the lack o relevant skills may turn out to be a bottleneck in the “green-ing” o economies. There is an urgent need or training in the ull complement o skills

required across a broad range o jobs so that economies can both continue “greening”and realize the potential growth in employment the process oers.Lessons rom previous experiences o transition suggest that the transition to

cleaner energy requires proactive steps to acilitate the adjustment o labour markets,both to maximize opportunities or new jobs and to address the problems associatedwith potential job losses. Skills development will play a prominent role in both aspectso this endeavour.

Several countries have reported that a “skills gap” already exists between avail-able workers and the needs o green industries. A 2007 survey o Germany’s renewableenergy industry concluded that companies are suering rom a shortage o qualiedemployees, especially in knowledge-intensive occupations. The Conederation o Brit-

ish Industry has likewise expressed concern that sectors going green are struggling tond technical specialists, including designers, engineers and electricians. In the UnitedStates, the National Renewable Energy Laboratory has identied a shortage o skillsand training as a leading barrier to energy-ecient growth. In Brazil, large biouelreneries are constrained in their development by a shortage o highly skilled personnel(UNEP, ILO, IOE, ITUC, 2008).

9 “Green jobs” are dened as decent work which contributes to the preservation or the restoration o the quality

o the environment (Green Jobs Initiative: United Nations Environment Programme (UNEP), ILO, InternationalOrganization o Employers (IOE) and International Trade Union Conederation (ITUC), Green jobs: Towards decent

work in a sustainable, low-carbon world (Geneva, 2008).



All countries have good reasons, which inevitably vary according to their respectivenational circumstances, to rene their skills development strategies to yield betterresults. Building on rich and diverse country experience, it is possible to articulate aramework o a skills development strategy that can be eective across a broad rangeo economic and social circumstances.

Diverse realities, common and dierent challenges

Dierences in demographics, economic structures and levels o economic developmentinorm dierent countries’ policies or training and skills development.A key policy challenge conronting more developed countries is how to ensure

that the skills o both job entrants and existing workers remain relevant throughout theircareers. Skills gaps can retard enterprise growth and jeopardize workers’ employability.Structural changes in the economy and heightened competition between enterprisesreduce the number o available jobs with low skill requirements.

These challenges call or broader access to training at the point o entering the jobs market, improvements in the relevance and quality o that training, and expansiono lielong learning opportunities, all combined with active labour market policies.A large proportion o the working population requires more and better skills (box 1).

In addition to specic technical skills, transversal competencies and ‘sot’ skills areincreasingly important, including the ability to engage and interact eectively withothers, build consensus, and provide assistance, direction and leadership as needed. As

job and labour mobility increase, the portability o skills and international migration o talent become important issues.

In countries in Central and Eastern Europe, eorts to reinvigorate skills developmentsystems have included restructuring education and training systems to align them withthe demands o the new market economy, using labour market institutions to mitigate thenegative eects o economic restructuring, and targeting training and lielong learning onincreasing the adaptability and mobility o the workorce. Many countries share the experi-ence o becoming both sending and receiving countries in the fow o migrant workers.

A signicant characteristic o many countries in Asia and Latin America is thecombination o high growth and productivity in some sectors and regions with lowproductivity and persistent poverty in rural and urban inormal economies. Avoid-

A strategic framework …Part ii

… to bridge training and the world of work




ing skills shortages in high-growth sectors requires improved coordination betweenprospective employers and providers o education and training, increased public provi-sion o training and encouragement o workplace learning. In some countries, such asChina and India, the shortage o high-skilled workers may make it hard to sustain higheconomic growth rates (box 2).

The role o training in promoting the transer o activities rom the inormal to the

ormal economy involves broadening access to basic education, supporting inormalmeans o developing skills, and combining vocational and entrepreneurship training toacilitate the ormalization o small enterprises.

Box 1: Skill requirements in Europe by 2020

Projections or the 27 EU countries, plus Norway and Switzerland, suggest that between 2010 and

2020 some 80 million job opportunities will arise, including almost 7 million additional new jobs.

Most o the net employment increase is expected to occur in higher-level occupations. Over the

decade, the proportion o people employed in high-qualication jobs is projected to increase rom

29 to 35 per cent. The proportion o jobs requiring medium-level qualications will continue to be

about hal o total employment, and the proportion o jobs with low qualications is expected to

decline rom 21 to 15 per cent.

Source: CEDEFOP, Skills supply and demand in Europe: Medium-term forecast up to 2020, Feb., CEDEFOP, 2010.

0

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Forecast



17PART II A strategic framework to bridge training and the world of work

In the Arab region, investment in education and training has been stepped upsignicantly. However, young people still ace diculties in moving rom educationinto work, while enterprises oten have trouble nding enough people with the skillsthey need to be able to expand or adopt new technologies. Preparing the workorce orthe labour market o the uture remains a challenge.

In lower-income developing countries, mainly in sub-Saharan Arica and parts o

Asia, the vicious circle o low education and skills, low productivity and poverty is onlygradually being addressed. Only one-th o boys and girls o secondary-school age insub-Saharan Arica attend school.

Box 2: Workers’ qualifcations in China and India: development challenges

China rates just 4 per cent o its workorce as highly qualied. Only 36 per cent o workers have

a lower secondary-school qualication. The remaining 60 per cent have little or no skills and are

regarded as “elementary workers”; these include some 200 million migrants rom rural to urban

areas. Four out o ve German enterprises in China consider the lack o qualied workers the

biggest obstacle to growth and competitiveness.* However, estimates show that one-third o all

secondary vocational education graduates are unable to nd appropriate jobs, and about a third o

university graduates ail to nd work during their rst year ater graduation.

Key elements o the “Opinion on Further Strengthening Eorts on Highly Skilled Workers Cultivation”,

issued by the Government in 2006, include encouraging a broader variety o providers to supply

training while also improving curricula and assessment; incentives to employers to hire more highly

skilled workers; special remuneration schemes targeting higher-skilled workers; increased training

or migrant workers and or business start-ups; and increased investment in training centres’ acili-

ties and in the teaching proession.

In India, employment growth is almost exclusively concentrated in the inormal economy, where

more than 90 per cent o India’s workers are employed at low levels o productivity and income.

Hal o the country’s population over the age o 25 has had no education and an additional third

have at best primary schooling. Four out o ve new entrants to the workorce have never had any

opportunity or skills training. While enrolment in technical education institutions has increased

(rom 2.1 million in 2000 to some 3.8 million in 2005), there is a very high drop-out rate in these

institutions. There is a huge shortage o teaching aculty in engineering colleges. At the same time,

signicant skills shortages are reported throughout the ormal economy. In the inormation tech-

nology sector alone, the current decit in engineers is estimated to be around hal a million.

In order to address these challenges, India adopted an ambitious National Skills Development

Policy in 2009. Its main aim, in the words o the Union Minister or Labour and Employment, is to

empower all individuals through improved skills, knowledge and internationally recognized quali-

cations to give them access to decent employment and to promote inclusive national growth. It is

envisaged, among other things, to increase vocational training capacity to 15 million students over

the 11th Five Year Plan period (2007-12).

* Gesellschaft für Technische Zusammenarbeit (GTZ China) 2009.




Priorities here include increasing access to education and training; improving thequality o apprenticeships; making training in public institutions more relevant to work-place needs by strengthening coordination and partnerships with the private sector; andcombining institution-based education and training with enterprise-based learning.

A common ramework or skills development

Meeting today’s and tomorrow’s skills needs

International experience shows that countries that have succeeded in linking skills

development to gains in productivity, employment and development have targetedskills development policy towards three main objectives:

■ matching supply to current demand or skills;

■ helping workers and enterprises adjust to change; and

■ building and sustaining competencies or uture labour market needs.

The rst objective is about the relevance and quality o training. Matching the provi-sion o skills with labour market demand requires labour market inormation systems togenerate, analyse and disseminate reliable sectoral and occupational inormation, andinstitutions that connect employers with training providers. It is also about equality o opportunity in access to education, training, employment services and employment, in

order that the demand or training rom all sectors o society is met.The second objective is about easing the movement o workers and enterprises

rom declining or low-productivity activities and sectors into expanding and higher-productivity activities and sectors. Learning new skills, upgrading existing ones andlielong learning can all help workers to maintain their employability and enterprises toadapt and remain competitive.

The third objective calls or a long-term perspective, anticipating the skills thatwill be needed in the uture and engendering a virtuous circle in which more and bettereducation and training uels innovation, investment, technological change, economicdiversication and competitiveness, and thus job growth.

A holistic approach

At its 97th Session in 2008 the International Labour Conerence called or a holisticapproach to skills development encompassing the ollowing eatures:

(1) continuous and seamless pathways of learning, starting with pre-school and primaryeducation that adequately prepares young people or secondary and higher educa-tion and vocational training, going on to provide career guidance, labour marketinormation and counselling as young women and men move into the labour market,and oering workers and entrepreneurs opportunities or continuous learning toupgrade their competencies and learn new skills throughout their lives;

(2) development o core skills – including literacy, numeracy, communication skills,teamwork, problem-solving skills and learning ability – which, along with aware-ness o workers’ rights and an understanding o entrepreneurship, are not linked



19PART II A strategic framework to bridge training and the world of work

to perormance in specic occupations but orm the building blocks or lielonglearning and adaptability to change;

(3) development o higher-level skills – proessional, technical and human resourceskills – enabling workers to prot rom or create opportunities or high-qualityand/or high-wage jobs;

(4) portability o skills, based rst on core skills, so that workers can apply their exist-ing knowledge and experience to new occupations or industries, and second onsystems that codiy, standardize, assess and certiy skills, so that levels o compe-tence can be easily recognized by social partners in dierent labour sectors acrossnational, regional or international labour markets; and

(5) employability (or wage work or sel-employment), which results rom all theseactors – a oundation composed o core skills, access to education, availability o training opportunities, motivation, ability to take advantage o opportunities orcontinuous learning and support in doing so, and recognition o acquired skills.

A life-cycle perspective

Skills development can ruitully be viewed rom a lie-cycle perspective o building,maintaining and improving skills. Policy interventions need to be designed accord-ingly. The essential stages can be summarized as ollows:

■ Children: building important oundation skills through early childhood and initial

education, keeping in mind that the benets o these investments will be reaped inthe longer term.

■ Young people: consolidating oundation skills and gaining important workplaceskills and experience or a successul transition rom school to work.

■ Mature and older workers: maintaining and upgrading existing skills and gainingnew skills while also certiying the skills and competencies acquired in the work-ing lie.

It is also important to recognize that skills build upon one another, and that acquir-ing oundation skills in literacy and numeracy, as well as “learning to learn”, are abso-lutely essential or acquiring urther skills and competencies.

Given the inevitable limitations on resources, dicult trade-os will need to bemade between dierent policy objectives in determining priorities in public invest-ments in skills development.

Convergence across policies

Skills and employment policies should be viewed together. The ull value o one policyset is realized when it supports the objectives o the other.

One o the main challenges o public policy is to oster institutional arrangementsthrough which government departments, employers, workers and training institutionscan respond eectively to changing skill and training needs, and indeed play a strategic

and orward-looking role in anticipating uture needs. For investments in training toyield maximum benet to workers, enterprises and economies, countries’ capacity orcoordination is most important in three areas:




(1) connecting basic education to technical training, technical training to labourmarket entry, and labour market entry to workplace and lielong learning;

(2) ensuring continuous communication between employers and training providers sothat training meets the needs and aspirations o workers and enterprises; and

(3) integrating skills development policies with other policy areas – not only labourmarket and social protection policies, but also industrial, investment, trade andtechnology policies, and regional or local development policies.

Countries use a variety o coordination mechanisms: national inter-ministerialbodies; sector-based bodies bringing together training institutions and providers withemployers’ and workers’ representatives; and decentralized local bodies. These mecha-

nisms involve substantial investments o time and money, and they work when, and onlywhen, all stakeholders can see their own objectives supported by others. For example:

■ line ministries responsible or public inrastructure, research and innovation, envi-ronmental protection, international competitiveness and regional integration – toname just a ew – rely on a skilled workorce;

■ employers seek a well-trained workorce capable o urther learning so that theirenterprises can take advantage o new technologies and adapt to changing marketconditions; and

■ workers and their trade unions know that time spent acquiring skills leads to betteremployment and standards o living.

In sum, the eective utilization o skills in the workplace both depends on andcontributes to conditions conducive to innovation and enterprise development; eectivelabour market orientation and mediation services; and well-inormed decisions abouteducation and training policies.



Robust training and skills strategies and policies are constructed rom a number o building blocks. These include anticipating uture skills needs; participation o socialpartners; sector approaches; labour market inormation and employment services; train-ing quality and relevance; gender equality; broad access to training; nancing training;and assessing policy perormance.

Anticipating uture skills needs

Leaders o the G20 stressed in Pittsburgh that “[i]t is no longer sucient to train work-

ers to meet their specic current needs; we should ensure access to training programsthat support lielong skills development and ocus on uture market needs”.It is thereore essential to be able to anticipate skills needs and to align training

provision with changing needs in the labour market. This applies to change in the typesand levels o skills needed as well as in occupational and technical areas.

Overall, demand is growing or non-routine analytical skills involving creativity,problem-solving, communication, teamwork and entrepreneurship – all skills that helpworkers to maintain their employability and enterprises their resilience in the ace o change. Conversely, demand is decreasing or more routine skills in unctions subjectto automation, digitization and outsourcing.

A number o methods are used to orecast uture skills needs. These include

orecasting occupational and skills proles at various levels o disaggregation; socialdialogue; labour market inormation systems and employment services; and analysis o the perormance o training institutions, including tracer studies.

An important element o the European Commission’s “New Skills or New Jobs”initiative is its ocus on orecasting uture skills needs. The work includes orecastingsupply and demand or skills at the EU level to 2020, improving member States’ ownorecasting systems, and producing skills needs assessments in 18 sectors. The aim isto use better cooperation with social partners and a common skills language (in termso educational attainment and job content) to improve matching workers to jobs incurrent labour markets and preparing them or uture jobs. The Commission estimatesthat providing all citizens with adequate skills will increase GDP by as much as 10 per

cent in the long run (EC, 2010).Experience rom various countries provides important lessons on the limits o skills orecasting: crucially, that it is better to ocus on providing adaptable core, trans-

Building blocks …Part iii

… of strong training and skills development strategies




versal skills, and especially on building the capacity to learn, than on planning trainingto meet detailed orecasts o technical skill requirements, because these may changebeore curricula can adjust. Shorter training courses, which build on solid general tech-nical and core skills, can minimize time lags between the emergence o skill needsand the provision o appropriate training. Quantitative analysis based on labour marketinormation is good, but reliable only when complemented by qualitative inormationrom employers and workers.

Alongside the complex process o anticipating what skills will be needed, it isimportant to take into account individuals’ own educational and career aspirations.Social expectations and stigma attached to dierent kinds and levels o training, and

the quality o the jobs to which they lead, may trump the best supply and demand analy-sis. Some economies are starting to see unintended consequences o their eorts toraise education rates while others have a balance across types and levels o education,providing high-quality training in non-academic elds and maintaining good remu-neration and societal appreciation or related jobs.

Box 3: Anticipating skill needs and stimulating growth

■ Ireland’s Expert Group on Future Skill Needs (EGFSN) analyses uture skill needs, and develops

proposals or how to meet them, through a broad membership including business representa-

tives, educationalists, trade unionists and policy-makers. The breadth o participation enablesEGFSN to identiy changing occupational proles within sectors and changes in demand or

various occupations. EGFSN identied the key elements to be included in a generic skills port-

olio or the uture: basic or undamental skills (literacy, numeracy, ICT); people-related skills

(e.g. communication, team-working); and conceptual/thinking skills (collecting and organizing

inormation, problem-solving, planning and organizing, learning to learn, innovation and crea-

tive skills). They provide advice on how to improve jobseekers’ awareness o sectors where there

is demand or skills and o the qualications required.

■ The wide replication o Brazil’s national training institution, SENAI, is a good measure o its

success. SENAI is run by an association o industries, unded by a levy on the industrial pay-

roll, and has sibling institutions serving dierent sectors (e.g. agriculture, small enterprise, the

service sector). SENAI’s “Prospecting Model” adjusts training provision based on analysis otake-up rates o emerging technologies and new orms o work organization. The model gener-

ates estimates o job requirements over a ve-year period by drawing on studies o technological

and organization prospecting, tracking emerging occupations and monitoring trends in demand

or vocational training. However, the proportion o young people able to take advantage o

training opportunities is limited by the quality o basic education.

■ At the core o the Republic of Korea’s sustained growth pattern lies a government-led skills

development strategy. The rapid progress in closing the productivity gap refects an economic

development strategy based on investment and research and development. Investment in a

well-educated and highly skilled workorce was an integral part o encouraging adoption o new

technologies. A current challenge is to avert shortages in the more highly skilled vocational

occupations by increasing the attractiveness o non-academic skills development paths.



23PART III Building blocks of strong training and skills development strategies

Participation o social partners

The world o learning and the world o work are separate. One imparts learning; theother produces goods and services. But neither can thrive without the other. The art o successul skills policies is to construct sound bridges that connect the two worlds toserve both.

A strong partnership between government, employers and workers is an essen-tial eature o an eective and enduring bond between the world o learning and theworld o work. This involves sound unding arrangements in order to provide the rightincentives to all parties to invest in the right skills mix at the right time (box 4). It also

involves the participation o employers’ and workers’ representatives in the design,implementation and evaluation o skills policies. This participation may take a numbero institutional orms including national, regional and sectoral councils, boards andcommittees.

Social dialogue and collective bargaining at the enterprise, sector and/or nationallevels are highly eective in creating incentives or investment in skills and knowl-edge. These processes can create a broad commitment to education and training anda learning culture, strengthen support or the reorm o training systems, and providechannels or the continuous exchange o inormation between employers, workersand governments. In addition to promoting skills development, social dialogue andcollective bargaining can also be instrumental in ensuring that the benets o improved

productivity are distributed equitably and eciently.Employers are important providers o training. Young people entering the labourmarket acquire both technical skills and insight into the world o work through ormaland inormal systems o apprenticeship, internship and other types o workplace expe-rience. Employers have a responsibility to provide, and employees a responsibilityto pursue, opportunities or lielong learning, whether on the job or through trainingproviders, to help maintain productivity and employability in the ace o change.

Agreements between employers and workers are important means o promotingworkplace learning and o ensuring that increased skills lead to higher productivity,beneting both employers and workers (box 5).

The strategy paper on lielong learning prepared by employers’ representatives or

the G20 emphasized the importance o employers’ contributions to skills developmentpolicies across the ollowing areas: providing training; matching education and trainingto the needs o the labour market; encouraging and supporting lielong learning; andmaintaining the relevance o education and training through continuous evaluation andsystem improvements.10

Social dialogue also plays a key role in processes to reorm technical and voca-tional education and training (TVET) systems and in shaping national skills develop-ment strategies. Dialogue is conducive to successul reorm, as a process bringing allactors into alignment with a shared commitment to working towards a common goal.

10 IOE and Business and Industry Advisory Committee to the OECD (BIAC), Lielong learning strategy, paper

prepared or G20 meeting, Johannesburg, March 2010.




Sectoral approaches

A tripartite ILO Global Dialogue Forum on strategies or sectoral training and employ-ment security11 concluded with the ollowing consensus-based recommendations onhow sectoral approaches can be made most eective:

■ Base sectoral approaches on close collaboration between the social partners atnational and local levels.

11 ILO, Upskilling out o the downturn: Global Dialogue Forum on Strategies or Sectoral Training and Employment

Security, Geneva, 29–30 March 2010.

Box 4: Labour market actors and their roles in training

ILO Recommendation on Human Resources Development, 2004 (No. 195) identies shared

responsibilities or skills development:

■ Govenmens have primary responsibility or education, pre-employment training, core skills,

and training the unemployed and people with special needs.

■ The socl pnes play a signicant role in urther training, workplace learning and on-the-job

training.

■ indvduls need to take advantage o education, training and lielong learning opportunities.

Box 5: Examples of social dialogue for skills developments

■ In Germany, continuing training concerns all partners at the enterprise level and is a subject

or collective bargaining. Work councils have legally dened participation rights on vocational

training schemes, or example in implementing training schemes at enterprise level, especially

when measures taken by employers necessitate skills upgrading, and in consulting with respect

to workers’ participation in external training centres. The well-known dual system o education

in Germany, combining classroom and workplace learning, involves extensive participation by

companies.

■ Consultative mechanisms on industry skills needs in Australia contribute to identication

o needs and evaluation o the skills system, as well as certication and accreditation. The

National Quality Council ensures industry standards and advises the Government and the

Skills and Workorce Development Action Group, composed o ministers at state and ederal

level. At the state or territory level, industry advisory boards work with training authorities to

oversee the regulation, policy, delivery and unding o training, and are supported by industry

training advisory boards composed o business and worker representatives. Industry skill coun-

cils develop training packages based on skills requirements and occupational outcomes in

11 industry sectors, each covering a group o industries, which work in consultation with busi-

ness associations.




■ Use bipartite or tripartite sectoral councils to match sectors’ demand or skillswith training provision, anticipate uture labour market and skill needs, and assessthe quality and relevance o training programmes.

■ Recognize each stakeholder’s roles, rights and responsibilities in promoting a lie-long learning approach to meet sectors’ skill needs.

■ Embed sectoral approaches to skills development within long-term nationalgrowth strategies, thus linking (national) top-down and (sectoral) bottom-up train-ing strategies.

Good workorce skills are also a undamental condition or the emergence o clusters – groups o enterprises that gain perormance advantages through their mutual

Box 6: Skills development in the Netherlands: sectors and social partners

Vocational education in the Netherlands is a shared priority o government, enterprises and workers.

The popularity and eectiveness o the Dutch system o vocational education may be attributed in

part to the important role played by the social partners in initial training and lielong learning, both

o which are organized largely by industrial sector.

Initial training is organized in three levels: lower secondary level, combining general education

and elementary vocational education; intermediate level, ocusing on labour market qualica-

tions, through a mix o classroom and workplace learning; and tertiary education. Costs borne by

employers include student allowances, coaching time by company trainers, training the trainers,

guest teaching in schools, perhaps also providing equipment to schools, and contributing to

the development o the school curriculum. The apprenticeship system is partly nanced by the

Government and partly by enterprises, in recognition that the system serves both public and private

interests. There are 17 national expert centres or vocational education and business, nanced by

the Government and organized by sector, e.g. or construction, health care, engineering proessions,

administrative proessions, logistics and transport, and agriculture. The boards o these centres are

made up o educators, employers and trade unionists. The centres’ tasks typically include advising

the Government on the qualication structure and competence proles or the sector, training com-

pany trainers and monitoring changes in skills demand.

Lifelong learning is supported through some 100 bipartite sectoral unds or training and develop-

ment. Most are nanced according to collective agreements between social partners in the sector,

usually to the tune o between 0.5 and 1.0 per cent o companies’ wage bill. The unds are increas-

ingly invested in areas such as research on new skill needs, career guidance inormation and

training materials or the sector. This unding is especially important or small and medium-sized

enterprises (SMEs), which normally do not have in-house training proessionals.

Key areas o competitiveness and potential long-term growth or the Dutch economy have been

identied through a bottom-up process organized by the Innovation Platorm, a high-level council

chaired by the Prime Minister. The involvement o the sectoral social partners is not limited to

a specic part o the system, but starts with initial vocational education and includes lielong

learning and key areas or innovation and competitiveness.




proximity. Specialized competencies are developed both within and between rms,oering a competitive advantage or the rms within the cluster. A proactive role orgovernments in establishing linkages with multinational companies to oster the devel-opment o clusters, and in supporting cooperation between rms in clusters, can help tostimulate the adoption o technologies and skills upgrading programmes.

Labour market inormation and employment services

Labour market inormation systems generate, update and disseminate inormation on

current and uture skill needs. This supply o critical inormation on an ongoing andtimely basis is hal the story.The other hal is the transmission mechanisms that make this continuous fow o

timely inormation available to education and training institutions, private market train-ers, employers, trade unions, young people and their amilies, and displaced workers.

Public employment services (PES) have a critical role to play in making inormationavailable in the orm o career guidance, vocational counselling, and material on accessto training and job-matching services. PES help workers and employers make transitionsin the labour market through job-matching services, inormation and access to labourmarket programmes (on, or example, skills training or retraining, sel-employment andstarting a business); and they help jobseekers choose the best options to improve their

individual employability, through dissemination o reliable labour market inormation,career guidance and counselling, and a spectrum o tools and techniques to assist insearching or jobs. Many PES also administer unemployment insurance programmes asa means o providing temporary nancial support to workers.

Private employment agencies have an increasing role to play in improving labourmarket unctions through job-matching and the provision o advice. Many countries

Box 7: Employment services

In Canada, Human Resources and Skills Development Canada (HRSDC) helps students, workers

and employers to anticipate the skills that will be needed in the uture. CanLearn is an online post-

secondary education resource that provides inormation about education and training opportuni-

ties, tools to assess how well those opportunities match individuals’ aspirations, and inormation

on nancing education and lielong learning. The Youth Employment Strategy helps at-risk youth,

post-secondary students and graduates acquire the skills and work experience necessary to increase

their success in the labour market. In an eort to help employers retain their skilled workers during

economic downturns, Canada’s Work-Sharing programme provides employment insurance benets

to supplement regular wages or workers on short working weeks.

The National Employment Service (SNE) in Mexico operates emergency programmes to help workers

and employers acing economic or other hardships. To meet those needs, SNE has diversied, posi-

tioning itsel as an instrument o employment policy by acilitating more rapid adjustment in the

labour market or both workers and enterprises. It has expanded its coverage to include workers at

risk o losing jobs, the unemployed and the underemployed.




have improved the regulation o private employment agencies to enable and monitortheir compliance with labour standards (including in areas o equal opportunity) andmobilize them to combat human tracking and increase training services.

Training quality and relevance

A great deal o eort is required to make sure that skills development systems deliverboth the quantity and the quality o training needed. This entails in the rst instancean adequate supply o qualied teachers, trainers, directors o training institutions, and

master cratspersons to take on apprentices; the provision o opportunities or them toperiodically upgrade their own skills; and conditions o work comparable with those inindustry so as to attract the most talented sta.

Well-staed and adequately unded training institutions are essential to skillsdevelopment strategies and policies. Periodic reviews may be necessary to assess theireectiveness in meeting their goals and their eciency in using scarce resources.

Existing training inrastructure needs constant innovation to keep up with newtechnologies and learning methods. Flexibility and agility are vital to ensure that insti-

Box 8: Improving skills development systems

■ In Spain, the Government seeks to bring the numbers o students in vocational training closer

to the average in other European countries, reduce school drop-out rates and prepare workers

or new jobs in emerging sectors. Eorts to increase the demand or training include providing

education grants to more young people, improving the supply o training by engaging enter-

prises and linking training more closely to their needs, and raising social perceptions o voca-

tional training. These and other steps comprise the Government’s “road map” towards more

rapid reorm and increased graduation rates. The Sustainable Economy Law (2009) includes a

chapter on proessional training aimed at avoiding skills gaps that would slow the transition to

a lower-carbon economy as well as at realizing the potential or substantial job growth.

■ Skills systems in many Latin American countries are anchored in national training institutions

whose management structures bring together representatives o ministries o labour and educa-

tion, employers’ and workers’ associations, and sectoral and regional bodies. Institutions such

as SENAI and its sibling organizations in specic sectors in Brazil are tasked with implementing

national human resource development policies and are nanced through employer levies and

national budgets as laid down in law.

■ In Saudi Arabia, oreigners comprise just over hal the labour orce. One objective o the national

skills policy has been the so-called “Saudization” o the workorce. Fast-growing sectors such

as electronics, ICT, construction, rerigeration and air-conditioning, and tourism are creating

new occupations. One o the strategies adopted to attract Saudis into these new occupations

and to provide good-quality training has begun with improving the quality o TVET and raising

the status o the teaching proession generally, or example by establishing dedicated teacher-

training colleges and combining academic preparation, educational theory and practice, and

experience in industry or new and existing teachers.




tutions remain able to respond to the evolving challenges posed by dynamic labourmarkets. Training institutions must have the capacity to periodically adapt curriculaand update teachers’ and trainers’ skills to the changing needs o the world o work.

Good-quality training outcomes urther depend on maintaining a high quality o training contents, methods, acilities and materials. Apprenticeships, and more generallythe combination o classroom-based and work-based training, produce the best results.Skills standards should be set and tested by involving stakeholders in the process.

Lielong learning critically depends on a strong integration between education,training and work.

A skills-based qualication system can accommodate multiple pathways through

education, and between education and work.Flexible workplace training and learning arrangements are conducive to develop-ment o a broad range o skills. Workplace training allows students not only to learnthe technical skills related to a particular job, but also to develop sot skills, such ascommunication, ICT, teamwork, problem-solving and the ability to learn, that are evermore critical in changing market environments.

Gender equality

Training is an important means o pursuing the overall goal o equality o opportunityand treatment or women and men in employment and occupation. Opportunities in the

labour market are important means or women to achieve greater equality with men;and the more skilled the emale workorce is, the wider women’s choices in labourmarkets will be, and the more likely they are to secure equal treatment.

Overcoming the challenges that conront women in gaining access to educationand training and in using this training to secure better employment requires the adop-tion o a lie-cycle approach. This includes improving girls’ access to basic education;overcoming logistic, economic and cultural barriers to apprenticeships and to second-ary and vocational training or young women – especially in non-traditional occupa-tions; taking into account women’s home and care responsibilities when schedulingworkplace-based learning and entrepreneurship training; and meeting the trainingneeds o women re-entering the labour market and o older women who have not had

equal access to opportunities or lielong learning.

Broad access to training

Equal access or all to education, vocational training and workplace learning is a unda-mental principle o cohesive societies. Constant attention is required to ensure it isapplied in reality.

Some groups o people may require more attention than others i they are to bene-t rom the opportunities to develop their capacities through education and training.These include under-represented groups; minorities; people with disabilities; immi-

grants; people rom particularly disadvantaged communities; people who have beenunemployed or long periods; and people caught up in large-scale redundancies as aresult o restructuring.




Youth

Young people out o employment, or with only short spells in employment, having leteducation too early and with inadequate skills, are everywhere at high risk o economicmarginalization and social exclusion. Upgrading their skills is essential in helping themto enter, or return to, the labour market. The more relevant the training to uture employ-ment prospects, including workplace training, the better the outcomes.

Young people have been hit particularly hard by the recent economic crisis, whichhas exacerbated existing structural problems o high levels o youth unemploymentand diculties in entering the labour market in many places. Young people aged 15–24account or 25 per cent o the global working-age population, yet their share in total

unemployment reached 40 per cent during the crisis. The OECD’s review o “Jobs orYouth” suggests that improving the skills o young people, and hence their long-termcareer prospects, requires action on three ronts: (1) do everything possible to preventstudents dropping out o school; (2) promote the combination o work and study; and(3) oer every young person a “second chance” at a qualication. The UK’s programmeto keep young people in education and training and Australia’s and France’s actionsduring the economic downturn exempliy this approach (box 9).

Incentives to employ and train young people include wage subsidies and/or sub-minimum-wage provisions, which are oten needed to encourage employers to hireapprentices by compensating them or the time spent providing on-the-job training.Sub-minimum wages or youth or recent labour market entrants exist in 12 OECD

countries out o 22 with a national minimum wage.In less developed regions, broader availability o better-quality education is needed

to enable young people to acquire core skills and then go on to learn occupational andwork skills. Specic policies are necessary to improve training and employment serv-ices or disadvantaged young people, especially those who have been removed romchild labour, who live in rural areas or whose amilies work in the inormal economy,with a view to helping them enter the ormal labour market and improving their long-term employability.

People with disabilities

Worldwide, our out o ve persons with disabilities live below the poverty line. It isa massive loss both to them and to their countries when they are unable to contributeto national development. Public interventions can help to include disabled persons inregular training programmes. On-the-job training and targeted training in transitionalwork environments or separate centres may be needed by some disabled persons, butthese acilities must be well designed and accompanied by appropriate employmentservices i they are to help people with disabilities to go on to obtain productive main-stream employment.

Migrant workers

The potential or labour migration to contribute to development objectives in bothcountries o origin and countries o destination can be explored through a variety o means, including bilateral and multilateral arrangements. Oering equal opportunities




Box 9: Keeping young people in school and on a path to work

Learning Agreements in the United Kingdom aim to raise participation in education and training o

16–17 year-olds without a lower secondary qualication. They comprise two elements:

■ The Learning Agreement itsel: a negotiated, personalized agreement ocusing primarily on the

learning and support needs o the young person. The agreement also seeks the engagement and

support o employers in helping to re-engage their young employees with learning.

■ Financial incentives to encourage employees to take up the Learning Agreement oer. A range

o these incentives are being tested, including or example completion bonuses.

The Learning Agreement model aims to reach all 16–17 year-olds in the pilot areas who are injobs but without accredited training. Priority is given to those who do not hold a lower secondary

qualication and to those who are working 16 hours a week or more. All o the pilots were required

to enter into a contract with Train to Gain – a programme launched nationwide in 2006 providing

employers with ree skill brokerage services to identiy the skills gaps o their workorce and the

best provision and unding available to ll them.

Measures in Australia to improve young people’s skills while also ghting unemployment emphasize

education and training rather than allowing young people to languish on unemployment benets.

Australia’s states and territories agreed in April 2009 to bring orward to 2015 the goal o having

90 per cent o under-25 year-olds having completed the equivalent o an upper secondary (ISCED

3) qualication. The ederal Government is committed to making participation in education and

training the single most important precondition or receiving income support or youth aged 15–20.Employers will be nancially encouraged to recruit and retain new apprentices and trainees through

a completion payment under the “Securing Apprenticeships” wage subsidy.

Similar targeted measures in France were launched in April 2009 as an emergency plan or youth

employment with the ollowing aims: (1) acilitate the school-to-work transition by promoting

apprenticeships and combined work and training opportunities; (2) promote the transormation o

internships into permanent employment contracts; and (3) provide additional training and employ-

ment opportunities or young people who are detached rom the labour market. In September 2009,

these employment measures were reinorced in the broader youth strategy “Acting or Youth”,

which also covers improving careers guidance in school; preventing 17–18 year-olds rom dropping

out o school; helping young people to become nancially autonomous; and encouraging young

people to become better citizens.

A generation o multiservice youth programmes in Latin America have combined education, demand-

driven job training and internships. Initiated in Chile at the beginning o the 1990s, Jóvenes pro-

grammes have been introduced in Argentina, Colombia, the Dominican Republic, Haiti, Panama,

Paraguay, Peru, Uruguay and Venezuela. The Chile Joven programme was created as a response to

the long-term negative eects o the economic downturn o the previous decade. Subsequent pro-

grammes in other Latin American countries were designed to address the problems aced by poorly

educated young people rom low-income backgrounds trying to enter the labour market. Generally,

eects on employment across the Latin American programmes are positive; the largest impact is

on improving engagement in ormal employment or in employment oering non-wage benets.

Signicantly positive eects on employment and earnings or women were ound in Peru’s Projoven,

Panama’s ProCaJoven and Colombia’s Jóvenes en Acción programmes.

Source: OECD, Jobs for Youth: Synthesis Report (Paris, OECD, forthcoming, 2010).




to migrant workers and meeting their training needs, and then avoiding discriminationin education and training or their children, is an issue o growing salience, particularlyin countries with ageing populations.

Small enterprises, self-employment and the informal economy

People working in small enterprises and in sel-employment, including those in ruralareas and in the inormal economy, as well as people in irregular work and precari-ous employment, should also have access to skills development and lielong learningprogrammes. “Second chance” programmes, as well as drop-out prevention at an earlierstage, contribute to social inclusion. Vocational guidance and employment services can

oten be improved to match people with training opportunities and to get trained peopleinto jobs. Specic and targeted policies are required to assist small enterprises in invest-ing in the skills required.

Cooperative solutions, including the pooling o inormation and support mecha-nisms, oer a good approach to skills development or small enterprises. Community-based training combined with post-training support in entrepreneurship and access tocredit and product markets can oster local enterprises. Pre-training investment in liter-acy (especially or women), and in participatory planning tools within communities toidentiy services and products with growth potential, is also required.

Education and skills training orm a logical part o a comprehensive approach toacilitating the transition o inormal activities to the ormal economy. Ways o recog-

nizing skills acquired through inormal training and on-the-job experience may helpworkers secure better jobs. Upgrading the technical quality o inormal apprenticeships,paying attention to how this kind o training can open up opportunities in particular orgirls in non-traditional occupations, and improving working conditions and health andsaety practices can help young people not only acquire skills but ease their way intothe ormal economy.

Not just training, but using that training

Eorts o all the kinds described above show their worth in greater sel-esteem on thepart o workers and more productive and versatile workplaces. Training needs to be

accompanied by policies and employment services to help keep skills up to date andworkers employable. For the potential o education and training to be ully realized,complementary policies are needed to help amilies balance work and amily lie, tohelp keep older workers in productive employment, and to help young people capitalizeon their training.

To be eective, then, a skills strategy cannot be developed in isolation but mustbe embedded in the wider economic and social policy environments. For instance, innearly all countries there are large “gaps” in training participation between older andyounger people and between the less and more educated. Moreover, many individualsalready have skills that are unused or underused: this is particularly the case amongmigrants, women and older workers. Tackling these issues requires a broader approach,

going beyond a narrow ocus on education and training policies to incorporate otherlabour market and social policies (e.g. retirement policies, pay-setting arrangementsand amily-riendly employment policies) that can also play an important role. For




example, reorming early retirement provisions may improve the expected returns romtraining older workers, and oering more fexible arrangements or combining studyand work may make it easier or people subject to time constraints, especially womenwith young children, to participate in training.

Financing training

Initial education and training and lielong learning benet individuals, employers andsociety as a whole. Economic principles dictate that the costs or services with public

and private benets should be shared between public and private unding, or else toolittle training will be provided or taken up. While government is a key investor, enter-prise involvement is also needed both to provide a stable and sustained means o nanc-ing training and to ensure its relevance. Financing schemes are thus best establishedthrough social dialogue, according to good principles set out in the Human ResourcesRecommendation (see box 4 above). Mechanisms or doing this will vary accordingto countries’ economic and political circumstances and the degree and level o socialdialogue established.

Financing skills development is dealt with in dierent ways across countries,combining a variety o means.

Govenmen

Governments have the responsibility or initial training as part o universal education,and or retraining ocused on the unemployed or workers at risk o unemploymentduring economic crises. National, regional and/or local governments may nancetraining directly and/or promote co-nancing by creating incentives or employers andindividuals to invest in training. Incentives may involve subsidizing training throughbudget allocations to training institutions; relies rom general revenue; payment o tuition charges and ees; unding or in-service training; vouchers and loans providedto trainees; exemptions rom employer payroll levies where training is provided; andgrants made available to rms to undertake certain designated orms o training both

on and o the job.

Employes

Direct or indirect nancing o training by employers is a clear statement o the impor-tance o continuing education and training in maintaining and increasing productivity,competitiveness and versatility. Payroll ees or levies can be eective when combinedwith eective governance and communication mechanisms to maintain the relevanceo training to employers. Employers may be exempted rom training levies or chargedat a reduced rate in proportion to the training they provide to their employees, whetherinternally or externally. In other arrangements, employers may provide grants to train-

ing institutions, or invite several training providers to compete or training coursesnanced by one or more employers. Smaller enterprises may come together to arrangetraining jointly to reap economies o scale within clusters or communities.




indvduls

Workers invest time and money in keeping their skills and competencies up to date,taking responsibility or maintaining their employability in the ace o economicchange. Some schemes involve orgoing income during training in exchange orhigher income ater completion o training; this may be easible or some individuals,especially where training costs qualiy or tax credits/deductions or where subsidizedloans are available or training. However, these schemes are not sucient to enableworkers at low income levels, those with amily responsibilities or those in the inor-mal economy to participate in lielong learning; here employer or public provision o

training is necessary.

Assessing policy perormance

Measuring the outcomes o skills development systems is not straightorward. Pooroutcomes are more readily spotted, in the orm o mismatches, shortages and gaps.Good outcomes are easily lumped into other indicators, or example low unemploy-ment or increased productivity, exports or investment.

Nevertheless, measuring the outcomes o skills systems and policies is essential inorder to monitor and improve their eectiveness and relevance. Four key elements o a

sound assessment process are:

■ quality assurance, based on employers’ and trainees’ eedback, to capture thelabour market outcomes o training: this represents the monitoring o perorm-ance that training institutions, students, their amilies, their prospective employersand taxpayers need most;

■ regular and timely labour market inormation on current demand, brokendown by occupation and skills level, including early identication o sectoraltrends and o changes in technology and occupations leading to changing skillscomposition;

■ quantitative and qualitative orecasting o uture demand or skills;

■ channelling o inormation to training providers, career guidance and employ-ment services to enable them to adapt training provision to changing demand.

Box 10: Financial incentives for training in Argentina

Argentina uses its tax credit regime to target incentives to SMEs to invest in training their workers.

Under this regime, SMEs can nance training projects up to the equivalent o 8 per cent o total

remuneration. They can also be reimbursed or costs incurred in undertaking skills assessment and

certication in addition to actual training – an incentive to boost recognition o skills learned inor-

mally or on the job. This eature helps make the programme (begun in 2007) attractive to SMEs,

which comprise 70 per cent o beneciaries.




Illustrations o recent training policy applications

Skills for economic recovery

In response to the global economic crisis, all G20 countries have stepped up investmentsin training. Measures widely adopted have included additional training combined withreduced working hours and part-time unemployment benets, skills upgrading or work-ers changing jobs and initial training or young people entering the labour market.

At its 98th Session in June 2009, the International Labour Conerence adopted theGlobal Jobs Pact to guide governments in pursuing a jobs-led recovery. The Global JobsPact acknowledges the key role o training and employment services in both immediate

crisis response and longer-term development.The Global Jobs Pact encouraged countries to invest in training in order to:

(1) prepare displaced workers or dierent kinds o jobs expected in the post-crisisrecovery;

(2) use the downtime to invest in upgrading skills o employees, and thus improveboth their employability and employers’ productivity; and

(3) target training to avoid skill constraints in implementing stimulus programmes.

Examples o country responses are given in box 11.

Box 11: Training to speed recovery in employment

(Re-)training displaced workers

The majority o Canada’s employment activation measures have been devolved to provincial and

territorial governments and to community organizations, in order to better meet local needs as well

as to avoid duplication o eort across levels o government. Programmes already in use with proven

track records were expanded to support workers training or new jobs. For example, the “Second

Career” programme in the province o Ontario provides laid-o workers with training in occupations

deemed to be in high demand, supporting tuition and living costs or up to two years.

Retraining or displaced workers was also largely decentralized to local government in Indonesia.

The Ministry o Manpower and Transmigration allocated IDR 300 billion (about US$ 31.5 million)

to upgrade workers’ skills and employability, targeting training or jobseekers and migrant workers

as well as upgrading the inrastructure o training centres. Those regions with severe unemployment

and large numbers o laid-o workers received unding or training and were able to target it to meet

local demand. Three elements have enhanced the eectiveness and relevance o the training: part-

nerships with local business; incorporating entrepreneurship in the training; and the use o mobile

training centres to reach laid-o workers who had returned to rural communities.

Upgrading employees’ skills

Work-sharing programmes, such as in Germany and Canada, help avert lay-os during temporary

downturns by oering income support to subsidize lost wages when employers opt to reduce working

time rather than to reduce their workorce. The income support is typically provided through unem-




Skills for green jobs

The goal o cutting carbon emissions poses signicant challenges to the world o work.The ILO estimates that employment in carbon-intensive sectors accounts or about38 per cent o jobs across the world, accounting or some 600 million workers (World

o Work Report 2009). Also, as with any other structural change, the speed and extento the transition to a greener economy will be substantially aected by how success-ully technical and entrepreneurship skills are matched to new job requirements, howast new technology spreads and how eective labour market policies are in supportingworkers and businesses in making the transition.12

12 For example, simulation analyses estimate that shiting taxes away rom labour and onto CO2 emissions couldlead to net job gains o 2.6 million in developed countries and over 14 million worldwide (ILO, World o Work

Report 2009: Global jobs crisis and beyond (Geneva, 2009).

ployment insurance benets or other social income programmes. Social dialogue to gain agreement

on such schemes is essential. In Germany, reimbursement o employers’ social security contribu-

tions increases to 100 per cent i the employer devotes downtime to sta training. In Canada,

individual training plans range rom upgrading skills in current jobs to preparing or promotions and

even training or jobs outside the company. Workers remain employed – helping retain aggregate

demand in hard-hit communities – and acquire new skills, while employers are able to retain sta

and avoid having to train new workers when markets pick up.

In France, national and particularly regional government provided generous unding to help enter-prises train or retrain workers, oten in combination with reduced working hours, but without loss o

salary, as an alternative to lay-os. A Social Investment Fund nanced by the State, the European

Social Fund (€5 billion) and social partners (€500 million) was set up to nance measures which

promote the employment o young people, enable workers made redundant to re-enter the labour

market and acilitate access to vocational training.

Crisis-response measures in Russia included RUB 36.3 billion rom the ederal budget to imple-

ment regional programmes to upgrade the quality o the workorce by providing vocational training

to nearly 150,000 people and on-site training to 85,000 graduates.

Integrating training in public investment programmes

In the United States, training policies to prevent poverty among low-skilled and low-income workers

were one o the main ocuses o the American Recovery and Reinvestment Act o 2009. Some

US$4 billion was earmarked in 2009 to expand existing job training programmes and provide

grants or training and job placement in high-growth and emerging industry sectors such as renew-

able energy and health care. US$150 million was allocated to Pathways Out O Poverty, which

provides grants or job training directed towards the clean energy industry or individuals living

below or close to the poverty line. Skills measures accounted or about 0.6 per cent o the total

US$118 million invested in stimulating activities deemed important or “greening” the economy.

Box 11: Training to speed recovery in employment (continued)




Regulatory reorms and emissions targets will bring about downsizing and restruc-turing in emissions-intensive industries. On the other hand, employment growth can beexpected in renewable energies and activities to support energy eciency, especially inconstruction and transportation. What does it take to turn this potential into real jobs?

Part o the answer to that question lies in overcoming skills gaps.Although job growth in low-carbon activities is estimated to oset job losses inhigh-carbon ones, the skills needed in the new green jobs will not necessarily be the

Box 12: Skills for green jobs: illustrations of coordinated approaches

■ In Spain, high oil prices hurt the competitiveness o the automotive industry in Navarre in the

1980s and 1990s. Unemployment in the region soared to 13 per cent in 1993. The regional

government, working with industry, promoted wind-generated electricity as an alternative source

o employment as much as an alternative source o energy. Since then Navarre, a small region

o Spain with a population o just 620,000, has become Europe’s sixth largest producer o

wind power. The policy mix incorporated environmental and skill measures to respond to an

immediate economic crisis through a long-term development strategy. In the current economic

and employment downturn, Navarre boasts the lowest unemployment levels o any region in the

country. In the Environmental Training Plan o the Autonomous Community o Navarre, begunin 2002, the regional government responded to assessments carried out with regional industry

showing that skills gaps were opening up in areas not covered by initial vocational training and

were largely company- specic. To meet this need, the regional government and enterprises set

up a public training centre or renewable energies.

■ In South Africa, a public works programme addresses the problem o biodiversity and water

security. The Working or Water programme, launched in 1995 and administered through the

Department o Water Aairs, works with local communities on jobs and training. It also works

in partnership at national and local levels with the Departments o Environmental Aairs,

Agriculture, Forestry and Fisheries, and Trade and Industry. Technical training or up to 30,000

people per year targets marginalized groups, including young people (40 per cent) and people

with disabilities (5 per cent), and is coupled with training in core skills, lie skills, and saetyand health issues. Although many jobs created through the public works programme are o short

duration, attention is mandated on working conditions, transerable skills, and career paths

ater exiting the public works programme.

■ The objective o France’s National Plan or Mobilization o Territories and Industries or the

Development o Green Jobs and Skills is to support the creation o 600,000 green jobs by

2020. The Mobilization Plan is a collaboration between ministries, regions, training providers,

advisory bodies, social partners and employment agencies. Sectoral committees (comés de

flèes ) were set up in the 11 sectors considered most promising in terms o green jobs crea-

tion. The comprehensive implementation plan begins with identication o relevant proes-

sions, denition o training needs, setting up training and qualication pathways, training or

jobseekers in occupations suering shortages, and advocacy or the green growth plan.

Source: ILO: Sklls o geen jobs (Geneva, 2010a), country studies

http://www.ilo.org/skills/what/inst/lang--en/WCMS_144268/index.htm




same as those used in the jobs at risk in other sectors. Retraining is the key to smoothand equitable transition. Transversal skills as well as specic technical ones increaseadaptability and occupational mobility.

Skills policies and environmental policies are still oten dealt with in isolation romone another. One o the hallmarks o successul deployments o training programmes tospeed the transormation to lower-carbon activities and respond to other environmentalconcerns (box 12) is that they have overcome this policy coordination challenge.



There is wide agreement on the broad principles that shape good training policies andsystems; but there are wide disparities in their application and outcomes.

In consequence there are good grounds or acilitating urther exchanges o experi-ences, analysis and viewpoints to address some o the more intractable diculties acedin shaping good-quality training policies and achieving good outcomes. The databaseconstructed by the ILO Inter-American Centre or Knowledge Development in Voca-tional Training (ILO/CINTERFOR) provides one example o a successul network o vocational training institutions throughout Latin America that has maintained such anexchange o inormation or more than 40 years.13

Training and development cooperation

The G20 leaders’ commitment to support training eorts extends beyond their owncountries. They have also committed themselves to helping other countries undertakeeective skills development as a pathway out o poverty and towards more productiveand resilient economies.

According to OECD data on ocial development assistance (ODA) rom 2002to 2008, nancial commitments to education rom Development Assistance Commit-tee (DAC) countries – bilateral donors – more than doubled over that period, reachingUS$83 billion. The share o total ODA directed to education averaged between 11 and

15 per cent annually. However, o the total unding or education, TVET claimed only2 per cent on average.

Assistance to education rom multilateral donors (development banks and theUN) amounts to about a third o total unding rom bilateral donors, reaching aroundUS$31 billion in 2008, o which TVET receives an even smaller share – 1 per cent onaverage.

On average, about two-ths o the ODA destined or TVET targets low-incomecountries (with three-ths going to middle-income countries). ODA earmarked ortraining has increased substantially since 2006, but most o that gain went to middle-income countries.

13 For example, see the ILO/CINTERFOR database o good practices in the Americas at: http://www.cinteror.org.

uy/public/spanish/region/ampro/cinteror/ip/g20/index1.htm.

Sharing knowledge and experience




There is ample scope to build on current development cooperation programmesor skills development. Fruitul avenues could include engaging national institutions inurther exchange o experience, in particular in promotion o the training strategy orstrong, sustainable and balanced growth; integrating skills into national and sectoraldevelopment strategies, in particular through the UN Common Development Frame-work system; providing capacity-building and nancial help to expand the coverageand the quality o education and training available to disadvantaged groups; upgradingthe inormal apprenticeship systems which are the only means o acquiring skills avail-able to most young people; and building skills into current “aid or trade” initiatives.

Less direct but potentially equally crucial orms o support are the sharing o

knowledge and new research. Ministries, as well as academic institutions, continue towork on the intractable problems that call or better diagnostic tools and better under-standing o policy experience: or example, keeping young people in school and work;ensuring that education and training lead to improved employability; and positioninglearning in relation to work in such a way as to attract investment and stimulate jobgrowth. In addressing these and other imperatives, international organizations play animportant role in helping countries to develop and implement skills development poli-cies and in evaluating their eectiveness.14

Continuing inter-agency collaboration, particularly between the ILO and theOECD but in conjunction with other key agencies through the Inter-Agency Groupon TVET, could produce an analytical compendium on what works in applying the

conceptual ramework and using the building blocks or eective skills developmentor strong, sustainable and balanced growth.

Conclusion In a nutshell, the building blocks o any skills strategy must be solid oundation skillsand stronger links between the worlds o education and work.

This in turn requires good-quality education in childhood; good inormation onchanges in demand or skills; education and training systems that are responsive tostructural changes in economy and society; and recognition o skills and competencies,and their greater utilization in the workplace. To be eective, policy initiatives in theseareas will also need to be closely linked with economic and social policy agendas.

14 For example, see the OECD’s publications on Jobs or youth (orthcoming), Learning or jobs and Skills beyond

school (orthcoming) (on post-secondary vocational education and training). The ILO will publish major reports on

skills or green jobs (with the European Centre or the Development o Vocational Training (CEDEFOP)) and on theimplementation and impact o qualications rameworks (based on research undertaken with the European Training

Foundation (ETF)) in 2010, and on skills and technology in 2011.



CEDEFOP (European Centre or the Development o Vocational Training). 2007. Building a European VET area, Agora conerence (Thessaloniki).

—. 2010. Skills supply and demand in Europe: Medium-term orecast up to 2020, Feb.(Thessaloniki).

European Commission (EC). 2010. New skills or new jobs: Action now, report by theExpert Group, Feb. (Brussels).

International Labour Oce (ILO). 2000. Conclusions concerning human resourcestraining and development , International Labour Conerence, 88th session, Geneva,2000 (Geneva).

—. 2008a. Conclusions on skills or improved productivity, employment, growth and development , International Labour Conerence, 97th session, Geneva, 2008(Geneva).

—. 2008b. Skills or improved productivity, employment growth and development , ReportV, International Labour Conerence, 97th Session, Geneva, 2008 (Geneva).

—. 2010a (orthcoming). Skills or green jobs (Geneva).

—. 2010b. The implementation and impact o national qualifcations rameworks in

developing countries (Geneva).

Organisation or Economic Co-operation and Development (OECD). 2008. OECDInormation Technology Outlook 2008, Paris. http://www.oecd.org/document/20/

0,3343,en_2649_33757_41892820_1_1_1_1,00.html—. 2009. Learning or jobs: OECD policy review o vocational education and training,

initial report, Oct. (Paris). Available at: http://www.oecd.org/edu/learningorjobs.

—. 2010a. Learning for jobs: OECD policy review of vocational education and training(Paris). Available at: http://www.oecd.org/edu/learningorjobs.

—. 2010b. The high cost o low educational perormance: The long-run economic

impact o improving PISA outcomes (Paris).

—. 2010c. Creating eective teaching and learning environments: First results rom

TALIS (Paris).

Selected references

building skills

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