Written by Karina Veal, Senior Social Sector Specialist
Even in countries with strongly performing, business-friendly economies, a positive relationship between education and training rates and employment outccomes is not automatic. We can clearly see this in Asia. Our region has experienced substantial economic and jobs growth, and sharp improvements in standards of education. Yet skills shortages, skills gaps, and skills mismatches, persist, particularly in developing countries. What kind of imbalances are we seeing?
Skill shortages exist when employers are unable to recruit from the local labor market for jobs they want to fill. The Maldives provides a case in point. Until very recently there was no training provider offering high level dive master qualifications, resulting in skills shortages in a key area of the country’s lucrative tourism industry. There is also a shortage of local labor across other areas of the industry, with local youth not viewing the jobs as attractive.
The first example from the Maldives can be addressed by a closer and more accurate understanding of exact employment opportunities, and by ensuring technical and vocational education and training (TVET) opportunities follow. The second example however cannot be resolved by tackling opportunity alone. It requires a closer understanding of the cultural aspirations of young people, identifying which jobs are attractive and why, and then focusing training on those specific opportunities.
Skills gaps become apparent when the workforce is not sufficiently skilled to do the job to the standard required. This may be due to insufficient internal training, such as when an employer upgrades equipment and introduces new technology but does not simultaneously upgrade the skills of the existing workforce. Typically, we find skill gaps where the TVET system lags too far behind new employment opportunities. In Nepal, for example, in one district which has traditionally been almost exclusively agricultural, training providers do not offer programs related to manufacturing skills, even though industry is now becoming established in the area. The children of local agricultural laborers are taking manufacturing jobs but their base skills level for the work is very low, and this severely hampers productivity and frustrates further industry investment. Provision of TVET has not kept pace with industry needs, nor adapted and changed to reflect new economic conditions.
Further imbalances occur when there is an oversupply of well-educated labor seeking jobs, but with educational qualifications which are unrelated to job openings. This situation is prevalent in Bhutan, a country which has made remarkable progress in school education, but now faces continuously rising youth unemployment as it struggles to absorb well-educated young people into the local economy.
Whatever the form, persistent and growing skills gaps/mismatches highlight a lack of connection between education/training systems and employers, a lack of core ‘employability’ skills, and, possibly, low quality education.
The issue goes much deeper than simply raising education and training levels. High job vacancy rates in the presence of large-scale youth unemployment confirms this. Doing more of the same and simply investing to expand existing formal TVET systems is not the answer. The challenge is to find a good fit between education and training, the aspirations of youth, and the needs of the labor market.