1. Skills Project A proposal for a new horizontal OECD project 20 May 2010
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5. A work programme with four pillars How do we identify and assess essential skills for strong, sustainable and balanced growth and what are the factors driving the evolution of skill demand? Is the right mix of skills being taught and learned and can employers find workers with the skills they need? Are skills developed in effective, equitable, efficient and sustainable ways? How can governments build strong coalitions with the business sector and social investors and find sustainable approaches to who should pay for what, when, where and how much? Pillar 1 (EDU and ELS) Pillar 2 (ELS) Pillar 3 (EDU) Pillar 4 (EDU and LEED)
Why are we proposing this? As we all know, growth and competitiveness increasingly depend on the capacity of countries to anticipate the evolution of labour demand and to promote skill acquisition and equity of access to learning. But an equally important challenge for countries is to deploy their talent pool effectively by ensuring that the right mix of skills is being taught and learned and employers find workers with the skills they need. And finally, it is important to develop more efficient and sustainable approaches to the financing of learning that also provide a rational basis for who should pay for what, when, where and how much . Transitions to environmentally sustainable economies are an additional driver in the mix of skills that countries require, as are enhanced skill requirements for social and political participation. International migration is also a source of skills but one that needs to be managed appropriately in order to match individual aspirations with the needs of both sending and receiving countries. Last but not least, growth is not just affected positively by the available talent pool, but also negatively by the economic and social costs associated with declining employment prospects for those without sufficient skills.
With an OECD Skills Strategy , we would seek to assist countries to improve economic and social outcomes through better skills and their effective utilisation. More specifically, we would seek to improve: (1) responsiveness (ensuring that education/training providers can adapt efficiently to changing demand); (2) quality and efficiency in learning provision (ensuring that the right skills are acquired at the right time, right place and in the most effective mode); (3) flexibility in provision (allowing people to study/train what they want, when they want and how they want); (4) transferability of skills (such that skills gained are documented in a commonly accepted and understandable form); (5) ease of access (e.g. by reducing barriers to entry such as institutional rigidities, up-front fees and age restrictions, existence of a variety of entry and re-entry pathways); and (6) low costs of early exit (e.g. credit is granted for components of learning, modular provision, credit accumulation and credit transfer systems exist). This work would take a lifecycle perspective in designing policy responses to the challenges of building, maintaining and improving skills in the different transitions over the life course.
How would this work? The OECD Skills Strategy serve three main functions. First, it would trace the development of skills through their utilisation in labour markets, how they feed into better jobs, higher productivity, and ultimately better economic and social outcomes ; second, it would customise the policy insights from comparative analysis and peer learning so that they can have an optimal impact in national policy contexts; and third, it would contribute to building the required strategic partnerships for successful policy implementation. The work would build on a range of existing activities, including, for example: (1) EDU country reviews and the resulting comparative report Learning for Jobs that identifies measures to enhance the responsiveness of vocational education and training systems to labour market needs; (2) the ELS project New Skills for New Jobs that is tracing out how skill demands are changing as well as the importance and consequences of education and skills mismatch; (3) the ELS project Jobs for Youth which draws lessons on how best to equip youth with the skills necessary to make a successful transition from school to work and early career progression; (4) the EDU thematic review of tertiary education; (5) PISA, which examines the effectiveness of school systems to generate foundation skills; (6) the LEED projects on local skill strategies, training and skills development in SMEs and skills for competitiveness ; and (7) the STI skills for innovation project.
We have structured the work under four pillars : The first pillar deals with the question: How do we identify and assess essential skills for strong, sustainable and balanced growth and what are the factors driving the evolution of skill demand? Pillar 2: Is the right mix of skills being taught and learned and can employers find workers with the skills they need? Pillar 3: Are skills developed in effective, equitable, efficient and sustainable ways? Pillar 4: How can governments build strong coalitions with the business sector and social investors and find sustainable approaches to who should pay for what, when, where and how much? Let me briefly lead you through these pillars.
One of the reasons why skill shortages often do not translate efficiently into learning provision is the lack of a common language through which skills are identified, articulated, recognised and communicated from those who use them to those who produce them . This pillar would seek to assist countries with identifying, defining and assessing essential skills, giving adequate recognition to generic skills as well as domain-specific and firm-specific skills. Our analysis would examine both changing skill demands within existing jobs – often driven by technology – as well as changing aggregate skill demands resulting from shifts in occupational composition. Another important objective of this first pillar would be the development of better evidence on the economic and social outcomes of skills at both individual and aggregate levels.
A better understanding of the drivers of changes in skill demand within firms, occupations and countries will be crucial for countries to shift the focus of learning provision from supplying skills for today’s labour market to shaping future jobs . Labour markets are becoming increasingly complex and dynamic, are characterised by growing convergence of occupational sectors and rising job and occupational mobility. These forces combined with depreciation of domain-specific knowledge require individuals to upgrade their skills more regularly leading to changing patterns of work and learning. Skill mismatches occur at both the individual level – when a worker would be more productive in another position – as well as at the aggregate level – when there is a general surplus or shortage of specific skills . It is important in this context that policy makers are seeking to meet skills shortages, and not just labour shortages created by unattractive and low quality employment. There are also ‘age training gaps’ and ‘gender training gaps’ with older workers and women often being less involved in training that their younger and male counterparts, respectively. Why do these gaps exist and how can be best addressed? What are the key institutional factors that can promote participation in training of older workers (e.g. wage-setting mechanisms; retirement policies)? What policy and institutions could reduce the gender training gap (e.g. family-friendly policies that encourage more continuity in working careers for women)? Finally, how to manage the global search for talent while also dealing with brain drain and brain gains issues? How to strengthen education outcomes of children of immigrants in receiving countries? How to promote return migration and better use of competencies in the home country?
Third, with a rapidly rising demand for skills, countries can no longer simply rely on education and training systems that efficiently sort individuals, but need to improve their skill base throughout the population and to capitalise on the full potential of all individuals. This requires countries to ensure that skills are developed in effective, efficient and fair ways through lifelong and lifewide learning , and to ensure responsiveness, quality and flexibility in provision. The OECD could play a pathfinder role for countries to: (1) identify effective strategies for new ways of learning and skill provision; (2) improve the knowledge base about skill development; and (3) support systems of continuous innovation and feedback to develop knowledge of what policies work in which circumstances. This would also involve identifying the policy levers, incentive systems and support structures that lead to enhancing skills through the formal educational system, in the work-place or through incentives addressed at the general population. It would also include sustaining workplace training and meeting the increased demand for full-time vocational education and training. There is also significant potential for peer-learning among countries with regard to how individuals learn differently, and differently at different stages of their lives , and what effective policies are to meet those individual needs of people, wherever they learn, to look into new ways to take learning to the learner, examine new forms of educational provision and new relationships between learners, providers, funders and social innovators. Similarly, peer-learning offers important policy insights for establishing the appropriate mix of academic and vocational programmes in ways that reflect student preferences and employers’ needs, with vocational training providing immediate employability, but also basic transferable skills to support occupational mobility.
Fourth, governments need to build new relationships, networks and coalitions between learners, providers, governments, businesses, social investors and innovators that bring together the legitimacy, innovation, and resources that are needed to make lifelong learning a reality for all. Much of this networking and engagement takes place at the level of local labour markets, and it is therefore at this level that relevant stakeholders interact and collaborate to gear education and training to local labour market needs, attract and retain talent, and ensure that disadvantaged groups are integrated into learning systems. The rising demand for skills also implies that all stakeholders must be prepared to mobilise more time and money for learning . At the same time, there is an urgent need to improve the efficiency of educational provision. Investment in learning needs to be cost and tax-efficient for individuals and their employers. For those out of work, funding needs to be accessible to support and incentivize learning. Governments need to use regulation and taxation to encourage financial institutions to develop new financial instruments that allow learners to access opportunities when they need them most, including through lowering cost, reducing risk and smoothing repayments. For learning beyond universal education, education and training systems need to find ways to share the costs among government, employers and students based on the respective benefits obtained.
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