ILO/MOLSS International Forum on Chinese High Skilled Workers

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ILO/MOLSS International Forum on Chinese High
Skilled Workers

• Innovative skills policy reforms
• Sector-based approaches to skills development
• A SKILLS-AP Discussion Paper by
• Dr J. Sung and Prof D. Ashton
• presented by Trevor Riordan
• Manager, ILO/SKILLS-AP

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Introduction and background to the discussion

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Introduction

• Increasing demand globally for higher levels of
  workforce knowledge and skills, which is driven
  by many factors
• Need for countries to improve productivity to
  compete in the global economy
• Move to more higher value-added products with
  higher knowledge component
• Changing patterns of work organization
• Increasing skills intensification of economies/
  jobs
• Need to develop higher skilled workers for
  particular sectors (China)

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Why knowledge and skills are importantOne
example Contributions of different factors to
economic growth
Source OECD
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Skill Intensity of the Economy Accelerating in
All Sectors
Knowledge and Management Occupations as a Share
of Total Employment, 1971-96 - Canada
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HRD and competitiveness
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Introduction

• Many countries are finding it difficult to reform
  their national skills development system to deal
  with the challenges of the global economy
• Different innovations developed relate closely to
  social, political and historical context in which
  they were developed
• English speaking countries focus on outcomes
• French speaking countries focus on process
• German speaking countries focus on occupations

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Introduction

• Most international approaches to skills
  development focus on integrated national skills
  strategies which develop the skills across the
  total workforce, rather than segments, such as
  high-skilled workers. This will be a feature of
  the presentations of the international resource
  persons
• ILO/SKILLS-AP has brought international
  approaches to skills development from Partner
  Organizations in Australia, Germany, Republic of
  Korea and Singapore to this Forum
• This presentation will focus on a new trend in
  skills development being implemented across many
  advanced countries

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Sector-based approaches to skills development

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Sector-based approaches to skills development

• Background
• Many countries exploring new approaches to skills
• A demand-led approach to training is currently a
  top priority in skills policies in many countries
• This approach enables the coordinating agency to
  determine the skill needs within a sector, the
  kinds and level of training required and how such
  training should be financed and delivered
• This paper examines the lessons learnt from
  countries which have adopted this approach.

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What is a sector approach to training?

• No precise definition nor single model in the six
  countries which have declared sector approach as
  a major workforce development structure
• Australia, Canada, the Netherlands, New Zealand,
  South Africa and the UK (Singapore now included)
• All systems differ in terms of scope
  objectives funding, working relations with
  educ/training and qualification authorities and
  number of sectors
• But all system have two main common features
• Existence of sector-based coordinating bodies
• Involvement of industry/employers in these bodies

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Why use sector-based approaches?

• Governments wanting to focus on the development
  of particular economic sectors which provide the
  best prospects for increasing international
  market share, and developing skills for that
  sector e.g. Singapore in biomedical science
• Strengthen emerging sectors that have potential
  for contributing to future economic growth
• Linking skills development to the real economic
  divisions in the country
• As a mechanism to steer employers towards higher
  value-added forms of productions
• Ensuring more effective training delivery

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Six main features of an effective sector skills
approach

• An effective sector approach
• allows employers to have key role in identifying
  demand for skills and designing the competencies
  required
• In the Netherlands, employers determine skills
  needs and qualifications through Knowledge
  Centres which ensure consistency between work-
  and centre-based training
• In Singapore, government uses major employers as
  a model to identify skills needs of specific
  industries
• In Hong Kong SAR employers set up and finance
  bodies to define and deliver the skills (textile
  construction)
• In UK, some problems emerged with employers
  involvement as they were only consulted after
  skills and qualifications were determined by
  consultants

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Six main features of an effective sector skills
approach

• An effective sector approach
• secures the involvement of workers
• assists in transferability of skills across
  labour market in the Netherlands, unions are
  involved in identifying sector skills needs
• maximizes the use of financial incentives
• Levy schemes in South Africa levy used to
  establish training infrastructure in Netherlands
  only small levy (0.5) used for specific skills
  projects in Hong Kong SAR levy confined to 2
  sectors in Singapore only for low skilled workers

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Six main features of an effective sector skills
approach

• An effective sector approach
• Maximizes the use of financial incentives (cont)
• direct government subsidies UK subsidies
  trainees wages and shares cost of training with
  companies the Netherlands provides tax refund
  (15) of trainees wages
• Uses government funding of sector skills bodies
  to ensure that they consider longer term
  government objectives
• Danger that if sector councils are responsive
  only to employers, longer term objectives may not
  be considered
• In Canada, uses funding to ensure that its views
  on more general long-term policy are considered
  In Singapore, government determines which parts
  of economy will grow

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Six main features of an effective sector skills
approach

• An effective sector approach
• Ensures that some of the funds for public
  training goes through employer-led skills
  councils
• In New Zealand funding is provided to Industry
  Training Councils on per capita basis in the
  Netherlands funds are tied to volume of training
  provided in USA, Workforce Investment Act
  success due to employer involvement In UK and
  Australia some difficulties with councils limited
  control of funding, and less responsive to
  employers needs
• Manages different interests between central
  government and provinces/states/ regions
• Difficult problem for federal systems with
  differences between federal and state/provincial
  needs e.g. Canada and Australia

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Implications for creating a responsive sector
system

• Ensure that the component parts of the system are
  aligned to the same objectives
• Governments may choose the sectors which relate
  most closely to national objectives
• Ensure that sector councils represent the real
  divisions in the economy
• Ensure clarity in functions of sector councils
• Ensure complementarity of research and labour
  market information between coordinating body and
  individual sector council
• Ensure effective performance monitoring

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Concluding thoughts

• While no national systems can be directly
  transferred to others, many useful lessons can be
  learnt from observing other systems
• This study has revealed key principles that drive
  the most effective sector systems
• Sector based approaches are proving to be very
  effective in matching skills needs to national
  economic development
• Many advanced countries using sector based
  approaches to develop their skills workforce and
  respond to challenges of globalization