1. Employment, Trade and Sustainable Development in Central Asia Almaty, 23 June 2016 Skills for Trade Cornelius Gregg STED Technical Specialist Skills for Trade and Economic Diversification STED

2. Background Skills for Trade and Economic Diversification (STED) Programme Sectoral approach to anticipating and responding to skills needs of tradable sectors Piloted Ukraine, Kyrgyzstan, Bangladesh, FYR Macedonia 2010- 2012 Approach formalized 2012 Viet Nam, Jordan, Malawi, Cambodia, Myanmar, Tunisia, Egypt Also, STED component to trade and employment project covering six countries

3. Full Cycle STED STED Sector Reports on Skills Needed for Effective Participation in Trade STED Sector Selection Sector Implementation - Sector stakeholders - ILO support - Other development partners National / Sector Skills Institutions -Stakeholder skills bodies -National capability in skills anticipation Sector Stakeholder Steering/ Advisory Groups Consultation with National Stakeholders Capacity development and transfer of STED to national / sector institutions for skills governance

4. Underpinning Logic - Trade Participation in trade impacts on tradable sectors, with spillovers into wider economy Participation in trade as driver of development Absorption of modern work organization and technologies Productivity as driver of income growth Quality and standards compliance benefit consumers Participation in trade can (contingently) drive Greener operations Formalization of employment Greater female workforce participation Decent jobs

5. Underpinning Logic - Business Matters Firms globally increasingly say they are unable to source the skills they need Especially firms in tradable sectors Even in countries with high levels of unemployment or underemployment among people with high levels of qualification On average, exporting businesses Pay better Are larger Are more likely to offer formal employment Seem to be more likely to invest in current technologies and in implementing modern forms of work organization

6. Underpinning Logic – Trade and Skills Major differences in trade and business outcomes between sectors in different countries with access to similar technologies Accumulation of knowledge and skills is a key factor Skills become more important to economic outcomes as trade openness increases Trade facilitation is necessary, but insufficient With greater trade openness, skills development institutions must become much more responsive Skills development policies should complement trade policies

7. Underpinning Logic – Economic Diversification Many developing countries have low diversity in exports Risky due to volatility in demand from export markets Risky with shifts in competitive advantage Often positions economy in: Sectors characterized by low quality employment Sectors characterized by low impact of exports on employment Developed economies characterized by higher diversity Generating sustainable higher quality jobs requires diversification of exports Skills often one of the principal barriers to export diversification

8. Typical Problem Areas in Tradable Sectors, Based on STED Analyses 1.Efficiency and effectiveness of business operations 2.Compliance with standards 3.Marketing, sales, distribution 4.Innovation, design and product development 5.Supply chain management and logistics 6.Development of value chain

9. Factors Underpinning Changing Demand for Skills Industrial structure Evolution of technology Especially automation and Information Technology Modern work organization Compliance Market demand for quality, flexibility, responsiveness Competitive pressure to improve and differentiate

10. All Levels of Education and Training are Relevant All levels of education and training are relevant 1.Compulsory education – key driver of foundation skills and core work skills 2.TVET (including apprenticeship) – key driver of mid-level skills 3.Universities – key driver of high level skills 4.Continuing education and training – workplace and classroom – central to updating, upgrading and career progression When analysing tradable sectors, we usually see deficiencies important to trade at all these levels Sectoral focus of STED means that recommendations are usually for TVET, universities and CET

11. Systemic Deficiencies in TVET Often Especially Acute Supply of mid-level skills often especially important to strengthening tradable sectors in developing countries Rise in demand for skilled operatives and technicians Often: Weak TVET management Curricula out of date Not responsive to enterprise needs Skills of teachers out of date and weak systems to train the trainers TVET colleges poorly equipped for practical work No systems to identify and anticipate priority TVET skills

12. Common Bottlenecks in Addressing Skills Mismatch Weak voice for employers on shaping education and training provision Lack of coordination between Ministries Lack of coordination between stakeholders at national level and at sector level Problems with quality of education and training provision and quality of qualifications Informality in on-the-job training and apprenticeships Weak human resource management and non-modern operations management Inadequate resources and weak management at education and training institutions Small and Medium Enterprises often have scale constraints on identifying and acting on skills needs Major gaps in supply of training services available to employers Weak core skills among school leavers (and weak core skills content to TVET and Higher Education)

13. Some Tools to Address Skills Bottlenecks at Sector Level Institutions, such as Sector Skills Councils (SSCs), to facilitate collaboration on skills between industry, education and training providers and government Courses targeted on skills gaps in initial or continuing education and training Quality apprenticeships Occupational standards, new curricula Improving Labour Market Information (LMI) Improving Human Resource Management Capacity development for education and training providers Quality assurance in education, training and qualifications Industry-led continuing education and training provision

14. Thank you