Report V - Skills for improved productivity, …

1 International Labour Conference, 97th Session, 2008 Report V Skills for improved productivity , employment growth and development Fifth item on the agenda International Labour Office Geneva ISBN 978-92-2-119489-7 ISSN 0074-6681 First edition 2008 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval.

2 ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: Visit our website: Formatted by TTE: reference Confrep\ILC97(2008)\V\ILC97-V[2008-03-01 16-1] Printed in Switzerland Contents Page Executive summary .. v Abbreviations and acronyms .. xv Chapter 1. productivity , employment , Skills and development: The strategic issues .. 1 Understanding 1 productivity , employment and development .. 2 Skills policies for a virtuous circle: Linking productivity , employment and 8 Chapter 2. Connecting Skills development to productivity and employment growth in developing and developed 15 High-income OECD countries.

3 19 Countries of Central and Eastern Europe (CEE) and the Commonwealth of Independent States (CIS).. 30 Developing countries in Asia and the Pacific, Latin America, the Arab States and Africa .. 35 Least developed countries .. 48 Chapter 3. Skills and productivity in the workplace and along value chains .. 55 The sustainable enterprise: Competitiveness, productivity and Skills 56 Enterprise value chains and clusters: Improving productivity and employment outcomes through Skills development .. 63 Training in high-performance workplaces .. 68 Improving Skills and productivity in small enterprises .. 71 How governments and the social partners can support enterprise-level .. training and Skills development .. 75 Chapter 4. Target groups .. 79 Rural communities .. 79 Disadvantaged youth .. 88 Persons with disabilities.

4 94 Migrant 99 iii Skills for improved productivity , employment growth and development iv Chapter 5. Skills policies as drivers of development .. 109 Capabilities, technology and information: A dynamic process .. 109 Coordinating Skills development policies with economic 117 Chapter 6. Skills policies responding to global drivers of change: Technology, trade and climate 127 Building social capabilities to promote technological catching 127 Maximizing the benefits and minimizing the costs of trade and 131 Climate change .. 139 Main policy orientations arising out of the 143 Suggested points for 145 147 Executive summary Introduction The central aim of this Report is to examine how, within a decent work perspective, countries can develop their Skills base so as to increase both the quantity and the productivity of labour employed in the economy.

5 Inadequate education and Skills development keep economies trapped in a vicious circle of low education, low productivity and low income. The Report therefore analyses how strategies to upgrade and enhance the relevance of Skills training and to improve access to Skills for more women and men can instead help countries move to a virtuous circle of higher productivity , employment and incomes growth , and development. Skills development 1 is central to improving productivity . In turn, productivity is an important source of improved living standards and growth . Other critical factors include macroeconomic policies to maximize opportunities for pro-poor employment growth , an enabling environment for sustainable enterprise development, social dialogue and fundamental investments in basic education, health and physical infrastructure.

6 Effective Skills development systems which connect education to technical training, technical training to labour market entry and labour market entry to workplace and lifelong learning can help countries sustain productivity growth and translate that growth into more and better jobs. This Report examines the challenges faced by countries at different levels of development and their policy options. In so doing, it seeks lessons that are relevant for least developed, developing and more industrialized countries in linking Skills development systems not only to the current needs of labour markets, but also to future needs as technologies, markets, the environment and development strategies change. Background At its 295th Session in March 2006, the Governing Body placed the topic of Skills for improved productivity , employment growth and development on the agenda of the 97th Session (2008) of the International Labour Conference.

7 In approaching this multifaceted subject, the present Report seeks to apply the components of effective Skills and employability policies articulated in the conclusions concerning human resources training and development agreed upon at the 88th Session of the Conference in 2000 (ILO, 2000a) and in the Human Resources Development Recommendation, 2004 (No. 195), adopted at the 92nd Session of the Conference in 2004. These tripartite discussions identified policies, programmes and institutions that can help to realize the potential of Skills development to expand opportunities for decent work. 1 In this Report , Skills development is understood in broad terms to mean, as spelt out in the conclusions concerning human resources training and development (ILO, 2000a, para. 5), basic education, initial training and lifelong learning. v Skills for improved productivity , employment growth and development Sequence of recent tripartite discussions and research on Skills development in relation to productivity and employment for decent work 1999 World employment Report 1998 99: Employability in the global economy: How training matters 2000 ILC general discussion: Human resources training and development: Vocational guidance and vocational training 2001 World employment Report 2001: Life at work in the information economy 2002 ILC general discussion on decent work and the informal economy 2003 Governing Body Committee on employment and Social Policy (ESP), Global employment Agenda 2004 Human Resources Development Recommendation, 2004 (No.)

8 195) 2005 ILC general discussion: Youth: Pathways to decent work 2005 World employment Report 2004 2005: employment , productivity and poverty reduction 2006 Governing Body ESP Committee: Implementing the Global employment Agenda: employment strategies in support of decent work: Vision document 2006 Governing Body ESP Committee: Employability by improving knowledge and Skills 2007 Governing Body ESP Committee: Portability of Skills 2007 ILC general discussion on sustainable enterprises The Report also builds on the research findings of several ILO publications that analyse the linkages between Skills , productivity and economic and employment growth . A series of World employment Reports, beginning in 1999, have taken up the issue of Skills development directly or as a component of broader employment policy issues. The World employment Report 2004 05: employment , productivity and poverty reduction concluded that, for the vast majority of the working poor, simply more work, unless it is more productive work, would not lead them out of poverty.

9 It examined the conditions under which employment and productivity could grow in tandem and create a virtuous circle of decent and productive employment opportunities. The knowledge accumulated in these discussions and publications, based on analysis by the Office and guidance from constituents, underpins the preparation of this Report (see sidebar for a chronological summary). The present Report , in turn, contributes to the knowledge base relating to the Skills components of the Global employment Agenda (GEA), which was adopted by the Governing Body in March 2003 and provides an analytical framework for promoting the employment components of the Decent Work Agenda. productivity and employment issues feature prominently in Core Element 6 of the GEA on employability through improved knowledge and Skills and Core Element 2 on promoting technological change for higher productivity and job creation and improved standards of living.

10 The topic of this Report is particularly relevant to the Skills development needs identified in Decent Work Country Programmes (DWCPs). As the principal vehicle for promoting decent work at the country level, DWCPs comprise a set of agreed priorities for tripartite partnership with the Office. Many of the current DWCPs identify Skills development, productivity and employment as national priorities for improving competitiveness, enhancing the employability of young women and men and increasing decent work opportunities for disadvantaged groups. vi Executive summary Objectives of the Report As the background paper for the general discussion on Skills for improved productivity , employment growth and development at the 98th Session of the International Labour Conference, this Report has the following objectives: Provide practical examples of the virtuous circle , drawing lessons from national experience of investing in Skills development, accelerating the growth of investment and productivity and translating those gains into higher income and sustainable job creation.