UKFIET 2015: Can stronger skills markets contribute to sustainable and decent work for all?

Can stronger skills markets contribute to sustainable and decent work for all?

Can stronger skills markets contribute to sustainable and decent work for all?

Symposium rationale

For several decades, skills development has languished as ‘the Cinderella of the development community’. But, with increasing pressure on secondary systems, global youth unemployment rates at unprecedented levels, and youth marginalisation linked to social unrest, the development spot light is turning on skills. The SDGs bring renewed commitments to lifelong learning, and decent work for all. DFID has tendered three new programmes of support to skills sectors. Development Partners ask how we can Make Skills Markets Work for the Poor. Cinderella is being invited to 2015’s development ball.

This symposium builds on UKFIET’s history of keeping skills on the development agenda. It will take up debates about how skills development contributes to inclusive economic growth, and sustainable, decent work. Through three presentations and structured discussion, the symposium will consider how what we already know about strengthening skills market systems might best inform support to development programmes.

Chair: Andy Brock andy.brock@camb-ed.com

Symposium papers

Paper Authors

Paper 1 – Sector Skills Councils: Can they enhance employer engagement in skills development systems?

Paper 2 – The role of theories of change in bringing about beneficial and sustainable change in the labour market

Paper 3 – Skills and Capacity: What does learning need to look like today to prepare the workforce of 2030?

Robin Todd, Cambridge Education robin.todd@camb-ed.com

Michael Woodgate, Independent Consultant

Ron Tuck, Cambridge Education ron.tuck@camb-ed.com

Rosie Lugg, Cambridge Education rosie.lugg@camb-ed.com

Muriel Dunbar, Cambridge Education muriel.dunbar@camb-ed.com

Can stronger skills markets contribute to sustainable and decent work for all?

1 Sector Skills Councils: Can they enhance employer engagement in skills development systems?

1.1 Abstract

Sector Skills Councils (SSCs) are being advocated as mechanisms through which employers in developing economies can become actively engaged in the reform of skills supply systems. This paper reviews evidence of SSC effectiveness in different economies to question what sustainable employer engagement might look like. The paper looks critically at evidence from the UK to assess the extent to which SSCs have genuinely facilitated employer engagement in skills supply. Using the UK as a case study it identifies some critical success factors behind effective employer engagement and examines i.) the extent to which these factors can be applied within a developing country context and ii.) in what circumstances SSCs may be an effective means of facilitating employer engagement.

1.2 Introduction

One of the sub-themes of the current UKFIET Conference is how to prepare for decent and sustainable work. The Sustainable Development Goals (SDGs), it is claimed, have returned the importance of work to the centre stage of development discourse. The SDGs emphasize that work should contribute to increased income, productivity and competitiveness as well as addressing environmental and social issues.

What role does skills development have to play in ensuring that decent and sustainable work can achieve these aims? Governments across the world, from the United Kingdom to Uganda, are producing policy documents emphasizing the importance of skills development for the life chances of individuals, and for the productivity and competitiveness of companies and the economy. These documents talk about transformational change, a ‘paradigm shift’ (Government of Uganda, 2012) from a supply-led to demandled approach which will ‘put employers centre-stage’ (UK Conservative Party, 2008).

What do these statements mean in practice? Does greater collaboration between employers and training providers lead to systems which “create employable skills and competencies relevant in the labour market instead of educational certificates” (Government of Uganda, 2012:4)?

It is one thing for policy makers to talk about greater employer engagement in skills development systems, it is quite another to actually make it happen. Over the past decade many countries have established Sector Skills Councils (SSCs) as one means of enhancing employer engagement. The general assumption behind many of these policies is that greater employer engagement will mean that suppliers of training are able to deliver courses and qualifications which meet employers’ needs. This in turn will mean that skills gaps are eliminated and firm productivity increases, contributing towards economic growth. But do these assumptions hold up to scrutiny? Will increasing the ‘responsiveness’ of the skill supply system actually increase firm productivity?

This paper looks critically at evidence from the UK to assess the extent to which SSCs have genuinely facilitated employer engagement in skills development. Using the UK as a case study we identify some critical success factors behind effective employer engagement and examines: i.) the extent to which these factors can be applied within a developing country context and ii.) in what circumstances SSCs may be an effective means of facilitating employer engagement.

Can stronger skills markets contribute to sustainable and decent work for all?

1.3 Skills supply, demand & utilisation- a conceptual model for increasing firm productivity

Our consideration of these issues starts from the simple premise that what employers want is for people to do their jobs well. Many factors will affect the productivity and value of an industrial sector, and a good number of these are outside of an individual firm’s control. However one factor which is almost entirely within each firm’s control is the people who work in it and the way they are recruited, trained and managed.

Effectiveness of recruitment depends on a number of factors including: availability of potential recruits; awareness of opportunities; ability and suitability of potential recruits; attractiveness of workplaces; effectiveness of recruitment processes; competence of the people doing the recruitment; and effective trial period management processes.

Effectiveness of training requires an employer to identify, for their employees, what needs to be learnt, why it needs to be learnt, how it is going to be learnt and who is going to teach it. The answers as to ‘what’ and ‘why’ will have a considerable bearing on ‘how’ and ‘who’ and to whether the employer considers on-thejob training, informal learning or qualification bearing formal training by a third party provider as providing the most effective means of addressing training needs.1

From our experience there are four main reasons why employers train their staff:

a. They are required to pay for training or take on trainees because of regulation and legislation i.e. for compliance reasons.

b. They feel that they ought to because it’s the sort of thing a ‘good’ employer does and it demonstrates that they care about, and invest in, their people i.e. for corporate social responsibility reasons.

c. They are offered ‘free’ training funded by government or some other third party source i.e. for affordability and opportunistic reasons.

d. They recognize that there is a genuine, bottom-line business benefit to them of investing in the skills and training of their employees i.e. for business reasons.

Encouraging employers to invest for the fourth reason i.e. that it is in their best business interests to do so, is by far the most effective means of creating sustainable demand for training linked to business performance. This is not to say that the other three reasons are not legitimate- certainly there will always be a role for regulation and legislation to set minimum operational and safety standards which will in turn shape the market for skills and training- but they are all, in their own way, tangential to the core driver of productivity and bottom-line profit which is at the heart of employers’ business needs.

In many ways encouraging investment for genuine business reasons is the most difficult of the four to achieve as it involves a number of stages, each of which needs to talk to a real need which is understood and appreciated by an individual firm. First it involves defining a business need and then articulating how improved skills will contribute to addressing these needs. Then it involves developing a plan to provide training and support so that these needs will be effectively addressed. Finally this plan needs to be implemented and assessed in order to ascertain whether the need has been successfully addressed. The most appropriate solution for each business need may very often not be aligned with government policy targets for the number of people trained with full qualifications.

1 In the past it would have been fair to say that these drivers of productivity and bottom-line profit only applied to private sector firms. However with the growth and widespread acceptance of ‘New Public Management’ techniques worldwide over the past two decades they can equally be seen as applying to many public sector organisations, albeit recast slightly as delivering ‘value for money’ and meeting ‘minimum performance standards and targets’.

Can stronger skills markets contribute to sustainable and decent work for all?

The third element of effective performance, in addition to recruitment and training, is management. Skills development is a continuous process. It does not begin and end with a formal training course. Ongoing practice, mentoring and critical and supportive line management are all essential in supporting people to do their job better. In order to be effective, line management requires individuals to carry out appropriate (not necessarily formal) performance management processes and discharge their management responsibilities. In large organisations this process will be formalized while in smaller and micro businesses it can be carried out informally so long as the key elements are in place- effective management, a shared understanding of performance requirements and an appropriate approach to leading and developing people.2

When developing skills policy many Governments have focused on the second of these three elementstraining- while paying little or no attention to recruitment or management practices. In part this is understandable as Governments will focus where they have most leverage and influence, in this case on the training or ‘skills supply’ system.

Just as, at a firm level, productivity relies on the three elements of recruitment, training and management, so at a policy level, effective skills development relies on i.) skills supply, ii.) skills demand and iii.) skills utilization.

Skills supply refers to the training courses and qualifications which are offered and delivered by public and private training institutions, on-the-job and by firms themselves.

Skills demand refers to the level, number and type of skills required by employers across industry sectors.

Skills utilization refers to how employers utilize the skills of their employees within the workplace to drive their business goals and organizational performance.

The temptation, from a policy perspective, is to look predominantly at skills supply. The hypothesis behind much of the rhetoric of ‘transformational change’ and ‘employer-centered’ skills policies is that if training supply is able to understand and meet the needs of employers then this will lead the training market to provide skills which are needed by the labour market and thus will inevitably lead to improvements in productivity and advances in ‘decent work’.3

There is undeniably some merit in this approach as, in many countries, graduates of technical and vocational training (TVET) institutions are often woefully unprepared for the realities of the labour market and employment opportunities actually available to them.

However, focusing solely on skills supply overlooks the equally important issues of skills demand and skills utilisation. As Keep (2015:2) observes “traditional English skills policies have only ever really addressed the supply side and have ignored problems bound up with deficiencies in the underlying levels of demand for skill within the economy, and also the issue of how effectively skills are deployed within the workplace.” England is far from alone in this regard.

2 Problems occur when line managers are unable or unwilling to get involved in what they see as ‘people management’. Managing people may involve having challenging conversations with them- a job which some managers may see as being best left to HR. If people aren’t doing their job very well then the simplistic solution is to offer then some more training.

3 Sometimes education and training policy is pulled in two directions between economic productivity goals and social employment creation goals- these are not always mutually reinforcing.

Can stronger skills markets contribute to sustainable and decent work for all?

Widening policy-makers’ perspective to encompass skills demand and skills utilisation starts to move the debate on skills development beyond a simplistic focus on ‘employer-led’ supply systems to questions about the fundamental purpose of skills in the first place and the role of skills in improving workplace productivity.

The Sustainable Development Goals (SDGs) recognize the central importance of work and jobs to international development. Stiglitz & Greenwald (2014:15) go further than this by stressing that learning, and the productivity gains generated by effective learning, are “the most important determinant of increases in standards of living”.

Importantly Stiglitz & Greenwald note that there are high correlations in productivity increases across industries, firm and functions. At the same time there are large and persistent differences in productivity across countries and firms. These gaps between best, average and worst performing firms provide a significant opportunity for productivity increases and economic growth, particularly in developing countries:

“much of the difference in per capita income between [developing] countries and the more advanced is attributable to differences in knowledge…in reality most firms operate well below their production possibilities curve. There are large gaps between “best practices” and “average practices”. Countries differ in the size of these gaps…the most successful economies are those that succeeded in not only moving out their production possibilities curve more rapidly, but also ensuring that the gap between ‘average’ and ‘best’ practices is small.” (Ibid: pp.17-18)

There is a much larger gap between ‘best’ and ‘average’ performing firms in developing economies than in more developed economies (Stiglitz & Greenwald 2014, Li & Rama 2013). Bloom et al. (2010) draw a similar conclusion regarding management practices and productivity from a randomized experiment involving Indian textile firms. They found that many of these firms were badly managed and that this had a substantial impact on productivity. Crucially, in line with the observations of Stiglitz & Greenwald, Bloom et al. (2010:620) noted that: “the lower level of average management practices in developing countries occurs because of a persistent, thick tail of badly managed firms. In the United States badly managed firms appear to improve or exit while in developing countries they do not.” In the Indian textile example, the introduction of improved management practices raised productivity by 17% in the first year when compared with the control group (Bloom et al. 2013). These findings are not limited to large and medium sized formal enterprises. A number of studies have shown significant variations in performance and productivity among micro-enterprises operating within the informal sector in Sub-Saharan Africa, Central and South America (Grimm et al. 2011; Bargain & Kwenda 2011).

Clearly there are a number of external factors which constrain firm productivity in developing countries e.g. infrastructure, regulation, trade policies etc. but the evidence presented above suggests that there is much more that could be done, both by firms themselves and policy makers, to improve productivity and reduce the size and breadth of the ‘persistent, thick tail’ of poorly managed and less productive firms.

Critically, the nature of ‘skills supply’ is both defined and constrained by the nature of ‘skills demand’ from employers. If employers either don’t realize that their processes and procedures are inefficient or don’t see the need to change these processes then they are not going to want or be able to articulate the skills required within their workforce to enhance productivity. And if their management practices are substandard then they are not going to be able to use the existing skills of their employees to drive productivity gains.

Can stronger skills markets contribute to sustainable and decent work for all?

In order to frame this dynamic relationship between skills demand and supply, we present an overarching conceptual model consisting of a four by four matrix. This is set out in the diagram below:

Demand for skills is not static and is driven by employers’ needs and preferences. The level and nature of skills required by employers varies between sector and from firm to firm depending on the value which each sector (and individual employer within that sector) places on skills and training. If within a certain sector there is high demand from employers for skills and if the labour and training markets are able to provide the quantity and quality of labour required to meet these needs the sector can be described as being in a state of ‘high skill equilibrium’.

This is not the case for all employers and sectors. In some sectors, particularly those in which informal enterprises predominate, there is often reliance on plentiful, low skilled labour with few opportunities for upskilling, low productivity levels and a general under-investment in skills and training. If the market is able to provide sufficient labour to meet employer demand in these areas which have lower skills requirements then these sub-sectors can be described as being in a state of ‘low skill equilibrium’.

Where employers within a sector report difficulty in recruiting an adequate number of people with the necessary skills to meet their human resources needs then this can be described as a ‘skills shortage’.

The final scenario is a situation where employers within a certain sector are not able to effectively utilise the available skills of their employees. This can be described as a ‘skills surplus’ situation and arises where a country’s labour market is not sufficiently diversified and developed to absorb the supply of skilled employees entering the market, where employers are wedded to outdated production practices which do

Figure 1: Relationship between Skills Demand and Supply

Source: Froy (2014) adapted by Mott MacDonald (2015)

Can stronger skills markets contribute to sustainable and decent work for all?

not effectively utilise the available human capital or where low economic growth has reduced the pool of available jobs within the labour market as a whole, forcing citizens into ‘underemployment’.

Focusing solely on skills supply and ensuring that this supply meets employer demand is not going to lead to a high skills equilibrium situation if employers are not demanding high levels of skills. If employer demand for skills is low then it is not possible to get beyond the ‘low skills equilibrium’ scenario no matter how responsive the supply side may be.

Of course not all sectors and job roles require employees with high level skills and we are not suggesting that this is the case. However the existence of significant productivity and management gaps between countries and firms working in the same sector demonstrates that there are likely to be many employers who could benefit from adopting the high performance working practices of their peers. Such practices are likely to include better skills development, recruitment and management of staff and more effective utilisation of existing skills within the workplace.

The UK Commission for Employment and Skills (UKCES 2013a) recognises that raising the supply of skills does not automatically result in increased workplace productivity. UKCES has instead identified a range of High Performance Working (HPW) practices which, if applied consistently, have been found to improve productivity by enabling employers to use and apply employees’ existing skills more effectively.

Employee Involvement Skills Acquisition

Task discretion

Task variety

Problem solving teams

Descriptions

Project teams

Team briefings

Suggestion scheme

Staff survey

Source: UKCES (2013a:2)

Induction

Work shadowing

Off-the-job training

On-the-job training

Training Plan

Annual budget

Annual performance review

Evaluation of training

Motivational Practices

Organisational Performance-related pay

Individual performance-related pay

Formal employee consultation procedures

Formal discipline and dismissal procedures

Flexible benefits

Flexible working

Equal opportunity policy

These findings raise interesting questions for policy makers as to the role which they can play in assisting firms and sectors to reduce the productivity gap between ‘best’ and ‘average’ firms. Rather than focusing predominantly on ensuring that skills supply meets existing employer demand for skills whilst simultaneously seeking to increase the stock of people in the labour market with formal qualifications (and these two objectives are not necessarily mutually reinforcing) a more nuanced and productivity focused skills development strategy would examine how government can play a role in increasing employer demand for skills linked to business needs whilst encouraging more effective skills utilization and productivity through the promotion of high performance working practices.

Do Sector Skills Councils represent a possible vehicle for taking such a strategy forward?

1.4

What are the sector skills councils?

Over the past fifteen years Sector Skills Councils (SSCs) have grown in popularity worldwide as a means of shaping employer engagement in skills development systems. While the list of functions and organizational structures of SSCs varies quite considerably from country to country their unifying function

Table 1: Groupings of High Performance Working practices

Can stronger skills markets contribute to sustainable and decent work for all?

is perhaps best summarized by the ILO (2012) as “providing the link between the training system and the labour market.”

A study by the European Training Foundation (Lempinen 2013) found that 19 European countries had established skills and training bodies which focused on a specific sector of the labour market (although there were considerable differences in the structures of these bodies and the extent to which they are genuinely employer-led). Outside of Europe, notable examples of SSCs include India (where 31 SSCs have been established in the past five years), Australia (where a network of 11 Industry Skills Councils was established in 2004) and South Africa (where the Government established 21 Sector Education and Training Authorities (SETAs) in 2005).

The list of function which individual SSCs perform can be relatively broad, encompassing tasks such as: labour market analysis impacting quantitative and qualitative skills needs; forecasting skills needs; matching training provision to labour market needs; preparation of occupational or qualification standards; policy advice on lifelong learning or VET; fostering cooperation between education providers and employers; provision of training for the workforce; and funding of training (Lempinen 2013:9).

The three common themes running through this list of functions are:

i. Gathering accurate and timely Labour Market Information in order to understand the quantitative and qualitative skills needs of the sector;

ii. Agreeing the nature and content of the standards and qualifications required within the sector;

iii. Working with training providers to articulate the skills needs of employers within the sector so that supply is aligned with employer demand.

Relating these functions to the earlier discussion on skills supply, skills demand and skills utilisation it can be argued that, from this list, the main focus of SSCs is related to skills supply. In summary the role of an SSC is to articulate and quantify existing employer demand for skills (rather than explicitly shaping or driving up this demand), set standards which reflect this demand and then work with the supply side to ensure that this demand is met.

1.5 Sector skills councils in the UK – A Brief History

The UK, in 2002, was one of the first countries in the world to introduce Sector Skills Councils. The UK system of SSCs is acknowledged as being strongly employer-led, when compared with other international examples, and is considered to be a “good example of a system that performs well” (Lempinen 2013:18).

A number of countries have considered the UK SSC model as something worth emulating and adopting.

The SSC model in the UK is, in many ways, a Government response to the realities of the country’s labour market, a labour market characterized by a “voluntarist, laissez faire tradition where the state has done relatively little to create a climate in which effective business interest associations that are capable of acting in concertation with government might develop” (Payne 2007:10). This voluntarist, decentralized labour market contrasts starkly with that of many Continental European countries which have a stronger tradition of partnerships between different actors underpinned by legislation and that of countries in South East Asia which often have a stronger state-led strategic and pro-active approach to skills development (Powell et al. 2010).

While there are sectors in the UK where employers have a strong and long track record of collaborating together to develop and fund skills training to overcome market failures (construction, engineering

Can stronger skills markets contribute to sustainable and decent work for all?

construction and film are all notable examples, the three sectors in the UK which operate a training levy system through their respective Industry Training Board- CITB, ECITB and FITB respectively) these are the exception rather than the rule. As a result 25 SSCs were created from 2002 onwards in an attempt to provide a stronger network of skills bodies with employer credibility. These 25 SSCs were successors to the hundreds of Non-Statutory Training Organisations (NSTOs), Industry Training Organisations (ITOs) and National Training Organisations (NTOs) which had occupied the UK’s skills landscape in the 1980s and 1990s.

By 2003 the footprint of the 25 SSCs covered 90% of the UK’s workforce. Each SSC had 4 core strategic goals:

i. To reduce skills gaps and shortages

ii. To improve productivity, business and public sector performance

iii. To increase the opportunities to develop the productivity and skills of everyone in their sector

iv. To improve learning supply through the development of apprenticeships, higher education and national occupational standards.

All SSCs had to draw up and sign Sector Skills Agreements (SSAs) with their sector as a basis for collaborative action between employers and training providers. Importantly these strategic goals explicitly included the remit of increasing productivity and public sector performance and thus were not solely concerned with skills supply.

In 2015, 13 years after their formation, what is the verdict on SSC performance in the UK? At a headline level there have been some quite significant shifts in the skills landscape. The 25 SSCs which were created over a decade ago under the auspices of the Sector Skills Development Agency (SSDA) have today morphed into 16 SSCs and 5 Sector Skills Bodies which are described by their umbrella body, the Federation for Industry Sector Skills & Standards (FISSS) as ‘employer-led partnerships’.

Along the way there have been some notable successes. Skills councils in sectors such as construction, engineering & manufacturing, interactive media and science industries have achieved considerable successes in bringing about cost savings, reducing wastage, improving the quality and relevance of provision, generating economic benefits and providing career pathways and progression routes within sectors (Baker Tilly 2010).

Reading recent UK Government publications and strategies it is clear that the past few years has seen a distinct policy shift away from a skills system founded on SSCs as a core strategy for enabling employer engagement to one which is virtually silent on SSCs.

This is not to say that SSCs are no longer important- the individual work which the leading SSCs carry out in engaging employers in skills and training is critical- it is just that they are no longer seen as THE definitive means of employer engagement. Instead the narrative has shifted much more towards that of place and locality rather than sector with Local Enterprise Partnerships (LEPs) seen as a key vehicle for developing greater employer participation and partnerships (BIS 2014). Where SSCs are mentioned they are mentioned alongside trade associations, professional bodies, Apprenticeships Training Agencies and business advisors as one of a number of possible means of enhancing employer engagement (HMG 2014). The shift in the provision of government funding for SSCs in 2011 from a guaranteed central allocation to a pooled competitive fund for specific initiatives is reflective of this change in emphasis.

Can stronger skills markets contribute to sustainable and decent work for all?

In part this shift is due to the fact that the UK SSC model has not proved to be universally successful. While some SSCs have thrived others have declined, withered and, in some cases died. Comparing the original roll call of SSCs with the situation in 2015 it is noticeable that the freight logistics, retail, apparel, footwear and textiles industries no longer have SSC representation while the retail motor industry, building services engineering, passenger transport and financial services industry are all represented by a different body then was the case in 2004.

Why have some SSCs succeeded whilst others have failed? Looking at evidence from the UK experience we are able to identify four inter-related issues.

i. Origins of the SSC

The 25 SSCs established in 2002 and 2003 had very different historical origins. Some, such as Construction Skills, grew out of existing industry bodies with a long history of stakeholder collaboration on skills development (CITB, which was founded in 1964, in the case of Construction Skills). Others, such as Skillsmart Retail, were effectively new organisations created to ensure that the network of SSCs covered a significant majority of the UK’s working population. These ‘new’ organisations were often formed in sectors where there had been a general lack of employer collaboration on skills development whilst in other cases they found themselves ‘competing’ for employer recognition with existing trade associations and similar bodies. It is unsurprising that those SSCs which grew out of institutions with a track record of industry collaboration and which had greater recognition with employers have generally been more successful in achieving their objectives.

ii. Composition and make-up of the industry sector

Some sectors of the UK economy have a longer and deeper history of collaboration than others. In part this explains why some SSCs grew out of existing organisations and associations whilst others were created from scratch. The engineering, manufacturing and science based industries in particular have a relatively strong history of employer collaboration. These are all sectors with a mix of larger employers and small & medium sized enterprise (SMEs) where technological advancement and innovation play an important role in enabling companies to increase productivity levels and compete internationally.4 The case for continuing investment in the effective utilization of employees’ skills to drive productivity is selfevident to many employers. This is not the case for all sectors.

‘Employer engagement’ is seen as a core requirement for an effective SSC. If an SSC is not able to adequately and articulate the views of employers in its sector then the ‘Theory of Change’ regarding its ability to carry out its four strategic goals is severely compromised. Evidence suggests that employer engagement is particularly challenging within those sectors with a high proportion of SMEs and microbusinesses. Not only is it difficult for SSCs to reach out to the large number of small businesses it is also the case that many of these businesses are so busy with their core business that they do not have the time or inclination to engage in discussions about workplace skills. As Payne (2007:32) notes “the challenge of engaging SMEs and micro-businesses is one that is keenly felt across all SSC. On quantitative measures, SSCs with a high proportion of such establishments in their footprint effectively start four furlongs behind the rest of the field in ‘the employer engagement stakes’ and face a particularly difficult challenge in terms of ensuring that the views they express are fully representative of their sector.”

4 Contrary to popular belief, the UK still has a vibrant manufacturing sector even if the proportion of the workforce employed in the sector has declined significantly over the past two decades. The focus of the manufacturing industry in the UK, reflecting global economic trends, has shifted much more towards high-end, advanced manufacturing with an emphasis on quality (EEF 2014).

Can stronger skills markets contribute to sustainable and decent work for all?

SSCs have also reported significant difficulties in trying to engage with employers in sectors which have issues with the quality of leadership and management skills. People management is an essential element in the effective utilization of skills in the workplace. In those sectors which have specific deficiencies in the quality of leadership and management (logistics and the retail motor industry are examples of two such sectors in the UK) SSCs have found that employers are just not willing to listen to what they have to say about skills development and productivity. As a staff member of Automotive Skills observed (quoted in Payne 2007:21) “the very issue of communicating with people in the broadest sense is that there has to be a good reason why the other party to the conversation-the employer…wants to hear what you have to say and that, frankly, is often the problem.”

In those sectors which display elements of the ‘low skills equilibrium’ scenario described earlier in this paper employers showed a lack of willingness to engage with their SSC as the business imperative for higher skills levels was not evident to them. This was the scenario articulated by Skillfast UK, which covered the apparel, footwear and textile industry, who noted that “companies [were] sticking within fairly narrow parameters in terms of product strategy which means sticking with fairly basic skills.” (Payne 2007:22).

The message from this analysis is clear- that the composition and outlook of the sector plays a key role in creating an environment in which SSCs are able to succeed in taking forward their four strategic goals. Sectors which are dominated by large numbers of small and micro-businesses which lack a common culture of collaborating and which do not have a strong track record of effective skills utilization are not likely to provide a solid platform for a successful SSC. Ironically these are also the sectors which are actually in greatest need of external intervention to concert and mobilise employer interest in skills and productivity issues.

iii. SSC leadership and nature of engagement with employers

The two factors discussed so far are likely to be mutually reinforcing i.e. those SSCs which grew out of existing industry bodies tend to be in sectors with a stronger history of employer collaboration on skills development. These factors combine to give some SSCs a stronger foundation than others. However such foundations need to be built on if an SSC is to succeed. Two further success factors appear to be i.) strong leadership and ii.) an ability and willingness to represent the views of a broad range of employers and focus the SSC on addressing the real needs of these employers.

These two factors are linked in that the most successful SSCs have a Chief Executive, Chairperson and Board who understand their sector, have considerable practical experience within the sector and a high level of credibility with employers. Often, with successful SSCs, the employer representatives on their Boards operate at the highest level of their businesses, i.e. Chief Executive and equivalent from some of the most respected employers in the industry. Those SSCs which have performed less well often had representation from less prominent firms or representation was generally at HR Manager and Director level.

Successful SSCs are well known within their sector and have a broad reach and recognition with employers of all sizes. There is a significant difference in levels of employer engagement between those SSCs which have gone on to succeed and those which have been less successful or ceased operations entirely. An SSDA employer survey in 2006 found that employer recognition of SSCs varied from 77% to 4% by sector. Of those employers who were aware of their SSC only 9% had any dealings with them in the past month (with contact rates being higher amongst large firms) while, astonishingly, 80% of all employer engagements were with just 3 of the 25 SSCs (Payne 2007).

Can stronger skills markets contribute to sustainable and decent work for all?

These generally low levels of employer engagement, with deep penetration limited to just a handful of sectors, has persisted in recent years. The UKCES 2012 Employers Perspectives Survey shows that just 2% of employers have used SSCs as a source of advice, information and practical help. This figure is lower than the number of employers who sought advice from training providers, professional bodies, colleges, Local Authorities, consultancies, other employers, universities, Local Employment Partnerships (LEPs) and Chambers of Commerce.5

In part the significant difference in levels of engagement across industry sectors is a result of issues with the SSCs’ origins and the characteristics of each sector but it is also connected to the nature of the dialogue which each SSC has instigated with employers. Those SSCs with the deepest reach within their sector are committed to working with employers to address issues which employers have said are of greatest concern to them. Examples of such practices include Construction Skills’ work to promote apprenticeships as a means of overcoming underinvestment in training within an industry which is heavily reliant on sub-contracting and SEMTA’s work to map out career pathways and promote STEM subjects at school in order to encourage entry and progression into engineering and manufacturing careers.6

By contrast those SSCs which have failed have generally failed to gain credibility or traction with employers and have been seen as promoting government skills policies or trying to justify their own reason for existence rather than dealing with issues of greatest concern to the sector. A good example of an SSC which falls into this category is Skills for Logistics which went into administration in January 2015. The logistics sector in the UK does not have a strong history of collaborative action on skills development and was always going to be a challenge for its SSC. However Skills for Logistics did not help itself as: “in a bid to raise the profile of the sector it started talking about “logistics craft” and set about creating “solutions” for the supposed shortage of these skills. These solutions the Interactive Stairway, the Logistics Guild, the Foundation Degree constituted little more than answers desperately searching for questions. Each one had thousands spent on it with no discernible return. The irony is that the logistics sector does have skills issues to address, just not the ones Skills for Logistics chose to focus on.” (Woodgate 2015)

iv. Access to sustainable financing

Funding- the availability of sufficient levels of resource to achieve their four strategic goals- is a critical driver of SSC behaviour and performance. Upon their formation back in 2002 SSCs were provided with Government start-up funding with the intention that they would become self-financing on the basis of industry contributions within a few years. Four years after their formation an evaluation by the SSDA found that less than 7% of SSCs overall income came from employers (Payne 2007). SSCs went through a Government initiated re-licensing process in 2008 which led to some consolidation but their central government funding allocation (through the newly established UKCES) was maintained. This guaranteed

5 The one area where SSCs have appeared to achieve a relatively good breadth of awareness amongst employers is with National Occupational Standards (NOS). NOS represent benchmarks of good practice within specific occupations, specifying the performance standards, knowledge and understanding required by employees in the workplace. NOS are developed by SSCs and other industry standard setting bodies (for those sectors not covered by an SSC). In the 2012 UKCES survey 40% of employers had heard of NOS with 5% of employers having ‘good’ knowledge and 23% having ‘some’ knowledge. 73% of employers with good knowledge and 45% of those with some knowledge had actually used NOS- adding up to 9% of all employers surveyed (UKCES 2012). Usage by sector ranged from 26% in Non-Market Services to 5% in Manufacturing.

6 Even within the most ‘engaged’ sectors there is a concern that employer engagement is limited to those firms and individuals within firms who ‘get skills’ i.e. that the leadership and management of SSCs represents those employers which already practice high performance working practices and invest in skills development and utilisation (Payne 2007). There is inevitably a danger of this in that employer engagement in SSCs is self-selecting so will attract those with an interest in these practices. This is not necessarily an issue so long as it is recognised by SSC management and these employers make a concerted attempt to reach out to others in order to promote and encourage the spread of high performance working practices across their sector.

central funding ceased in 2011. From 2011 onwards SSCs have had to compete for government fundingboth with other SSCs and other employer led partnerships and associations.

The requirement to become financially self-sustaining has proved problematic for many SSCs. In some cases the issue of funding has become a vicious cycle which has hastened several SSC’s demise.

SSCs which were newly established in those sectors with a limited history of industry collaboration found that they did not have the employer engagement resources of their more established counterparts. In 2006 for example Skillsmart Retail only had 28 staff whereas Construction Skills, bolstered by its levy funding, had 1,500 (Payne 2007). This lack of resource limited the scope of employer engagement, particularly if the leadership and management of the SSC lacked credibility or recognition within the industry.

In order to survive the less established SSCs were forced to look for other sources of funding as employer contributions were not forthcoming. In short, as Woodgate (2015) notes, they became ‘a solution looking for a problem’ in order to justify their own purpose. Their heavy reliance on central government grants meant that many SSCs focused their efforts on delivering UK government targets arising from the Leitch Review. If government is the predominant source of funding then being seen to play a role in delivering these government targets becomes the main performance driver of SSCs (in order to be seen to be successful and secure more funding) rather than representing employers’ needs. These government targets were focused on the acquisition of ‘full’ qualifications (particularly at Level 2) which many employers did not consider to be either worthwhile or necessary. As a result some of these newer SSCs came to be viewed with further suspicion by the employers they were supposed to represent who saw them as tools of government policy rather than legitimate representatives of their views- thus eroding still further their credibility within the sector.

1.6 Can lessons from the UK be applied in developing country contexts?

Looking at evidence from experience in the UK we are able to draw a number of lessons about the nature, importance and performance of SSCs which can be applied when assessing the suitability of establishing SSCs in a developing country context.

i. Be mindful of significant differences between different countries’ labour markets and between sectors within these labour markets

Each country’s labour market is different and is liable to respond in different ways to the creation of sector bodies such as SSCs. Each sector within these labour markets also has different characteristics and needs. These need to be understood before work is undertaken to create such bodies. To what extent do employers face regulation and legislation requiring compliance on minimum standards of working? Is there a history of employers working together and collaborating on skills development or other sector specific issues? What are the main drivers for current employer investment in training- regulatory, corporate social responsibility or bottom-line business benefits? From an employers’ perspective where, if at all, are the current deficiencies in skills development- skills supply, skills utilization or low skills demand?

A labour market made up of predominantly small, perhaps informal sector, employers with limited regulations, a non-existent history of collaborating with each on skills development issues and a lack of collective recognition that they have existing skills issues is unlikely to provide fertile ground upon which to found an SSC.

Can stronger skills markets contribute to sustainable and decent work for all? UKFIET Conference, September 2015

Can stronger skills markets contribute to sustainable and decent work for all?

These contextual differences mean that it is not advisable to transplant structures wholesale from one country to another. Lempinen (2013:11) cites the example of Croatia which “initially tried to copy and paste examples from the British model that were not really suited to their needs and conditions” and ended up developing “their own model based on local needs and capacities.” It is also important not to draw oversimplistic lessons from one context which may not apply in another. By way of example, in the UK those SSCs with a large public sector footprint, such as Skills for Justice, did relatively well in securing funding from employers (ostensibly because employers in these sectors were generally large and, prior to the round of public sector spending cuts initiated in 2010, found it relatively easy to ring-fence training budgets from their funding allocations). However in South Africa this was not the case and those SETAs with a large public sector footprint did not perform better than their private sector counterparts.

ii. Take account of context and utilize existing employer-led bodies wherever possible. Where these don’t already exist it is important to ask why they don’t exist.

In the UK those SSCs which grew out of existing industry bodies had a number of immediate advantages when it came to recognition and credibility amongst employers, understanding of issues in the sector and in building a sustainable funding resource from employer contributions and other existing revenue sources.

If Governments decide that SSCs can play a useful purpose in supporting their industrial policy and contribute towards increasing productivity and skills utilization then they should look first at existing trade associations and related industry bodies. It is perfectly possible that these existing bodies would be capable of taking on the role and functions of an SSC without having to start a new organization from scratch. The Government may even want to consider running a competitive process and tendering out the contract for establishing SSCs to such bodies. Such an approach will allow Government to gauge the interest of the sector as well as enabling them to secure firm commitments regarding aspects such as cofinancing and employer engagement which will be important to the SSC’s performance going forward.

If trade associations and industry bodies do not exist within a particular sector then it is worth Government doing some further investigation and questioning why such organisations do not exist. It may well be that the particular features of the sector have precluded effective collaboration and that this will mean that efforts to establish an SSC (or at least the ‘traditional’ SSC model set out in Section 4 of this paper) are not likely to succeed.

Whatever model is used, Government should make every effort to ensure that it has a strong executive function whilst its governance arrangements should involve credible employers and opinion leaders representing the diversity and breadth of the SSC’s sector.

iii. Be clear from the start about the purpose of the SSC. This should be simple to explain to employers and stakeholders. Don’t overload SSCs with multiple objectives or see them as vehicles for delivering government targets.

There is a temptation to use the SSC to try and achieve a wide range of objectives from improving the quality of labour market information and analysis to increasing the responsiveness of supply side institutions; from addressing issues with labour market disadvantages faced by women and marginalized groups to increasing sector productivity and the take-up of high performance working practices; from providing and funding training directly to the development of National Occupational Standards. These are all legitimate functions for an SSC but, upon its establishment, there needs to be clarity about the SSC’s overarching objective and purpose.

Can stronger skills markets contribute to sustainable and decent work for all?

The SSC’s purpose should be simple to explain so that employers and stakeholders are immediately aware of what the SSC is trying to achieve and can then choose whether or not they want to buy into its objectives. In order to be effective this purpose should speak to the needs of employers i.e. increasing productivity, boosting bottom-line business benefits, driving up standards etc. with a clearly articulated theory of change as to how the SSC will help to deliver this objective.

While it is perfectly possible that an SSC will be able to contribute towards the delivery of government objectives and targets whilst addressing its sectors’ needs it should avoid the temptation to make the delivery of government targets its primary objective. As we saw in the UK this was a particular temptation for those SSCs which struggled to secure financing from employers and other sources. The danger of taking this approach is that the SSC is then viewed by employers as being a tool for promoting government policy rather than addressing the sector’s needs.

iv. Good quality Labour Market Information which employers in the sector can agree on provides a strong starting point for SSC action

In order to provide clarity of purpose it is helpful if an SSC is able to start from a commonly agreed and understood position regarding the needs of the labour market. If consensus can be reached amongst employers as to the quantitative and qualitative skills needs of the sector (whether that be in relation to skills supply, demand or utilization) then this provides an excellent starting point for an SSC to define its purpose and objectives.

Accurate Labour Market Information (LMI) can be very helpful in providing an evidence base for such consensus. The authors’ recent experience in the Oil & Gas sector in Uganda showed how the existence of tangible, detailed information on the quantitative and qualitative skills requirements of a sector can help generate consensus and a platform for concerted action for a nascent SSC to take forward (Mott MacDonald 2015). By contrast, the authors’ ongoing work in the Logistics sector in Uganda - where there is a distinct lack of quantitative LMI- suggests that the process of delineating the sector and then identifying and generating consensus around employers’ quantitative and qualitative skills needs will be significantly more challenging. Creating a SSC in such circumstances will require flexibility, open-mindedness and a willingness to look at a ‘light touch’ model linked to the government’s desire for a more effectively regulated sector.

v. Be realistic from the start about how SSCs will be funded and the extent to which employers will actually contribute towards their operations.

Policy makers must resist the ‘optimism bias’ when designing funding arrangements for SSCs. The lesson from the UK, and elsewhere, is that the majority of SSCs are not able to become fully financing purely on the basis of employer contributions. This is a particularly important lesson in developing countries where government funds are usually tight and require strict prioritization. Committing government start-up funding to expensive SSCs with dozens of full-time staff in the expectation that employers will pick up the slack in future years is, in most cases, a misguided approach.

In order to become self-financing an SSC has to generate outputs and outcomes that people (be it employers, training providers, learners or other stakeholders) are prepared to pay for sufficiently often and at a sufficient rate to sustain the SSC’s operating costs. Such income can come either from selling products, which are purchased by individuals or organisations, or by being seen to deliver value, which tends to be collectively paid for. If SSCs rely on developing and delivering products then the SSC risks being overly focussed on product design and development at the expense of its core remit. Delivering

Can stronger skills markets contribute to sustainable and decent work for all?

value is harder to quantify but probably easier to sustain, as long as the value continues to be recognised by those who pay for it. The customers of this value will be employers, individuals, training providers, government and society at large. The sort of value they are looking for includes: sector standards of competence; labour market information; business support to employers to improve people management and skills development; implementation of a strategy to increase the capability and capacity of learning supply; mobilisation of the sector to support achievement of other government priorities and career information advice and guidance.

The precise funding mix will depend on how much value an SSC can demonstrate to the principal fundersgovernment, employers (a levy or subscription) and, to a lesser extent, training providers. This is where utilising an existing, established trade association or industry body to fulfil the role of SSC may have considerable advantages given that such organisations often have existing and diversified funding streams.

1.7 Conclusions and recommendations

From the evidence provided in the first half of this paper we would argue that there is a need for bodies such as SSCs which provide leadership within an industry sector and develop a shared understanding of the skills needs of the sector and how addressing these will generate bottom-line business benefits.

Such bodies should focus on productivity, and the role of skills in enhancing productivity, rather than simply ensuring that skills supply meets employer demand. This requires SSCs to promote high performance working practices and focus on skills utilisation, recruitment and management practices as well as training supply.

With the right preconditions SSCs can play a role in enhancing employer engagement in skills development and increasing productivity. There are particular situations where labour market characteristics mean that SSCs will struggle to establish themselves. Policy makers need to be mindful of this and appreciate where SSCs may be an appropriate construct for enhancing employer engagement and driving productivity gains.

1.8 References

Baker Tilly (2010) ‘Alliance of Sector Skills Councils: Evaluating economic impact’

Bargain, O. & Kwenda, P. (2011), ‘Is Informality bad? Evidence from Brazil, Mexico and South Africa’, IZA Discussion Paper Series 4711

Bloom, N., Eifert, B., Mahajan, A., McKenzie, D. & Roberts, J. (2013) ‘Does Management Matter? Evidence from India’ The Quarterly Journal of Economics, Vol. 128, Issue 1 February 2013, pp.1 – 50

Bloom, N., Mahajan, A., McKenzie, D. & Roberts, J. (2010) ‘Why Do Firms in Developing Countries Have Low Productivity?’, American Economic Review: Papers and Proceedings 2010, 100:2, pp.619-623

Conservative Party (2008), ‘Building Skills, Transforming Lives: A Skills and Apprenticeships Revolution’, Policy Green Paper No. 7

Department for Business, Innovation & Skills (2014) ‘Further Education Workforce Strategy: The Government’s Strategy to Support Workforce Excellence in Further Education’, July 2014

Can stronger skills markets contribute to sustainable and decent work for all?

EEF (2014) ‘Backing Britain: A Manufacturing Base for the Future’

Froy, F. (2014) ‘Skills for the Future: Mapping Supply and Demand’, OECD presentation delivered at Work Foundation conference on ‘Skills for the Future: Securing the UK’s long term competitiveness’, 3rd March 2014, London

Government of Uganda (2012), Skilling Uganda: BTVET Strategic Plan 2012/3 to 2021/2

Government of Uganda (2014), Reform Task Force/Skills Development Agency, Sector Skills Councils (SSCs) Draft Terms of Reference

Grimm, M., Kruger, J. & Lay, J. (2011), ‘Barriers to Entry and Returns to Capital in Informal Activities: Evidence from Sub-Saharan Africa’, Review of Income and Wealth 57 (S1): S27-S53

HM Government (2014) ‘The Future of Apprenticeships in England: Funding Reform Technical Consultation’, March 2014

Keep, E. (2015) ‘What Does Skills Policy Look Like Now the Money Has Run Out?’, SKOPE

Learning and Skills Council (LSC) (2004) National Employer Skills Survey

Lempinen, P. (2013) ‘Sector Skills Councils. What? Why? How? Contributing to better VET relevance to the labour market needs’, European Training Foundation (ETF)

Li, Y. & Rama, M. (2013) ‘Firm Dynamics, Productivity Growth and Job Creation in Developing Countries: The Role of Micro- and Small Enterprises’, Background Paper for the World Development Report 2013

Mott MacDonald (2015) ‘Capacity Needs Analysis for Oil & Gas Sector in Uganda’

Payne, J. (2007) ‘Sector skills councils and employer engagement- delivering the ‘employer-led’ skills agenda in England’ SKOPE Research Paper No. 78

Powell, M., Sung, J. & Lindsay, J. (2010) ‘Case Studies of Approaches and Strategies for Sector Development’, Centre for Employment Initiatives/ILO

Stiglitz, J. & Greenwald, B. (2014) Creating a Learning Society, Columbia University Press, New York.

UK Commission for Employment & Skills (UKCES) (2012) Employer Perspectives Survey

UK Commission for Employment & Skills (UKCES) (2013a) ‘High Performance Working in the Employer Skills Surveys’, Evidence Report 71, July 2013

UK Commission for Employment & Skills (UKCES) (2013b) Employer Skills Survey 2013

Woodgate, M. (2015) ‘Logistics skill council offered solutions to non-existent problems’, FE Week, 19 January 2015

Can stronger skills markets contribute to sustainable and decent work for all?

2.1 Abstract

This paper looks at the importance of using evidence to test assumptions that underpin any theory of change, such as how to ensure decent and sustainable work. It uses two examples of development initiatives that are widely advocated to bring about beneficial changes in the labour market - national qualifications frameworks (NQFs) and training funds as case studies to show how skills development initiatives need to have sound and tested theories of change. NQFs have long been espoused as a means of improving access to, and quality of, skills training. The paper will highlight the gaps in such theories of change and consider the implications for conceptualising the use of NQFs to ensure decent and sustainable work.

2.2 Introduction

TVET reform both in the UK and international development contexts have tended to be based on a set of assumptions about what constitute effective levers of reform. One such example is the idea of national vocational qualifications based on national occupational standards and its sister concept – national qualification frameworks (NQFs). It is asserted that the development of national qualification frameworks can drive up the quality of vocational education and training and improve access and mobility.

Given the large investments that continue to be made both by donor organisations and national governments, it is important that the veracity of the claims made for any particular lever of reform is examined dispassionately. This paper suggests that theory of change methodology can provide a helpful way of looking at assumptions and evidence. This proposition is examined in some depth in relation to NQFs and more indicatively in relation to training funds and points to the need to consider more carefully the methodology used for designing and implementing skills market reforms.

2.3 Theories of change and results chains

Using a theory of change has become an increasingly common approach in project management, notably in international aid projects. A theory of change specifies all the elements necessary to achieve a given goal and defines the linkages between these elements.

The elements commonly used, e.g. by the UK Department for International Development (DFID), are:

 Impact – the broad ‘social good’ e.g. improved learning achievements

 Outcome – a change in system or social conditions that should help bring about the impact e.g. better quality schools.

 Output – a change that is brought about by inputs and that is likely to lead to – or contribute to - the achievement of - the outcome e.g. better trained teachers

 Input – an activity designed to bring about an output, e.g. training of teachers

Thus, inputs, outputs, outcomes and impact link together in a results chain that illustrates expected cause and effect.

It should be noted that, the higher the level in the results chain, the greater the uncertainty that the expected result will materialise. Thus, for example, the input ‘teacher training’ should, if performed

The role of theories of change in bringing about beneficial and sustainable change in the labour market

Can stronger skills markets contribute to sustainable and decent work for all?

competently, lead to an output such as ‘teachers have the competences to deliver effective lessons’. However, whether they actually put this training into practice, i.e. deliver effective lessons (an outcome indicator which would be an aspect of the overall outcome ‘better quality schools’) would depend on other factors, such as quality of resources, head teacher support and teacher’s own motivation.

This shows the first benefit of the theory of change approach, that it challenges simplistic ideas on how to bring about effective change. For a long time, international education aid programmes were based on the overly simple assumption that better teacher training will produce better schools. Using a theory of change is a means of trying to ensure that all major relevant factors are taken into consideration. Thus a more realistic theory of change in the example we have been considering is shown in Fig 1 below.

In this version, further factors such as resources, head teacher support and parental involvement are included, making it a more plausible theory of change. However, even this version limits itself to outcomes for which it is relatively straightforward to define the required inputs and outputs. It does not include, for example, teacher motivation, which is much more difficult to influence.

Having drafted a broad theory of change, the next steps are to articulate the assumptions implicit in the results chain and ask whether evidence exists to support each assumption. If the evidence does not exist, as often it won’t, then the design of the change initiative should include mechanisms to test the efficacy of each link in the results chain. This is now explored further in relation to theories of change more directly relevant to NQFs.

Can stronger skills markets contribute to sustainable and decent work for all?

2.4 Qualifications frameworks

A Qualifications Framework is an instrument for the development, classification and recognition of skills, knowledge and competencies along a continuum of agreed levels. It is a way of structuring existing and new qualifications, which are defined by learning outcomes, i.e. clear statements of what the learner must know or be able to do whether learned in a classroom, on-the-job, or less formally. A Qualifications Framework indicates the comparability of different qualifications and how one can progress from one level to another, within and across occupations or industrial sectors (and even across vocational and academic fields if the NQF is designed to include both vocational and academic qualifications in a single framework).

The goals or purposes of introducing NQFs normally include some or all of the following, grouped under two broad headings:

Promoting Lifelong Learning

 improving understanding of learning routes and qualifications and how they relate to each other

 improving access to education and training opportunities

 creating incentives for participation in education and training

 making progression routes easier and clearer/ improving learner and career mobility

 increasing and improving credit transfer between qualifications

 increasing the scope for recognition of prior learning (RPL)

Quality Assurance and Recognition

 ensuring that qualifications are relevant to perceived social and economic needs

 ensuring that education and training standards are defined by agreed learning outcomes and applied consistently

 ensuring that education and training providers meet certain quality standards

 securing international recognition for national qualifications

The scope of frameworks may be comprehensive of all learning achievement and pathways or may be confined to a particular sector for example initial education, adult education and training or an occupational area. Some frameworks may have more design elements and a tighter structure than others; some may have a legal basis whereas others represent a consensus of views of social partners. All qualifications frameworks, however, provide a basis for improving the quality, accessibility, linkages and public or labour market recognition of qualifications within a country and internationally.

In the case of NQFs developed in some Anglophone countries, the NQF has led to the development of distinctive features that are not normally found in traditional qualifications systems. The most important and distinctive characteristic of these NQFs is that the qualifications they contain are viewed as independent of institutions that offered the programmes leading to the qualifications. Other distinctive features include: modular/ unitised qualifications which allow the accreditation or certification of a component part of the larger qualification; and assessment based on explicit demonstrative criteria. In these countries, NQFs have come to mean not only the framework itself but also the associated distinctive features. The variation in the definition of NQF is often a source of confusion.

2.5 What are the conditions for successful implementation of NGFs?

Despite a history beginning in the 1990s or earlier, the scope of NQFs, their role in achieving educational or labour market goals, and the most effective means of implementation remain contested issues.

Can stronger skills markets contribute to sustainable and decent work for all?

Various commentators began using the experience of first generation NQFs to draw lessons about NQF implementation. One of the key lessons was that NQFs could not be seen in isolation and were unlikely to achieve their stated aims without being situated in a broader policy context.

‘A National Qualifications Framework is only a framework. It can play a vital role in supporting reforms but if it is not part of a wider strategy, it may achieve very little. There can be exaggerated and unrealistic impressions of what the building of an NQF can achieve in isolation from other developments. The key to successful NQF implementation is to develop a broad strategy that takes account of all factors influencing success.’ (Tuck, 2007)

The conditions for successful NQF implementation as identified by a range of commentators7 include:

1. Policy coherence across different ministries

2. An enabling funding regime

3. Support to education and training institutions including provision of resources and professional development

4. Genuine support and trust for the NQF among stakeholders

5. Paying careful attention to the institutional context

6. Development of communities of trust

7. Differentiation of implementation strategies in higher education, school and TVET sectors

8. Collaboration between education and industry in the setting of standards

9. Adopting a flexible approach to learning outcomes

10. Avoiding overly complex systems of assessment and QA

The identification of these conditions emanated from a number of sources. The first was the recognition of the need for policy breadth. If NQFs were to contribute to the ambitious goals intended by policy makers, then a technicist approach focused only on qualifications design and assessment and quality assurance methodologies is inadequate. It is essential to recognise that NQF implementation must: involve a wide range of stakeholders in government, civil society and private sector; include complementary initiatives that bring about real changes in institutional practices; and be properly costed and funded.

Associated with the concept of policy breadth was the recognition of the need to move beyond the intrinsic logic of NQFs and consider institutional logics: ‘the opportunities, incentives and constraints arising from such factors as the policies of educational institutions (in their roles as providers and selectors), funding and regulatory requirements, timetabling and resource constraints, the relative status of different fields of study and the influence of the labour market and the social structure’ (Raffe, 2003).

A particular aspect of paying attention to the institutional context was the importance of communities of trust. Young () distinguishes between ‘outcomes-based approaches associated with Anglophone countries and institution-based approaches as in France that rely on developing learning pathways located in specific, institutional, occupational and academic communities and not on the detailed specification of outcomes’ and notes that ‘qualifications, like so much in social life, depend on trust , not just laws or criteria. However, it is far from clear what the new communities of trust will be that will underpin the emerging frameworks, once subjects, disciplines, crafts and trades have disappeared or become marginalised.’

7 It should be noted that while some commentators, e.g. Tuck and Keevy, see these conditions as possible and attainable, others (e.g. Young and Allais) have concluded that NQFs are conceptually flawed and therefore unlikely to meet the conditions for success

Can stronger skills markets contribute to sustainable and decent work for all?

The other conditions set out above have their origins in analyses of the problems of implementation in first generation NQFs, e.g. Tuck 2007. These problems included: a failure to take account of intrinsic differences between the major education and training sectors; an anti-provider bias that over-stated the role of users in defining qualifications; an overly rigid approach to learning outcomes; and the introduction of complex and burdensome systems of assessment and quality assurance.

To date, however, debate around NQF purposes and implementation has not progressed beyond these general lessons and exhortations such as greater policy breadth. The central thesis of this paper is that what is now needed is a rigorous methodology for change. This methodology should situate NQF development as a set of inputs which, alongside other inputs, can achieve clearly defined objectives. It is also necessary to have evidence to support any assumptions that particular inputs are likely to produce the desired outputs and outcomes. It is the emphasis on evidence of what works and what doesn’t that has the potential to change the terms of the debates around NQF implementation.

2.6 Could a theory of change make NQFs more effective instruments for radical reform?

To consider how theories of change might apply to the implementation of NQFs, we should start with intended impact(s) and work back to outcomes and outputs. However, when we ask ourselves ‘what is the intended impact(s) of introducing an NQF?’ we make the surprising discovery that the answer to this question is usually far from clear.

The rationale for any NQF usually consists of a set of purposes, such as8 :

 establish national standards of knowledge, skills and wider competencies to ensure the relevance of qualifications to national economic and social needs

 resolve the diversity of sectors and improve articulation and comparability between qualifications of different sectors

 establish national quality standards and systems for quality assurance of providers, programmes, delivery and assessment

 establish clear progression pathways and facilitate procedures for access to learning and transfer and recognition of learning

 provide a means to benchmark qualifications nationally and internationally

It is clear that none of these purposes are impact statements, i.e. none of them define a ‘social good’ such as improved learning or more competent workers.

Furthermore, it’s not really clear whether the purposes are outcomes or outputs. Take, for example, the two purposes that relate to ‘establishing standards’. What do these statements mean? Are standards established when there is a document that clearly articulates the standards? These would be outputs. Or do these purposes imply that the standards are understood and accepted by the relevant stakeholders? These would be outcomes.

Both of course are valid interpretations of the purpose statement. The point is that if we want to achieve a certain impact, then we need to ensure that we are aiming to achieve outcomes that are likely to lead to the achievement of this impact – and not merely an output that is a step towards the outcome. Second, we need to be clear about the meaning of any element (impact, outcome or output) if we are to be able to tell whether we have achieved it.

8 This example is from the Ethiopian National Qualifications Framework

Can stronger skills markets contribute to sustainable and decent work for all?

NQF purposes tend to fall into two broad categories: those concerned with access and progression; and those concerned with relevance and quality.

Let’s look first at access and progression. The two purposes in this category are: resolve the diversity of sectors and improve articulation and comparability between qualifications of different sectors; and establish clear progression pathways and facilitate procedures for access to learning and transfer and recognition of learning

What is the broad social good that the NQF is seeking to achieve here? The first of the two statements seems to imply that the ‘diversity of sectors’ and inadequate ‘articulation and comparability’ create barriers to learning and achievement to the detriment of some or all learners and perhaps also to the detriment of the effective functioning of the labour market. The second suggests that ‘progression pathways’ aren’t clear (a point which partially overlaps with ‘lack of articulation’) and that the current training and qualifications systems aren’t as accessible as they should be and don’t take account of non-formal and informal learning.

This might lead us to the conclusion that the desired impact was something like: learners are able to progress through their chosen learning pathways without unnecessary difficulties. This would cover being able to make transitions between different education sectors as well as within a sector and to be able to progress efficiently, i.e. without repeating learning for what one already knows or can do.

At this stage, a problem becomes evident. Some progression pathways clearly work very well. In almost all education and training systems, the progression from senior secondary school to university and throws up few barriers (if one discounts shortage of places). So who are the intended beneficiaries of improved progression pathways? Which groups of learners are currently disadvantaged?

Here one must turn to the rationale for the NQF. Is there an analysis of which categories of learners (e.g. adults leaving school without qualifications) are disadvantaged and what the nature of the barrier is? Or are there any transitions which are desired by learners but difficult in practice such as from vocational qualifications to academic higher education qualifications? And are these real barriers for significant numbers of learners or hypothetical barriers posited by reformers seeking a perfect world?

These are quite tough questions but essential if the discourse on NQFs is to progress beyond rhetoric to reality. The following acid test is proposed: successful achievement of the impact should be defined along with valid and reliable means of evaluating success. If this can’t be done, then the NQF venture is essentially a blind one.

On the positive side, defining success clearly should help greatly to focus NQF developments and provide more evidence of success than has hitherto seemed possible.

Returning then to our proposed impact (learners are able to progress through their chosen learning pathways without unnecessary difficulties) we should identify the categories of learners or types of transitions that we are seeking to change (e.g. adults without formal school qualifications seeking entry to higher education), gather baseline data and then plan for repeat surveys after an appropriate length of time. It would not be possible to measure changes in all kinds of progression pathway so only the most significant should be chosen.

With impact and impact indicators/measures defined, the next step is to define the outcomes (changes in systems and/or social conditions) that are essential to the achievement of the impact. Is it enough to define

Can stronger skills markets contribute to sustainable and decent work for all?

the progression pathways? Is it even enough if information on these pathways is accessible to all who are interested?

Flexible progression pathways include aspects such as institutions giving credit for prior learning whether formal, non-formal or informal. This in turn means that credit accumulation and transfer (CAT) and recognition of prior learning (RPL) systems must be developed. These are technical tasks of some complexity which all NQFs must address.

However, since the practical implementation of new progression pathways lies in the hands of education and training institutions, the institutional contexts must also be taken into account. This brings us to considerations both of capacity and motivation.

Such demands create new challenges for institutions. In place of the simple old system of a group of learners all starting at the same time and undertaking exactly the same learning programme, there should now be a system whereby the institution can cater for the needs of individual learners by offering programmes that take the previous learning of each individual as the starting point of a new programme. This is a radically different delivery system and one that requires different resources, procedures and staff competences. The capacity development implications are significant.

However, the motivation challenge may be even greater. What are the incentives for institutions to change? If you are a ‘selecting’ university rather than a ‘recruiting’ university (i.e. you have no difficulty in attracting able students and indeed are turning hundreds away) why would you want to complicate life by introducing challenging new systems?

Often, the NQF enthusiasts who are leading national reforms think that it’s enough to espouse the vision of the exciting new education and training system that the NQF will usher in, rather than understanding the ‘institutional logics’ that are usually very different.

Motivation to engage with reform may also be tempered by lack of trust. Sticking with our impact indicator of more adults without formal qualifications entering higher education, one popular solution has been the development of access programmes for adults which allow them entry to designated higher education courses after, say, one year of study. This approach may be educationally valid but some scepticism from receiving institutions is to be expected. How do they know that the adults progressing through this route will be adequately prepared for – and have the potential to succeed in – their chosen course? And is this fair on young school leavers who may be denied a place because of the priority given to adults?

These considerations lead to the conclusion that it is necessary for education and training institutions to engage with access and progression reforms in ways that allow them to work out how such changes are to be assimilated in acceptable ways and trust developed.

The outcomes required for our intended impact may now be as follows:

 Progression pathways understood by users

 CAT and RPL systems understood and accepted by users

 Institutions have capacity to deliver flexible learning

 Institutions willing to deliver flexible learning

The outputs likely to be deemed essential to the achievement of the outcomes include:

 The most relevant progression pathways are defined

 CAT and RPL procedures are defined

Can stronger skills markets contribute to sustainable and decent work for all?

 Information on progression pathways, CAT and RPL procedures are communicated to stakeholders

 Essential resources are identified and provision made

 Training is provided for all who need to implement the new systems and procedures

 Incentives are offered to institutions to encourage participation

This gives us a results chain as shown in Fig 2 below.

This is quite a simple results chain and is intended to be indicative rather than definitive. It could provide the starting point for discussions among stakeholders. Questions to be asked would include:

 Is the theory plausible? Does it include all the important factors?

 What assumptions are being made? What evidence is there to support these assumptions?

 Which are the weakest links in the chain?

 What evidence should we be planning to collect?

Such an interrogation should lead to a more refined theory of change, a degree of consensus among stakeholders and an implementation plan that includes testing of assumptions through gathering of evidence.

2.7 Summary and Conclusions

This paper suggests that the use of theory of change methodology could provide a way of analysing and articulating the steps necessary to achieve desired goals and in particular to identify the assumptions that underpin the belief that the said steps can achieve the desired goals. All assumptions may then be analysed to identify whether there is evidence to support them. If not, reform may still proceed on the basis that the assumption seems plausible but the implementation methodology should include measures to gather the evidence that will support or challenge the assumption.

Can stronger skills markets contribute to sustainable and decent work for all?

2.8 References

1. Allais, S. 2010. The impact and implementation of NQFs: Report of a study in 16 countries. Report for the International Labour Office

2. Bouder, A. 2003. Qualifications in France: towards a national framework. Journal of Education and Work, Vol. 16(3), pp.346-356.

3. Granville, G. 2003. ‘Stop Making Sense’: chaos and coherence in the formulation of the Irish qualifications framework. Journal of Education and Work, Vol. 16(3), 259-270.

4. Keevy, J.A. 2003. Planning the South African NQF Impact Study: Implications for a SADC RQF. Paper prepared for the UNESCO Learning for Life, Work and The Future Conference held in Dar es Salaam, 22-26 September 2003.

5. Raffe, D. 1988. Modules and the strategy of institutional versatility: the first two years of the 16plus Action Plan in Scotland. In Raffe (Ed.), Education and the Youth Labour Market, Lewes, Falmer.

6. Raffe, D., Croxford, L. & Howieson, C. 1994. The third face of modules: genderised patterns of progress in Scottish Vocational qualifications. Journal of Educational Policy, Vol. 17, pp.169-185.

7. Raffe, D. 2003. “Simplicity Itself”: the creation of the Scottish Credit and Qualifications Framework. Journal of Education and Work, Vol. 16(3): pp.239 – 257.

8. Raffe, D. 2009. National qualifications frameworks in Ireland and Scotland: a comparative analysis.Paper presented to European Conference on Educational Research, Vienna, 28-30 September 2009.

9. Tuck, R., Keevy, J.A. & Hart, J. 2004. The relevance of the National Qualifications Framework Impact Study to qualification framework development in the Southern African Development Community. Paper presented at the Qualification Africa International Conference held at Gallagher Estate, Midrand South Africa, 15-16 September 2004.

10. Tuck, R. (2007). An Introductory Guide to National Qualifications Frameworks; Conceptual and practical Issues for Policy Makers. Geneva: Switzerland

11. Young, M. F.D. 2003 National Qualifications Frameworks as a Global Phenomenon: a comparative perspective, Journal of Education and Work, Vol. 16(3): pp.223

237.

12. Young, M. F.D. 2005. National Qualifications Frameworks: their feasibility and effective implementation in developing countries. Draft report prepared for the International Labour Office.

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3.1 Abstract

This paper is based on a think-piece undertaken for DFID in March/April 2015. It projects forward from the global labour market of today, to that of 2030 and identifies the skills which workers will require to operate successfully in it. It takes account of technology, demographics, increased urbanisation, the growth of the green economy and migration in highlighting an ever-increasing need for workers with STEM disciplines and strong cognitive and inter-personal skills, who can operate across cultures and across disciplines. Proposals include the harnessing of technology, a distinct role for businesses, a re-vitalisation of educational institutions to make them more entrepreneurial and strategies to better exploit the skills of developing countries' diasporas. Throughout, the paper stresses the increased globalisation of the labour market, the increasing demand for high-skilled, knowledge workers with social intelligence and the breaking down of geographic barriers in the search for and procurement of such workers.

[A version of this paper by Dr Muriel Dunbar was developed for DFID's Education Thinkpiece series. Any views and opinions expressed do not necessarily reflect those of DFID or any other contributing organisation.]

3.2 The Starting Point: Today’s labour market

In order to foresee the labour market of tomorrow, we need to understand why it is as it is today. Many of the difficulties being experienced by workers around the world can be traced to the global financial crisis which began in 2008. Even accounting for the fact that unemployment is widely under-reported and many people are under-employed, ILO calculated that over 201 million people were unemployed world-wide in 2014 – over 31 million more than before the crisis. It is estimated that there were 61 million fewer jobs in 2014 than would have been expected had the crisis not struck. This upward trend of unemployment is expected to continue at least until 2020 despite the fact that the growth of the labour supply globally is on the brink of a significant slowdown, largely due to falling birth rates and labour force ageing. Comparing projected average annual labour force growth until 2030 with the rates recorded over the past 25 years, sub-Saharan Africa is the only region where labour supply will continue to rise as rapidly as before. (ILO 2015)

In recent years there has been a decline in medium-skilled, routine jobs but a rise in demand for jobs at both the lower and upper ends of the skills ladder. Low-skilled occupations and non-routine manual jobs make up more than 45% of total employment world-wide, while medium-skill jobs account for around 37%. High-skilled, non-routine cognitive jobs which make up more than 18% of total employment are increasing. These trends are set to continue although with significant regional variations. (ILO 2015) However, due to the exponential increase in the global supply of ‘knowledge’ workers, high skills are a declining source of competitive advantage for developed countries. The assumption that it would take decades for emerging economies to compete for high-end manfacturing and services, including research and development, has proved false. (Brown et al 2008)

In 2014, information gathered from over 37,000 employers in 42 countries and territories showed that 36% of employers were having difficulty filling jobs and 54% reported that talent shortages were having a medium or high impact on their business. (Manpower Group 2014)

3 Skills and Capacity: What does learning need to look like today to prepare the workforce of 2030?

Can stronger skills markets contribute to sustainable and decent work for all?

Women are both under-represented in the global workforce and more likely to be in vulnerable employment. Countries with the largest gaps between male and female employment figures, experience income losses of up to 30% of GDP per capita in comparison to a situation where gender gaps would be lowered to the world average. (ILO 2015)

3.3 Forces shaping the labour market of tomorrow

The labour market of 2030 will be heavily influenced by global trends in technology, migration, urbanisation, demographics, foreign direct investment, education, agriculture and the environment. These trends will change the nature of work, access to it, and the skills sets required.

The coming decades will see higher international mobility of labour and jobs, meaning an increase in migration, outsourcing and off-shoring. While Central Asia, the high-income countries in E. Asia, China, Europe and N. America will collectively lose 216 million workers by 2050, the sub-Saharan Africa labour force is projected to increase by 328 million. Migration into deficit regions is therefore likely to intensify. Labour shortages will be experienced both in mid-level occupations (nurses, intermediate business services) and low-level skills (retail sales, waiters). (World Bank 2009)

Worldwide research into multi-national corporations shows that the rapid expansion in the global supply of high-skilled workers in low-cost as well as high-cost economies, advances in information technologies and rapid improvements in quality standards, mean that international companies will no longer need to divide their skills strategies between high-cost ‘head’ nations employing high-skilled, high-waged workers, and ‘body’ nations that are restricted to low-skilled, low-waged employment. (ESRC 2008)

Just as there exist job titles today that did not exist 15 years ago, so we should expect that technology will lead to new jobs emerging in the next 15 years. At the same time an evolution of existing jobs is happening – new tasks, new knowledge and skills and changing work patterns. (UKCES 2014a) Further advancements in the fields of robotics, algorithms and artificial intelligence may also make it possible to automate processes and services that are currently provided by high-wage experts. This could lead to a further decoupling of productivity from employment and to the de-skilling of jobs i.e. stripping them of routine, complex technical tasks, thereby leading to a new focus on interpersonal skills in what were formerly purely technical occupations. (UKCES 2014b)

Population drift to the cities is likely to have a major impact on labour markets in developing countries in the coming 15 years. By the late 2030s, Africa will have more people living in urban than in rural areas and by 2050 almost 60% of Africa’s population will live in cities. For young people this will exacerbate problems of urban unemployment and underemployment and the hopelessness of bleak economic prospects for urban youth that is currently being experienced in other world regions (UNICEF 2014) where only a fraction of workers in the urban labour force has access to jobs in the regulated formal sector. (Slonimczyk 2014) It will also bring them into contact with a labour market which is increasingly globalised and based on technology.

The period up to 2050 will see massive demographic change. Sub-Saharan Africa is regarded as being in the early stages of a demographic transition which could prompt a ‘demographic dividend’ as the productive capacity of the working age population surges with the additional labour supply. (ILO 2015) Africa’s youth bulge, coupled with a rising middle class, is regarded as a catalyst for further growth (Africa Development Forum 2014), particularly in the consumer sectors and services (African Union 2013).

Can stronger skills markets contribute to sustainable and decent work for all?

Companies no longer need to divide their skills strategies between high-cost ‘head’ nations employing high-skilled, high-waged workers, and ‘body’ nations that are restricted to low-skilled, low-waged employment. Preconceived ideas, about what can be done where, are being challenged. While the home base still remains a key location for developing and co-ordinating corporate strategies, there is a trend towards much greater experimentation with high-end work in low-cost locations. employers do not regard the availability of technical skills as a problem – workers can be trained in these. What is prized are behavioural competences including initiative, perseverance, time-management and team-working. (ILO 2015) The challenge now is to effectively integrate these local employees and local business processes into the infrastructure of global organisations in order to remain competitive. (IFTF 2011)

The importance of establishing a solid foundation of education for all who enter the workforce cannot be over-emphasised (Adams et al 2013): ‘Failing to do so leads to long-term adverse consequences for skills acquisition, the type of employment held, and one’s subsequent earnings in employment.’ While primary schooling increases the likelihood of employment in the informal sector and off-farm work, and opens the door to post-basic education, secondary and higher education are generally required for entry into the formal sector. Even traditional apprenticeships, often seen as the answer to youth unemployment, have only a limited impact on earnings and few make the transition into employment in the formal sector. One of the major causes of this is ‘the limited education and literacy of those who pursue their skills through this means’. (Adams et al 2013)

Agriculture and agribusiness are projected to be a US$ 1 trillion industry in sub-Saharan Africa by 2030, compared to US$ 313 billion in 2010. (World Bank 2013) Together they account for nearly half of GDP in Africa. However, commercial farming and agribusiness today are managerially and technically complex and suffer from a lack of well-trained university and diploma graduates with skills in communication and team work and practical skills in business management, marketing and finance. Few educational institutions have made the major changes required to produce significantly different types of graduates and the more educated youth, reluctant as they often are to enter this sector, require support in the form of skill development and capital, in order to become entrepreneurs – farmers as well as owners and managers of agribusinesses. (World Bank 2007)

The ILO warns that the transformation to economies which give greater priority to environmental issues will have profound impacts on the way we produce, consume and earn a living in all countries and sectors and will cause major structural changes in labour markets. (Eberts 2011) This will happen through: additional jobs being created; some employment being substituted; some jobs being eliminated without direct replacement; and many existing jobs being transformed and redefined as skill sets, work methods and profiles are ‘greened’. (Martinez-Fernandez et al 2010) The greatest impact will be felt in agriculture, transport, extractive industries, construction, manufacturing and services.

3.4 Surviving and thriving in the 2030 labour market

The skills required of workers in 2030 require a different emphasis from those being learned today. This is as true of workers in the new urban environments of the developing world as it is of workers in the developed world. All are now trading in the same market. Throughout the literature reporting on interviews with employers, there is a high degree of consensus on the skills which workers will need in 2030 and the issue of soft skills constantly occurs.

Can stronger skills markets contribute to sustainable and decent work for all?

3.4.1 Skills for Global Citizenship

A trend is emerging which suggests that as economies develop and diversify, the demand for higher-level cognitive skills increases relative to the demand for manual job-specific skills. (Almeida et al 2012) Vulnerable groups, such as the unemployed and first-time job-seekers tend to have low cognitive scores or lack the behavioural skills that predict success as a self-employed worker or entrepreneur. Purely technical and company-specific skills are not considered sufficient in a labour market which prizes employability and trainability. Individuals now have far more autonomy and flexibility in their working life and therefore managing projects and workloads is likely to become an essential skill for most workers. Technical training will need to be supplemented with life skills to promote openness, facilitate adaptation to foreign environments, including languages, and nurture the ability to recognise and seize opportunities. (World Bank 2009) There is also a clear trend towards individuals needing to take greater responsibility for acquiring and continuously updating their skills through, for example, self-directed, bite-sized learning, peer-to-peer learning and technology-enabled training opportunities. (UKCES 2014a)

3.4.2 STEM skills

To prepare for jobs which are sought after on the labour market and which are resilient to computerisation, many more students must be given the opportunity to learn science, technology, engineering and mathematics skills. In the developed world, the lack of STEM skills is being referred to as a ‘crisis’, blaming poor careers guidance for the low numbers of STEM graduates progressing into jobs in industry while the demand for STEM graduates and the jobs which they can access at all levels continue to grow. (CBI 2012) Although STEM skills are currently taught, their value on the labour market is underestimated by learners and their advisers. STEM skills are more expensive to teach than arts and social science subjects and require greater investment when, in the past, the return on them has been less obvious.

3.4.3 Second chance opportunities

Workers already in the labour market of poor countries, who have primary education or less, need assistance to learn the basics which employers demand: punctuality, communication with supervisors, teamwork, time-management etc. (MGI 2012a) Employers will not expect to teach these themselves. However, they may build on them by training in company-specific skills. Learners therefore need to become trainable, presenting future employers with a basic grounding for the world of work.

However, 2nd chance opportunities are needed not just by the poorly educated or the young. Many countries count amongst their unemployed a majority of young graduates and school and university dropouts. These are often a legacy of poor education policies, a preponderance of arts graduates and the expectation of government jobs for all. In India, for example, 50% of university graduates obtain a diploma in arts, which far exceeds the demand from employers for such a qualification. (Almeida et al 2012) The imbalance between arts and STEM enrolments must be corrected and young, unemployed graduates diverted to training in technical and life skills (World Bank 2009).

3.4.4 Access to employment services

Tomorrow’s labour market, with its global, technology-driven characteristics, could be a daunting place, especially for young people with little or no social capital9 and limited networks. In an inter-connected

9 The OECD defines social capital as “networks, together with shared norms, values and understandings that facilitate co-operation

Can stronger skills markets contribute to sustainable and decent work for all?

world, up-to-date, easily-accessed information will be critical for making career decisions and finding, and responding to, job opportunities. The role of employment services, which has always been important is now even more so, and is dependent on good quality labour market information being available. To generate the information and make it available to learners requires an effective partnership between industry and government. Public Employment Services should be expected to: provide good information about the labour market; assist with job search and provide placement services; administer unemployment insurance benefits; and administer labour market programmes. (Koeltz 2012) In many countries the public employment services have shown that they can respond effectively to increased, perhaps unexpected, demands. (ILO 2009)

Employment services are the oil which keeps the labour market working, bringing buyers and sellers of skills together, creating a market place in which they can meet and trade. Without it much is left to chance with the danger that neither knows what the other is offering or where to find the best fit.

3.4.5 Recognition of qualifications and of informal work experience

In a global marketplace an individual’s competence will be judged against that of workers from other countries or regions and requires some form of validity to give it value. This usually comes in the form of formal assessment leading to qualifications. Unfortunately for many workers from developing countries, their qualifications are deemed to be of little value as the content and the quality assurance fall below accepted international norms.

Qualifications, while not the only currency on the labour market, are an extremely useful one. Without formal certification, it is much more difficult for workers to navigate their way through the labour market and convince employers of their worth. At present, the qualification systems of many developing countries are regarded as lacking integrity in both the content of training and the assessment of students, in some cases with a high instance of forged certificates. If the currency with which people are trading is not considered credible then the market cannot function effectively.

3.4.6 Entrepreneurship and start-up services

In all regions of the world, and particularly in Africa, small and medium-sized enterprises (SMEs) will be the main drivers of the job creation required to realize inclusive, sustainable growth. (EY 2014) Learners will therefore require to develop entrepreneurship skills which, if they do progress into a career in a large organisation, can still be applied to the benefit of their employing organisation. To increase the likelihood of a high success rate of new business start-ups, support services will be required to provide incubation, advice and lobbying.

3.5 Implementing at scale

The challenge of skilling massive numbers of workers to the standards required by employers in 2030 is a daunting one. Key to it will be the widespread application of learning technology, the engagement of employers for company-specific training and updating, the introduction of entrepreneurial business practices to the management of educational institutions, integrated employment services to support learners, workers and entrepreneurs in a complex market and tapping the potential of the female labour force.

within or among groups.”

Can stronger skills markets contribute to sustainable and decent work for all?

The workers of tomorrow will ideally be predominantly STEM graduates with a range of well-developed soft skills, confident in the application of technology and with an understanding of the green economy They will be highly skilled in a particular discipline but with a good understanding of related disciplines and crossdisciplinary opportunities (so-called ‘T-shaped workers’), well-informed about career opportunities locally and globally, and able to bring an entrepreneurial approach to their work. They will have access to regular skills-updating opportunities, and possess qualifications and skills which are recognised beyond their immediate working location. What actions can be taken towards achieving this scenario and how might these actions contribute to achievement of the new Sustainable Development Goals for 2030? (EFA GMR 2015)

Actions which governments and donors may support include:

i. Harnessing technology

To date, technology-enabled learning has been largely the preserve of higher education. In many African universities it has been used to improve both distance and face-to-face learning. The lessons learned from overcoming technology-related challenges in HE can be used to inform the application of technology for skills development. For example, groups such as OER Africa and the African Virtual University are collaborating with governments, universities, development partners and the private sector to offer distance and online courses, non-academic as well as academic, which are designed to respond to the needs of local employers. (Butcher et al 2011) The challenges which would need to be overcome in order for technology to be applied successfully for skills development include:

 Meeting the high demand from growing populations;

 Funding;

 Developing and implementing robust national policies on, and political support for, distance education;

 Infrastructure constraints, not least the digital divide between urban and rural campuses;

 Training sufficient professionals in the development and delivery of teaching materials

Until now, technology-enabled learning has been applied in only a limited way for intermediate skills requiring practical, hands-on experience. However, it now has the potential to be used as a tool for:

 Training and updating the vast number of additional teachers who will be required to deliver the training for 3.1 and 3.2 above and to do so to international standards. This would include in-service training for existing teachers, as well as aspects of pre-service training.

 Contributing the theoretical content and providing demonstrations of its application in blended learning programmes for learners of medium- and high-skilled jobs, thereby increasing the capacity of public and private education institutions in a quality-controlled manner.

 Enabling access by informal workers to formal education leading to recognised qualifications.

ii. Enlist businesses

Engaging the resources of the private sector is often regarded as the solution to the increasing pressure on further and tertiary education establishments to enrol growing numbers of school-leavers. Undoubtedly, working with employers to make better use of and expand their in-house facilities is valid, bearing in mind that these will still only be available to recruits who can display the behavioural soft skills described earlier and, for the most part, have at least a basic education in one or more of the STEM disciplines. Employers will not see it as their role to compensate for failures in the state education system by providing basic education to raw recruits who lack an understanding of workplace mores and expectations. In addition, employer-based training has the disadvantage of being company-specific and not always imparting skills which are transferable to other employers or jobs, potentially trapping workers in low-skilled, low-paid work.

Can stronger skills markets contribute to sustainable and decent work for all?

Global skills shortages are putting pressure on the private sector to become learning companies, which are taking the best of the underskilled and topping-up their shortcomings through in-house training. The private sector needs to be encouraged to dig more deeply into the pool of underskilled and to develop strategies to realise their potential. This is much more likely to occur in large companies. (IFC 2013) Enterprise Surveys data shows a positive correlation between company size and company training provision. Although on average around 40% of companies provide in-house training for their staff, only about 29% of small enterprises do, 44% of medium-sized enterprises and 67% of large enterprises. In countries where economic development is heavily dependent on the growth of SMEs, government intervention may be required to compensate for a lack of in-house training.

It is important to be realistic and to accept that not all workers will be able, or have the motivation, to aspire to medium- or highly-skilled jobs and so creating demand for less-skilled labour will also be critically important for developing countries. This can be aided by increasing employment in labour-intensive manufacturing; removing barriers to growth and job creation; ‘frugal innovation’ in products and services; and lowering barriers to housing and infrastructure projects, thereby unlocking the potential of the construction sector to create jobs with forward and backward linkages to industries such as cement and steel production. (MGI 2012a)

iii. Develop the female labour force

Economies with high female labour force participation rates experience economic growth slow-downs less often, indicating a higher resilience to adverse economic shocks. More women in the labour market results in an economy making greater use of its productive potential and acts as a powerful anti-poverty device. The African Union sees women as ‘untapped potential’, representing ‘an enormous reservoir of energy to propel Africa’s development’. (African Union 2013)

However, in a labour market driven by technology there may be an additional obstacle in equipping women with the skills required. Research has repeatedly pointed out the existence of a wide gender gap when it comes to technology. Boys use computers and the internet more than girls, have wider computer experience, spend more time online, report greater interest in and perceive more positive attitudes to computer-related activities and also appear to be more motivated to learn digital skills. (CERI 2008) Developing the female labour force will contribute directly to Sustainable Development Goal 4.5, (EFA GMR 2015) which is concerned with eliminating gender disparities and ensuring equal access to all levels of education and vocational training for members of vulnerable groups.

iv. Exploit the job creation potential of the agriculture and agri-business sectors

Governments wishing to use agriculture and agri-business as a driver of the economy will need to include skills development as a major plank of their strategy by:

a. Building the range of agribusiness skills at all levels to overcome skill shortages currently hindering growth.

b. Providing entrepreneurship training and support services for agriculture and agribusiness startups and for established businesses with the potential to expand.

c. Encouraging rural youth to enter agriculture and to perceive it as a dynamic sector.

Providing continuing information and advisory services to farmers and small businesses to promote the commercialization of agriculture. (World Bank 2013)

Can stronger skills markets contribute to sustainable and decent work for all?

v. Revitalise training institutions

Training institutions are key if the need for middle and highly-skilled workers is to be met. All three of the main post-school types of training programme depend on them to a greater or lesser extent: preemployment TVET; on-the-job training; and training-related active labour market programmes. The policies for these are often disconnected and no integrated framework exists to link them to specific government and market failures. (Almeida et al 2012)

Training institutions of the future will require to be re-profiled to:

 develop faciliities and programmes which reflect the content required by employers, with high utilisation rates to accommodate increased numbers of learners using different modes of learning;

 incorporate recognition of prior learning into training programmes to allow skills acquired informally to be certificated, learners to be fast-tracked through training programmes and to facilitate transition of workers into the formal economy;

 promote and accommodate ‘earn-and-learn’ programmes in partnership with businesses to encourage poorer students to participate in learning and to facilitate upskilling and updating of people already in work;

 enhance the quality and increase the variety of training programmes by incorporating blended learning into the curricula for a more worthwhile student experience and better employment results;

 become ‘entrepreneurial colleges’ which are run along business lines but with a public service ethos.

vi. Provide integrated support services

Success in the above initiatives will be more likely if they are underpinned by high-quality support services which provide learners, employers, entrepreneurs, business start-ups and would-be and returning migrants with the careers advice, job search services, facilities, connections, access to networks and finance, and incubation support which they need. These services can be integrated but tailored through technology to each client, as much of the information is equally relevant to different customer groups. National systems can link into international ones to support migrants as well as workers wishing to access international opportunities while remaining home based, through contingency working or targeting FDI opportunities and outsourcing.

However, in order to provide these support services there will need to be a very considerable improvement and expansion of the labour market information systems (LMIS) of developing countries. Some do not exist, or exist in name only as they are not operating. Others collect, sometimes intermittently, a very limited range of data which is insufficient to undertake meaningful analysis and then to draw conclusions. LMI needs to be drawn from a range of sources and across all sectors, preferably taking account of both the informal and formal job markets. LMIS is currently a critical weakness in the skills landscape of most developing countries and its lack will undermine other attempts to create the workforce which will be required by employers in 2030.

3.6 Conclusion

The markets for skills, whether global or regional, are volatile and subject to rapid change, just as the economies which they serve are a constantly-changing picture. Some of the changes which we can envisage for the coming 15 years are particularly radical and will require workers to be prepared to change job regularly and to re-skill and update on a continuous basis. Workers whose jobs are most resistant to computerization are also those who are most likely to have technology as a fundamental feature of their work i.e. high-skilled workers in STEM disciplines. The increase in service occupations and the reliance

33

Can stronger skills markets contribute to sustainable and decent work for all?

across all sectors on collaborative working, cross-discipline working and contingency working will require a level of inter-personal skills, self-sufficiency and resilience which has not been the norm until now. Workers in developing countries, particularly in sub-Saharan Africa, have an opportunity to step into the shoes of ageing workers in the developed world, but only if they can equip themselves with the necessary skills, based on a sound general education which extends into secondary schooling. These skills, together with well-functioning, support services will allow them to successfully negotiate a labour market in which employers are searching globally for high-quality workers.

However, for this to happen the market for training services needs to take a different approach. Instead of reacting to changes in the labour market after the event, it must become more entrepreneurial by anticipating change and using technology to sell the services which its customers, the learners, now need. Perhaps unlike other forms of education, skills training has one very clear objective: to allow learners to acquire decent work10 at an income higher than if they were untrained. At present, many training providers fail in that objective because their offer is trailing behind the labour market, and they are unaware that the requirements of that market have changed.

In summary we need to recognise where opportunities exist, understand these opportunities better and then work towards realising them as a means towards achieving the SDGs by 2030.

3.7 References

Adams A V, Johansson de Silva S, Razmara S. Improving Skills Development in the Informal Sector: Strategies for Sub-Saharan Africa. World Bank, Washington DC, 2013

ADB. Asia 2050: realizing the Asian century. ADB 2011

ADB. People’s Republic of China: Strategies for Green Jobs Creation and Promotion. Final Report 2014

ADB Institute, ILO and OECD, Building Human Capital Through Labour Migration in Asia. Japan 2015

Africa Development Forum: Youth Employment in Sub-Saharan Africa, World Bank, Washington, 2014

African Union. Agenda 2063: A Shared Strategic Framework for Inclusive Growth and Sustainable Development. Background Note, August 2013

Almeida R, Behrman J, Robalino D., The Right Skills For The Job? Rethinking Training Policies for Workers, World Bank, Washington DC, 2012

Ananiadou K, Claro M. 21st Century Skills and Competences for New Millenium Learners in OECD Countries. EDU Working Paper no. 41, OECD 2009

d’Aquin M (2014) Linked Data for Open and Distance Learning, Commonwealth of Learning

Awases M, Gbary A, Nyoni J, Chatora R. Migration of health professionals in six countries: report. Brazzaville: WHO Regional Office for Africa; 2003. Referenced in Stilwell B, Diallo K, Zurn P, Vujicic M,

10 The ILO defines ‘decent work’ as: work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity for all women and men.

Can stronger skills markets contribute to sustainable and decent work for all?

Adams O, Dal Poz M. Migration of health care workers from developing countries: strategic approaches to its management. Bulletin of the WHO, August 2004, 82(8)

Brown P, Ashton D, Lauder H, Tholen G. Towards a High-Skilled, Low-Waged Workforce? A Review of Global Trends in Education, Employment and the Labour Market. Monograph No. 10 October 2008, ESRC funded Centre for Skills, Knowledge and Organisational Performance, Cardiff and Oxford Universities

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