Education and training are important determinants of firm performance. Through a well-educated and trained workforce, firms have better access to information, expertise, and knowledge which can enhance their productivity and competitiveness. Firms with more educated owners or entrepreneurs also tend to perform better in terms of sales and profits and are more likely to have better survival rates.
However, an ‘inadequately educated workforce’ is often cited as the ‘most serious’ constraint to firms in Trinidad and Tobago. A review of several private sector surveys conducted by both local and international organizations have consistently reported this perception (see IDB, 2016). If these perceptions are true, it implies a major policy gap that should be addressed if the private sector is to become a key driver of sustainable economic growth.
Firms Are Not Just Whining; The Skills Gap Is Real
We find empirical evidence which supports the perceptions of businesspersons that a skills gap exists in Trinidad and Tobago. The evidence suggests an undersupply of workers with university degrees, secondary education, and secondary education with training. Underemployment also exists, particularly for university graduates (Table 1). In fact, the University of the West Indies tracer survey for Trinidad and Tobago shows that more than half of graduates from the largest faculty-Social Sciences-perceive their university degree to not be relevant to their current job. This is reflected in an increasing unemployment rate for Trinidad and Tobago graduates since 2009 (Figure 2).
Figure 1: Labour Demand and Supply Differentiated by Educational Level (percent)
Source: PROTEqIN Survey, 2014
Table 1: Required Minimum Education and Average Education (percent of firms)
Figure 2. Percent of Trinidad and Tobago Graduates Employed
Source: IDB (2016)
What to do about it?
Since there is already a stock of qualified individuals, though not perfectly aligned to the skills requirements of firms, one option available to policymakers and firms is to establish programs that can retrain and retool the existing human capital stock so that they can become more relevant to the labor market and contribute to productivity growth. There are many ways one can establish training programs. One example is via apprenticeship programs. In a recent IDB publication this idea was explored to address the labor market challenges in Latin America and Caribbean. The study noted that apprenticeship type programs can boost productivity and innovation, reduce the skills mismatch and help workers gain access to a stable career ladder. Such programs should, however, be guided by 10 core elements: “(i) alignment with country development strategies, (ii) adequate governance arrangements, (iii) high levels of employer engagement, (iv) appropriate funding and incentive structures, (v) robust curriculum design, (vi) robust curriculum delivery, (vii) robust assessment methodologies that are relevant to the occupation in which the apprentice is being trained, (viii) certification and opportunities for further progression for the apprentice, (ix) suitable support in the form of apprenticeship career services for apprentices, and last but definitely not least, (x) strong quality assurance mechanisms for the delivery of the apprenticeship program, which must take into account all of the aforementioned core elements and which should be highly articulated with countries’ skills development systems overall” (Fazio, Fernández-Coto and Ripani, 2016, pg. ii). Whether apprenticeship or other types of training programs are used to address the labour market challenge, one thing is clear, there is a need for the rethinking of human capital development policies that can support the country’s long-term economic development objectives and reduce the current skills mismatch.