New technologies are rapidly changing the skills and abilities that are required in the workplace. By 2020, it is estimated that a quarter of the global workforce will have to look for a new job or radically expand their profiles to include digital and foundational skills. In the Caribbean, this challenge is pressing because some of the key sectors in economies like Jamaica and Trinidad and Tobago (e.g. knowledge and business process outsourcing) are increasingly incorporating and relying on technology for their business processes. This means that workers in these sectors will need to update their skills on a regular basis as technology evolves. In this context, competitive funds and sector skills councils can be innovative options to increase employers’ participation in the skills development process and keep training relevant to the evolving business needs. What do these initiatives have in common? How can they support the labor market in the future of work?
Business leadership for the development of relevant skills
Promoting greater participation of employers in the education and training system, competitive funds are an innovative tool in the field of skills development. A key element of this mechanism is its competitive format, as employers must submit training proposals to compete for government resources. Often, companies are required to co-finance part of the training plan (which increases their participation and commitment and potentially makes their investment more efficient). Also, in general, competitive funds invite employers to submit their proposals together with training providers, thus promoting greater quality and innovation in the training plan. Having the private sector actively participate in the design of the content and format of the training ensures relevance, and the competitive format is a more transparent way of distributing public financing.
Industry organizations can be an effective tool to ensure that resource distribution through competitive funds responds to the needs of the private sector. In particular, sector skills councils (SSCs) promote industry leadership and drive the creation of training regulations and occupational profiles. In addition, they facilitate the standardization of training and certification. These organizations are present in some of the most successful skill systems in the world, such as Australia’s and Germany’s. In this way, sector skills councils can become content curators when it comes to prioritizing which training plans are best suited to the needs of the private sector.
When can competitive funds be useful?
In the context of automation, the creation of internal capacities in companies is one of the success factors for promoting quality jobs. The challenge for employers (and for society, more broadly speaking) is to ensure that automation promotes better jobs, which will require new skills. Consider for example the manufacturing sector. The World Economic Forum and McKinsey coined the term lighthouse manufacturers to refer to those factories that have managed to scale the implementation of new technologies to achieve financial and operational benefits. Although technological adoption had the potential to eliminate many jobs in their factories, these companies have been able to retain many of their workers by transforming the nature of their jobs and training them in new skills. The lighthouses are demonstrating that technology adoption can drive a new wave of global economic growth that, in turn, can help create a better and cleaner world.
The lighthouse manufacturers phenomenon is also happening in many other sectors, as is the case of agriculture and medicine. Gradually, technology is gaining new spaces. In this scenario, competitive funds could facilitate investment in capacity building and lifelong learning, promoting the joint work of the public and private sectors to prepare the workforce for the future of work.
Competitive funds and sector skills councils in action
In Latin America and the Caribbean, countries such as Jamaica have established competitive funds supervised by a sector skills council to ensure efficient distribution of resources towards high quality proposals that truly meet the needs of the industry. In this way, the private sector participates at a strategic level (through the sector skills council) and at the company level (by designing training proposals and working together with training providers that meet industry standards). To further develop these mechanisms in the region, the first step is to foster a collaborative environment where industry and key government stakeholders can work together towards a common goal, such as training present and future workers to maximize the benefits of technology and automation
The following video explains how competitive funds and sector skills councils can help close the skills gap in the Fourth Industrial Revolution: