The Chicken and the Egg; Workforce Development and Economic Competitiveness

Erik Payne ButlerHuman Investment Institute

E&E BureauRegional Competitiveness Conference

Kiev, UkraineJune, 2009

Universal Themes in Workforce Development

Supply and Demand Dynamics-- employers need workers

-- people need skills -- communities/labor markets need the

match to work Equity, access and cost – skills,

competencies and systems Mutual dissatisfaction, no matter the

economy The BIG Questions about 25 year-olds

The Conventional View of The Factors of Competitiveness

Enablers

Finance

Human Resources

Infrastructure

Incentives

Enterprisesfarms, manufacturers, and service providers of all

types & sizes: micro, small, medium, large

Growth in Productivity, Output, & Incomes

DriversMicro Policies & Governance

property rights, enforcement of

contracts / rule of law, economy-wide and sector-specific

policies & regulations, trade

policies . . .

Macro Policies &

Governancetaxation, budget

formulation & execution, deficit control, monetary policy, exchange

rates . . .

Incentives Inputs

Impact

Common (though not universal) themes in the Region

Young populations High basic literacy Relatively small formal employment

sector Large (though differentiated) grey

economy Rigid/traditional educational systems Little practical experience offered Europe a looming presence

Insights from Recent Assessments

Two Assessments in 2009: Macedonia and Kosovo

“Taking Steps toward a 21st Century Workforce in Macedonia”

“A Modern Workforce Development System is Key to Kosovo’s Growth”

Common themes from Macedonia and Kosovo

Age matters Poverty is symptom and cause of failures Projecting labor supply and demand is an uneven

art, and not yet a science Grey market inhibits developing a formal workforce

development system Where demand is weak, supply also lags behind Education matters Universal criticism of the lack of practical education

and soft skills

Age matters: Kosovo and Macedonia

Age still matters: Albania and Bulgaria

Poverty snapshot: cause and symptom

2008 Per Capita / GDP (PPP) in billions

Source: CIA World Factbook (2008)

*Estimate **Large informal sector

Kosovo $2,300* $5.00**

Albania $6,400 $23.07**

Bosnia and Herzegovina

$6,600 $30.49**

Serbia $8,200 $83.14

Macedonia $9,200 $18.97**

Montenegro $10,600 $7.16

Croatia $16,900 $75.93

Facts, perceptions and predictions

Demand/supply interplay: demand low = supply systems complacent

Projecting supply and demand: the skills gap analysis opportunity

The “grey market”: livelihood reality or inhibiting factor

Education: resource or drag Adapting the three big questions

The three big questions for 25 year-olds

CAN YOU READ

DID YOU GRADUATE

HAVE YOU WORKED

The three big (Workforce) questions for firms and sectors?

Can you grow (modernize) with existing skill profiles?

Do you have a pipeline of skilled workers?

How and when will your skill needs change over time?

Supply, Demand, and the beginnings of systems in Macedonia and Kosovo: Recommendations

from the assessments

Recommendation (Beneficiary) categories

Future workers The presently unemployed Employed but under-skilled Policy and system improvement Capacity-building

Macedonia Recommendations

One Stop career centers

Municipal “supply-side” model-building

Supporting entrepreneurship and enterprise development

The Green Jobs Corps program

The Rising Generation Initiative

Kosovo Recommendations Public-private oversight for system development

Annual Skills Gap Survey of Kosovo employers

Municipally-based Career Learning Centers,

Skills training and certification for unemployed and underemployed beneficiaries

Entrepreneurship training and business growth;