The Chicken and the Egg: Workforce Development for Economic Competitiveness

1. The Chicken and the Egg; Workforce Development and Economic CompetitivenessErik Payne Butler Human Investment Institute E&E Bureau Regional Competitiveness Conference Kiev, Ukraine June, 2009

2. 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

3. Drivers Enablers Micro Policies & Governance property rights, enforcement of contracts / rule of law, economy-wide and sector-specific policies & regulations, trade policies . . . Macro Policies & Governance taxation, budget formulation & execution, deficit control, monetary policy, exchange rates . . . Infrastructure Finance Human Resources The Conventional View of The Factors of Competitiveness Incentives Inputs Incentives Enterprises farms, manufacturers, and service providers of all types & sizes: micro, small, medium, large Impact Growth in Productivity, Output, & Incomes

4. 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

5. 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”

6. 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

7. Age matters: Kosovo and Macedonia

8. Age still matters: Albania and Bulgaria

9. Poverty snapshot: cause and symptom 2008 Per Capita / GDP (PPP) in billions Source:CIA World Factbook (2008) *Estimate **Large informal sector

10. 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

11. The three big questions for 25 year-olds • CAN YOU READ • DID YOU GRADUATE • HAVE YOU WORKED

12. 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?

13. 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

14. 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

15. 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;