A country can develop its relevant skills by encouraging and enabling people to learn throughout life. This can be accomplished in several different ways.
1. Gather and use evidence about the changing skills demand to guide skills development
Investing in skills development throughout a person’s lifetime is at the heart of skills policies. During the past few decades there have been major shifts in the economic underpinnings of OECD countries and, more recently, of many emerging and developing countries too. In most countries, the labour market has moved from agriculture to industry to, increasingly, services. These changes imply a decline in the demand for craft skills and physical labour and a rise in the demand for cognitive and interpersonal skills, and for higher-level skills more generally.
As economies continue to evolve, the types of skills demanded by the labour market will necessarily change too. Government and business can work together to gather evidence about skills demand, present and future, which can then be used to develop up-to-date curricula and inform education and training systems.
2. Engage social partners in designing and delivering education and training programmes
Skills development is more effective if the world of learning and the world of work are linked. Compared to purely government-designed curricula taught exclusively in schools, learning in the workplace offers several advantages: it allows young people to develop “hard” skills on modern equipment, and “soft” skills, such as teamwork, communication and negotiation, through real-world experience. Hands-on workplace training can also help to motivate disengaged youth to stay in or re-engage with the education system and smooths the transition from education into the labour market.
Workplace training also facilitates recruitment by allowing employers and potential employees to get to know each other, while trainees contribute to the output of the training firm. Employers have an important role in training their own staff; but some, particularly small and medium-sized enterprises, might need public assistance to provide such training.
Trade unions can also help to shape education and training, protect the interests of existing workers, ensure that those in work use their skills adequately, and see that investments in training are reflected in better-quality jobs and higher salaries.
3. Ensure that education and training programmes are of high quality
Spending time in education is one thing; learning is another. The OECD’s Programme for International Student Assessment (PISA) shows that significant numbers of 15-year-olds in many countries do not acquire even a minimum level of skills through compulsory schooling.
Governments can help to foster quality in education and training from early education through school and beyond. Education and training institutions need to be governed by a clear quality-assurance framework that serves both accountability and improvement purposes, and that combines internal and external evaluation without imposing an excessive administrative burden.
Teaching must be valued as a profession so that the best candidates are recruited and the most effective teachers are retained. Workplace training should also be subject to quality control in the form of contractual arrangements, inspections and self-evaluations.
4. Promote equity by ensuring access to, and success in, quality education for all
Individuals who have low levels of skills because they do not have access to good-quality education, because they fail to succeed in education or because they do not get a second chance to improve their skills later on are much more likely to have poor labour market and social outcomes.
Yet findings from PISA show that equity and quality in education are not mutually exclusive. Investing in high-quality early childhood education and initial schooling, particularly for children from socio-economically disadvantaged backgrounds, is an efficient strategy to ensure that children start strong in their education careers so that first skills beget future skills.
Later in life, financial support targeted at disadvantaged students and schools can improve the development of skills. And since individuals with poor skills are unlikely to engage in education and training on their own initiative and tend to receive less employer-sponsored training, second-chance options can offer them a way out of the low skills/low income trap.
Remove barriers to investing in further learning
Preparing young people for their entry into the labour market with up-front education and training is only one facet of skills development; working-age adults also need to develop their skills so that they can progress in their careers, meet the changing demands of the labour market, and don’t lose the skills they have already acquired. A wide spectrum of full- or part-time adult-learning activities needs to be available: from work-related employee training, formal education for adults, second-chance courses to obtain a minimum qualification or basic literacy and numeracy skills, language training for immigrants, and labour-market training programmes for job-seekers, to learning activities for self-improvement or leisure.
To encourage people to participate, governments can provide better information about the economic benefits (including wages net of taxes, employment and productivity) and non-economic benefits (including self-esteem and increased social interaction) of adult learning; information and guidance can be provided both online and through specialised services; informal learning should be recognised with clear certifications through reliable assessments; and education and training programmes must be relevant to users and flexible in content and in how they are delivered so that adults can adapt learning to their lives.
5. Ensure that costs are shared and that tax systems do not discourage investments in learning
Employers have to create a climate that supports learning, and invest in learning; and individuals must be willing to develop their skills throughout their working life. Governments can design financial incentives and favourable tax policies that encourage individuals and employers to invest in post-compulsory education and training. For example, allowing taxpayers to deduct the cost of such education from their income taxes could help to offset the disincentives to invest in skills resulting from progressive personal income taxes.
Some countries fear that, with rising enrolment rates and the increasing cost of tertiary education, they might not be able to sustain these investments. To make investing in tertiary education more cost-effective, individuals can be encouraged to shoulder more of the financial burden and funding can be linked more closely to graduation rates.
At the same time, disadvantaged individuals should be assured access to education opportunities through grants and loans.
6. Maintain a long-term perspective on skills development, even during economic crises
In periods of depressed economic conditions and when public budgets are tight, governments tend to cut investments in human capital first. But cutting investment in skills at such times may be short-sighted, as a skilled workforce will play a crucial role in generating future jobs and growth.
If cuts to public spending have to be made, they should be based on the long-term cost/benefit ratios of alternative public investments. On these grounds, there is usually a strong case to be made for maintaining public investment in skills.