Skills: The global currency of the 21st century
Authors: Andreas Schleicher
23 May 2012
Skills transform lives and drive economies. Without the right skills, people are kept on the margins of society, technological progress does not translate into economic growth, and countries can’t compete in today’s economies. But the toxic co-existence of unemployed graduates and employers who say that they cannot find the people with the skills they need, shows that skills don't automatically translate into better economic and social outcomes. With this in mind, the OECD has put together a strategy that aims to help countries transform skills into better jobs and better lives.
It all starts with building the right skills. Anticipating the evolution of the demand for labour is the essential starting point. We then need to improve the quality of learning outcomes, by putting a premium on skills-oriented learning throughout life instead of qualifications-focused education upfront. That’s about fostering relevant learning. Skills development is far 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 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 education and smooth the transition to work. Data from our new Adult Skills Survey (PIAAC) provides powerful evidence of that. While you learn when you are in education between the ages of 16 and 25, the learning curve is even steeper if you combine education with work.
All of this is everybody’s business; and we need to deal with the tough question of who should pay for what, when and how, particularly for learning beyond school. Social partners can help in developing curricula that include broader, transferable skills and ensuring that good quality training is available to all. Employers can do a lot more to create and invest in a climate that supports learning. Some individuals can shoulder more of the financial burden. And governments can do a lot to design rigorous standards, provide financial incentives and create a safety net so that all people have access to high quality learning.
But even the best skills simply evaporate if they aren’t maintained and upgraded to meet the changing needs of societies. There are people who are highly skilled who have decided not to work. Why? They may be too busy caring for children or elderly parents; they may have health problems; or they may have calculated that it just doesn’t pay to work. The answer is that we need to make better use of our talent pool.
Equally important, we need to ensure that skills are used effectively at work. OECD data shows the link between how skills are used on the job and people’s earnings prospects and productivity. If you have great skills and have a demanding job, you’re fine, and your earnings continue to increase. If you don't yet have the skills but your job is demanding, you’ll see progress too. But if your employer does not use your skills, the earnings over your lifetime tend to deteriorate.
So what can we do about this? Quality career guidance is essential. People who have the latest labour market information can help steer individuals to the education or training that would best prepare them for their prospective careers. Helping young people to gain a foothold in the labour market is fundamental too. Vocational training is a very effective way to achieve this. Coherent and easy-to-understand qualifications help employers identify potential employees who are suitable for the jobs they offer. And reducing the costs of moving within a country can help employees to find the jobs that match their skills and help employers to find the skills that match their jobs.
There may be young people just starting out who are well educated but have trouble finding jobs that put their education and training to good use. What most people don’t realise is that we can shape the demand for skills. Often we think that the demand for skills is as it is, and we just need to educate people to meet existing demand. That is a big mistake. There is much that governments and employers can to do promote knowledge-intensive industries and jobs that require high-skilled workers. Adding these kinds of high value-added jobs to a labour market helps to get more people working — and for better pay.
Last but not least, education that fosters entrepreneurship can help create jobs. Indeed, education is where entrepreneurship is often born.
In short, we’re all in this together – and there’s a lot more that we all can do to develop the right skills and turn them into better jobs and better lives.
Andreas Schleicher is Special Advisor to the OECD Secretary General and Co-ordinator of the OECD Skills Strategy. www.oecd.org/
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