Two new short briefs in the Competitive Industries Notes series explore “The How To” and “The What and The Why” of developing practical skills for firm productivity
While the first note argues that the acquisition of practical skills is essential to firm productivity, competitiveness and ultimately, inclusive growth, the second one explores the question of delivery, pointing out that the ability to deploy practical skills is one of the indispensable elements of competitiveness.
The What and The Why
After analyzing global experiences with matching demand and supply of practical skills, and the Bank’s portfolio on skills, the author shares a number of specific conclusions.
While firm productivity appears to benefit from practical skills training, market failures persist and firms under-provide training. Evidence from global experiences in skills matching reveals that skills constraints have become more severe across countries. In addition, the bulk of public investments in this field, supported by institutions like the Bank Group, have focused largely on improving the supply side of the problem - e.g. formal TVET training in schools and certification issues.
Much less has been invested on how firms can access skills that increase their knowledge, productivity and competitiveness. In 2013, the WDR on Jobs clarified that firm-influenced training is consistently found to go hand in hand with productivity increases while TVET from public and private institutes has a mixed record.
The second note in the series explores a number of follow up questions. How can more firm-based training be encouraged? Despite market failures, how have firms, unions and public agencies navigated obstacles to deliver practical skills effectively?
The How To
The second brief analyses two factors that influence how well jobs pull practical skills and presents a number of models of cooperation to deliver practical skills.
In conclusion, the author argues that various models of cooperation - from more formalized to firm-level arrangements - appear to have navigated market failures to deliver effective practical skills. The replication of such models is however delicate because of the contextual nature of each arrangement. Yet some policy implications can already be identified and point to the need to increase interventions from the demand side. A better understanding of the firm needs and linking them to the solution design would be a practical way to move forward. Overall, the ability to deploy practical skills is one of the indispensable elements of competitiveness.