Why anticipating the need for skills helps spread benefits of trade and growth — Q&A with Con Gregg of ILO

20 April 2018

Taking a sectoral approach to skills development for tradable sectors and for their domestic supply chains is a key means to drive export growth, economic diversification and decent jobs.

This issue will be in the spotlight at the Global Commodities Forum in Geneva on 23 and 24 April.

Ahead of the event, we sat down with Con Gregg, specialist on skills needs anticipation at the International Labour Organization (ILO), to discuss a key programme developed and implemented by his organization.

Q:   How does adopting a sectoral approach to skills development contribute to productive and competitive economies?

A:   Helping enterprises find workers with the right skills, and ensuring that workers acquire the skills they need to find productive employment is a key to unlocking economic prosperity and building inclusive societies.


The Skills for Trade and Economic Diversification (STED) methodology developed and being implemented by the ILO contributes to export growth, economic diversification and decent jobs by taking a sectoral approach to skills training and development for tradable sectors and for their domestic supply chains. STED interventions frequently focus on sectors and subsectors with potential to diversify economies overly dependent on a narrow range of products.

In Cambodia, for example, while garment manufacture is peaking, it is very important to diversify exporting activity into other sectors. The fact that much of the opportunity beyond garments will rely on a good supply of mid-level and high skills and exporting companies have difficulty in hiring mid-level skills of adequate quality within Cambodia, improving TVET is therefore a development imperative for Cambodia. The ILO STED programme works with stakeholders of two target sectors (light manufacturing and food processing) in developing competency standards/curriculum for high priority occupations and piloting curricula based on these standards in a number of technical training institutions . This has helped to strengthen connection between TVET institutions and industry and ultimately to bridge a gap in mid-level skills that is slowing economic diversification.

By adopting a forward-looking perspective, a STED process anticipates a sector's development and growth opportunities based on its global competitive position and market development and the skills the sector needs to strengthen most for future success. An equally important step in the process involves analysing current skills supply and demand. Together, these steps help to identify existing and anticipated skills shortages, and plot a path to avoiding skills mismatches that hinder effective participation by the sector in trade and diversifying its products and services.

Q:   What does adopting a sectoral approach mean in terms of skills development?

A:   Companies working within the same sector usually have similar skills needs. In addition, employers' organizations, faculties or departments of educational or research institutions, development agencies and regulatory bodies also take on a sectoral focus in dealing with the needs of the industry's workforce. This means that there is usually a clear set of stakeholders that can come together at the sectoral level to address its skills requirements. Adopting sectoral approaches helps to focus attention on shared needs. It also facilitates understanding and analysis of the skills required for the successful development of a specific sector, and taking action based on the shared analysis. The STED approach aims to facilitate national and sector partners in analysing their own skills needs, to develop their capacity to do so, and to support them in developing institutional arrangements to parlay this approach into skills development governance systems.

Q:   How do sectoral approaches differ from traditional models of skills development?

A:   Sectoral approaches reinforce other good practices in skills development. In STED we aim to work with existing educational and training institutions where feasible. Therefore, rather than coming up with a completely new approach to skills development, we help turn what is already good and something better and more responsive to the skills needs of employers and workers. Where there are systemic problems in education and training provision, sectoral approaches can provide an entry point for system reform for developing solutions that can serve as pilots for improvements to the system as well as addressing the skills challenges facing the sector.

Traditionally, people considered skills development as a synonym for technical vocational education and training (TVET). Today, we need to think more broadly. We still need to take into account formal TVET, but also formal higher education and other less formal initial learning such as induction training, or traineeships that may not necessarily be connected to the TVET system. In addition to initial education and training, we also need to think about developing the existing labour force, and continuing education and training throughout a person's career.

As skills needs change, people and their employers will require different sets of skills over time. In addition to considering the supply of new entrants to the labour force with needed skills, sectoral approaches look at what must be done to develop the skills of existing workers in the sector to allow businesses to perform well, and keep people's skills updated and upgraded. To do this, the right systems must be developed within businesses and in collaboration between businesses and educational and training providers. As an example, in Jordan the ILO has worked with the pharmaceutical centre of excellence to improve training for people who are already working as operators in the workforce. The ILO has developed extra modules to add to the training course for pharmaceutical machine operators.

Q:   What are the advantages and who benefits from a sectoral approach to skills development?

A:   sectoral approach can benefit the sector itself, as well as its employees and a country's capacity to export, either directly or through connecting into global and regional supply chains. In the case of STED, a strong exporting sector can have many benefits for economic development. It can raise incomes and promote decent jobs. And it can benefit the rest of the economy by creating knowledge that can be used in other sectors to improve economic outcomes. What's more, when women and men are employed in good jobs, they can spend more, and boost economic activity. Consequently, other sectors will simultaneously develop. Therefore, it is worth focusing particularly on these sectors as points in which we can leverage improvements to have wider benefits.

Besides, there is a lot of research that shows that exporting businesses tend to pay higher salaries than their non-exporting counterparts. In our work under STED, we have several examples of employers using strategies to update and upgrade skills to perform better, improve productivity and deliver a higher quality products to succeed in markets.

In Malawi, we developed an activity called "Work Integrated Learning". This enables women and men with relevant work qualifications and skills to perform effectively in greenhouse production of horticultural products with a training programme that combines classroom learning at existing education institutions with mentored work placements. Building the capacity of farmworkers in the horticulture sector helps to improve their productivity and production practices while also enhancing their participation in the vegetable value chain.

Q:   What impact does adopting a sectoral approaches have on national skills policies?

A:   Sectoral approaches provide a way for national level policies on education and training to become more specific. Decisions made at a national level and affecting all sectors are usually too general to tackle skills needs that are specific to particular sectors, although they can be important in getting systems right and addressing core employability skills that are relevant across many sectors. However, once decisions focus on a specific sector they can be more directly practical, and provide space for improvements targeted on improving a sector's performance.

Most developed countries undertake sectoral approaches in some way. Yet how they do it depends on their own institutional structures. For other countries that do not yet have systems to foster collaboration on skills at sector level, taking a sectoral approach is important. It will enable the country and its businesses to focus on developing the specific skills needed to maintain and improve their key economic sectors, making substantial contributions to improved productivity and competitiveness.

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