TVET REFORM PROJECT DISCUSSION PAPER

INDUSTRY SKILLS COUNCILS

July 2010

This paper sets out a rationale and proposal for the establishment of a network of Industry Skills Councils (ISC) in Bangladesh.¹

The establishment of a network of ISC was first proposed in the 2008 Action Plan of the National Skills Development Council (NSDC) which called for the ‘establishment of industry led, sector based and agricultural public-private skills development working groups with government as facilitator and incentiviser’. This proposal reflects ongoing international interest in the mechanisms by which industry provide input into technical and vocational education and training systems (TVET).

In Bangladesh, the initial NSDC recommendation for a network of industry skills working groups was further refined through the development of the draft National Skills Development Policy prepared during 2009 and finalized by the government in 2010. In the section dealing with a strengthend role for industry in skills development, the national policy recommends that:

“industry should be organized on sectoral lines to provide specific advice on occupations and skills in demand, and to identify key skills project priorities for their sector. Government and industry will implement these arrangements through a network of tripartite Industry Skill Councils (ISCs).”(ILO, 2009, p. 17)

This recommendation, and the proposed terms of reference for ISC, drew on the experience of the TVET Reform Project, which since 2008, established and provided operational support to ISC in four priority industry sectors:

1. Leather & Leather Goods;

2. Agro-Food Processing;

3. Information Technology (IT); and

4. Transport Equipment.

These ISC were established as tripartite committees, involving representatives from employers, workers and government. They have endorsed a terms of reference to guide their operation (see Annexure 1) and have become active to varying degrees in the activities of the TVET Reform Project.

The development of a network of ISC type bodies has also been progressed through the Skills Development Project. Whilst initially identified in project documents as Sector Working Committees (SWC), a further three industry skills bodies have been established with the same terms of reference developed by the TVET Reform Project. It is expected that once these SWC are fully operational they will also be named as ISC. These ISC are being established in the three priority sectors for the Skills Development Project, namely:

5. Building & Construction;

6. Light Engineering; and

7. Ready Made Garments (RMG).

On the basis of these two major TVET projects, seven ISC have been established. The four ISC established by the TVET Reform Project have been operating with varying success since late 2008. Of those, the two more successful ISC have grown to include the major industry associations in their sector and include representatives of key government agencies involved in skills development. Both the more successful ISC have also been formally established under the corporations law by incorporation in new industry centres of excellence which have been established in both the Leather and Agro-Food Processing sectors.Of the less successful ISC, Transport Equipment has struggled to secure key industry representatives and develop a clear action agenda, perhaps due to the limited alignment with recognized industry groupings and supply chain arrangements. The IT ISC has also not been particularly active, perhaps due to the limited role of TVET in that sector. Of the three ISC being established through the Skills Development Project, it is too early to report on the success or effectiveness of these bodies as they are still in the formative stage.

Despite the mixed success of the first industry skills councils, the ISC concept remains of interest to industry more broadly in Bangladesh, with clear and significant support shown by key industry bodies, including the Bangladesh Employers Federation (BEF) and the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI).

However, any review of these first ISC, or the establishment of further ISC, should be guided by a clear policy on how many ISC should operate and which industry sectors they will be responsible for.

In Bangladesh, as in other countries where similar industry skills bodies are operating, ISC should by definition cover all sectors of business activity including agriculture, services and what has traditionally been known as ‘industry’ in Bangladesh, sectors such as manufacturing, construction, mining and power.It should also be noted that in Bangladesh, ISC scope will include both the formal and informal economies.

It is worth noting however, that the public sector, which accounts for more than 2% of the workforce, does not need to be explicitly accounted for in an ISC network due to the existence of the National Training Council (NTC), which fulfills the role of an ISC for the public sector workforce only. For the private sector however, clear policy on the number and scope of ISC should be agreed by government and industry.

Whilst the Bangladesh Standard Industrial Classification system (BSIC) is a useful framework to clarify ISC scope, the contribution of different industry sectors to the Bangladesh economy in terms of employment, export performance and contribution to GDP should also be considered.

In 2008-09 the major export sectors were:

RMG (41.4%);

Knitwear (38.2%);

Frozen Foods (3.0%);

Jute & Jute Goods (2.3%);

Home Textiles (2.1%); and

Leather Goods (1.2%).(MCCI, 2009)

For the same period, major contributors to GDP were:

Agriculture (20.2%);

Manufacturing (17.8%);

Wholesale & Retail (14.4%);

Transport Storage & Communication (10.8%); and

Building & Construction (9.2%).(MCCI, 2009)

Agriculture, Forestry & Fisheries (22.8%);

Trade, Hotel & Restaurant (7.8%);

Manufacturing (5.2%);

Transport Storage & Communication (4.0%); and

Community & Personal Services (2.6%); and

Building & Construction (1.5%).(BBS, 2008)

Whilst a direct comparison between sectors using these indicators is difficult given the predominance of a limited number of manufacturing sectors in export performance and the use of different industry groupings, the data remains informative for the purpose of determining ISC scope. However, the number and scope of ISC also needs to take account of available resources to support ISC operations, the capacity for government to interact with multiple industry bodies and the existing patterns of industry representation in Bangladesh.

Given the above, Table 1 below outlines how each industry and economic sector can be covered through a network of ISC. The proposed network takes into account the data presented above and reflects groupings of industries with some common features eg: manufacturing. BSIC codes are used to provide a clear indication of the different industry sub-sectors that would be covered by each ISC.

It should be noted that as is the case in other countries with ISC type bodies, representation from seemingly diverse industry sectors can be managed through the use of sector specific sub-committees.

The proposed groupings also presumes cooperation between ISC where specific occupations in one industry will involve some skills and competencies relevant to other industry sectors.

¹ Throughout this paper, the term industry refers to all sectors of business activity including agriculture, services and what has traditionally been called industry in Bangladesh, the sectors of manufacturing, construction, mining and power.