Committee on Employment and Social Policy
FIRST ITEM ON THE AGENDA
World Employment Report 1998-99: Employability
in the global economy -- How training matters
(b) Implications for ILO activities
1. This report covers a field in which there is a long history of ILO research, technical cooperation and policy advice. But it is a field which is changing rapidly. As the report makes clear, skills and capabilities are becoming ever more important in competitiveness, growth and the creation of employment. But the types of skills in demand are changing, as are the respective roles of education, training and lifelong learning. Training systems must respond to new imperatives, and in particular must offer flexible, demand-driven ways of acquiring skills and capabilities that contribute to productivity growth and are recognized and valued in the labour market. The ILO's constituents are key actors in this process, and the ILO must adapt its programme to respond to their needs in the changing economic and social context.
2. The ILO is now in a position to build on the work undertaken for the World Employment Report (WER) to develop its capabilities in several areas, and to inform and strengthen its advisory services delivered to constituents through the MDTs. In particular, the ILO would be able to promote the integration of training and employment policies more effectively, which as the report clearly shows are highly complementary; to systematically accumulate information on practical experience that can provide reference points for policy; to support debate within the ILO constituency on the priorities for human resources development; and to demonstrate, in concrete situations, how activities to foster training contribute to the broader ILO goals of employment promotion and social justice.
3. The report shows that it is important not to confine action to training alone, but to take a broader perspective on human resources development. This vision is already reflected in the programme for the International Labour Conference in the year 2000, which includes a major item for general discussion on human resources development and training.
4. In preparation for that discussion, the ILO is preparing a background report that addresses the priorities for human resource policies, with particular reference to the roles and objectives of governments, workers and employers. Using the conclusions of the WER as a reference point, the report will identify specific and practical challenges for ILO constituents. In particular, it will look in greater depth at ways in which the challenges differ from one region to another, and for this purpose regional tripartite consultative meetings are proposed during the preparation of the report in 1999. It will also look in detail at possible partnerships between different actors -- unions, enterprises, different levels of government, and private and non-governmental actors. In so doing, it will take advantage of past and current ILO work on partnerships and social dialogue, work which is also reflected in the WER. The document will examine the existing international instruments in the human resources development field and their possible improvement, and the Conference in the year 2000 may wish to consider whether, in the light of changes in the international and economic context since this question was last addressed, a new ILO instrument -- perhaps a new or revised Recommendation -- might be desirable.
5. Another aspect of this broader vision is the linkage between training and education, aimed both at personal development and at enhancing workers' capabilities. As economies and societies are increasingly built around information and knowledge, both training and education can be seen as particular facets of learning, encompassing school, society and the workplace. The ILO may wish to develop further its collaboration with UNESCO, and perhaps with other international organizations working intensively in this field such as the OECD, to develop consistent policy approaches.
6. The report highlights the challenges faced by training systems and their need to become both more adaptable and more responsive to the demands of enterprises. Perhaps the greatest challenge is to develop training systems so that they can better handle the need for continuous upgrading of skills, both of those in work and of the unemployed and those out of the labour market. This may require both the acquisition of broader competencies in pre-employment training and the development of new institutional frameworks to support lifelong learning. It calls for training systems that are much closer to enterprises, both to anticipate their needs and to provide labour market access for their trainees. This is not only a question of meeting specific skill demands, but also one of flexibility, for instance based on modular, competency-based training systems that can be adapted to changing situations in firms and labour markets. An increasing variety of both public and private providers participates in such systems, implying the need to develop new frameworks to promote and regulate training in the interests of transparency and quality.
7. Given the common interest of governments, employers and workers in many of these issues, the ILO is well placed to promote debate and dialogue between the social partners over the institutional changes that are needed. It should be in a position to offer technical advisory services in this area on methods of training system reform, compiling information on practical experience and extracting the major lessons for constituents.
8. A related issue concerns changes in the needs for skills. As the report shows, traditional occupational skills are no longer enough, because workers have to be able to move from workplace to workplace without loss of recognition of their acquired human capital, and if necessary from one job specialization to another. Workplace-based skills, acquired from experience, are often as important as those derived from formal qualifications. The ways in which these skills are recognized and certified is crucial, and the value of competency-based systems of skill recognition is increasingly understood. The ILO has a potentially important role in the development of these standards, not at a detailed level, but in establishing frameworks and procedures in line with its basic principles and in the interests of both workers and enterprises. This can be particularly relevant as part of a process of regional integration. One of the proposals for action programmes submitted to the Governing Body for the Programme and Budget for 2000-01 addresses this issue, with particular reference to Asia.
9. The ILO needs to be concerned with the changing roles of skills and competencies at the enterprise level. As the report shows, globalizing production systems generate new technological and organizational patterns, which have implications for employment creation and the skill level and quality of the jobs concerned. The skill strategies of enterprises in response to these forces affect not only productivity and competitiveness, but also the quality of jobs and the possibilities for career development. Skill improvement offers a possible means to promote the adaptability of enterprises without undermining employment security, but implies costs and requires consensus building and mutual confidence between the different actors involved. It is important for the ILO to systematically compile information on the options chosen and their effects, identifying instances of good practice, with a view to developing its ability to provide technical advisory and information services to constituents in this field.
10. A major concern highlighted in the report is the concentration of training in larger enterprises of the formal labour market. In smaller enterprises and the informal sector, a considerable training deficit is observed, although these are the enterprises where most new jobs are created. At the same time, the growing numbers of workers in various categories of unstable or part-time employment also have much less access to training than regular workers. There is scope for the ILO to invest greater efforts in resolving this paradox. First, more information is required on the benefit derived from training in different types of enterprises, and for different categories of workers within enterprises. It will be important to identify the constraints that hinder investment in training and to evaluate different experiences in trying to overcome them. Secondly, the report highlights the importance of developing training systems adapted to the needs of the informal sector, for example, with strong links to basic education, or taking advantage of commercial relationships between small firms and large to promote transfers of skills between them. In the informal sector, there is often a need to tackle managerial and technical skill deficiencies together. These are areas where the ILO's technical advisory services can be reinforced.
11. The report points to a number of crucial aspects of access to training: as training becomes more important as a source of success, so lack of access to training becomes more important as a source of failure; there are widespread signs of labour-market fragmentation, with an increase in unstable jobs which offer less opportunities for training; inadequate access to training is an important aspect of gender inequality, so that skill strategies are important in promoting equality of opportunity for women; particular labour market groups, such as older workers and the disabled, are vulnerable to exclusion, and access to training is vital for them to maintain access to labour market opportunities.
12. This is an area where it is important for the ILO to document existing injustices and inadequacies, to systematically collect information on policies and practices that have successfully promoted equitable access to training, and to demonstrate how training can be an effective tool -- in combination with other policy measures -- to promote social inclusion. One area on which more information might be collected concerns differences in the benefit derived from training for different groups -- for instance, documenting whether and why women receive less benefit than men, and whether this lies in the training systems themselves or in women's access to the labour market. The report highlights the need for the ILO to promote training as an important instrument to reduce gender inequalities and overcome discrimination, and offers a number of specific ideas as to how this can be done. It would be important to link such activities with enhanced vocational information and guidance.
13. A second contribution that the ILO might offer in this field is to develop the potential of training policies as a means to promote social inclusion for groups that would otherwise be vulnerable to exclusion. Skills and capabilities are central to any strategy to provide new access routes for the excluded. In particular, training can be an important part of a package of complementary policies which together provide an integrated approach to overcoming poverty and exclusion. An action programme on this issue (skills for social and economic inclusion) is included among those proposed to the Governing Body in the Programme and Budget for 2000-01.
14. The report highlights the difficult problems faced by workers displaced in the process of economic restructuring, and this is high on many governments' agenda. While training alone is rarely the solution, training programmes are an essential complement to policies aimed at helping displaced workers back into the labour market. Such issues are currently of high priority through much of Asia. The ILO could devote more attention to evaluations of packages of policies for displaced workers, and to assessing the effectiveness of training as one element in such packages. It would be particularly interesting to compile information on experience in this field, and to develop methods of linking training, other labour market policies, employment services and income support within an integrated framework. An action programme in this area is among those proposed for the Programme and Budget for 2000-01.
15. The report argues strongly that the incentives for training are too weak compared with its importance. This is a field in which there are many external factors and benefits from training that are not captured by the firms or individuals who invest in it. In the past, in many countries the State stepped in to fill the gaps left by inadequate incentives, but while the State continues to play an important role, it is now widely believed that the most efficient solutions involve the participation of a wide range of public and private actors. This requires an appropriate environment in terms of incentives and regulation. It also requires much more sophisticated policy management, with public resources concentrated where they have most effect, but with systems of training delivery and financing designed to try to compensate for the many market failures in this area. The manifestations of this problem are different for pre-employment and continuing training, but similar issues arise in both cases. Since the ILO's constituents are all important actors in this domain, it is important for the ILO to take a lead in exploring these issues, documenting interesting practice and providing orientations and technical support.
16. The report highlights the need for fresh thinking about the role training plays for young people. Vocational qualifications are increasingly seen as best set within a broader educational process. At the same time, the widespread difficulties that young people face in obtaining access to the labour market show how important it is to ensure that they acquire skills and work experience with market value. In this respect, the report notes the importance of improving apprenticeship systems, both in modern, post-industrial societies, and in the traditional informal sector, with a view to ensuring that on-the-job experience is acquired as part of a learning process. There is scope for the ILO to engage in a much more systematic assessment of the wide variety of experiences of this type, and particularly to identify the conditions in which the linkage between training systems and enterprises provides effective access to the labour market for young people. In the action programme on youth employment to be included in the Programme and Budget for 2000-01, one of the activities proposed is a systematic assessment of apprenticeship in its various forms, notably with respect to its effectiveness as a path to employment.
17. This is part of a broader concern with the transition from school to work. If changes in the production system call for more flexible skills, this needs to be reflected in education systems, whether vocational or academic. Where training forms part of a strategy to overcome poverty or support informal sector development, strong linkages with schools are essential. Vocational guidance and counselling is a vital element of this process. As noted above, it may be desirable for the ILO to develop common approaches with UNESCO and other bodies concerned with education in order to ensure that these issues are adequately reflected in technical advisory services.
18. One clear conclusion of the report is the surprising poverty of information on training at the international and often at the national level. Systematic information of even the most elementary variety (e.g. the number of workers who receive training in a particular time period) is not widely available. Follow-up information on the results of training in terms of labour market access or productivity is even less common. For the development of policy in this area, this is a serious deficiency. Part of the problem lies in the wide variety of activities encompassed by the word training, and there is a need for efforts to identify what types of training should be measured and what aspects are relevant. Advantage should be taken of work in this field in a number of national and international agencies, such as the OECD, but an approach which is valid at the global level is also required. This suggests a potentially important role for the ILO. Such work might result in the development of a database, which could extend existing ILO databases such as that produced by the existing Key Indicators of the Labour Market (KILM) project.
Geneva, 2 October 1998.