Skills for Trade and Economic Diversification Description

Summary description of the ILO's Skills for Trade and Economic Diversification (STED) tool

Project outline | 23 January 2012
STED is a strategic tool developed by the ILO that provides guidance for the integration of skills development in sectoral policies. It is designed to support growth and decent employment creation in sectors that have the potential to increase exports and to contribute to economic diversification.

Contributes to higher exports, economic diversification and more and better jobs

  • Lack of adequately trained labour is a major supply side constraint, reducing the competitiveness of companies in developing countries and hindering development of new export sectors
  • Successful exporting requires specific skills such as foreign languages and knowledge of international practices and standards
  • Availability of well trained labour is a pull-factor for Foreign Direct Investment increases a country’s ability to absorb new technology
  • Globalization and technological change continue to increase the demand for skills and adaptation of workers to new challenges through life-long learning

Helps policymakers to ensure that firms find workers with the right skills and workers acquire the skills needed to find productive employment

  • Having the right skills makes workers more likely to benefit from the opportunities of international trade and less likely to be affected negatively by it
  • The importance of skills policies to cope with globalization is widely recognized, but implementing them well is very difficult, especially in sectors exposed to trade that undergo rapid structural change. Skills mismatch – a situation where the skills that workers acquire do not match what firms are looking for – is frequent.
  • Investing in skills requires commitment from governments, employers, and workers and social dialogue is indispensable in order to ‘get it right’. STED facilitates social dialogue on skills and competiveness, building on ILO’s tripartite structure.