Skills for Trade, Employability and Inclusive Growth. Matching skills for the future of work and regional integration in Asia and the Pacific

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1 Inter-regional Technical Forum on Skills for Trade, Employability and Inclusive Growth Matching skills for the future of work and regional integration in Asia and the Pacific Akiko Sakamoto ILO-Bangkok Siem Reap, Cambodia May 2017

2 Background ILO-KOREA TVET Forum, Oct Jobs, Skills and Strategies for the Future: Perspectives from Asia-Pacific The 16 th Asia-Pacific Regional Meeting (APRM) Special Plenary Debate: Skills for the Future

3 CONTEXT

4 Robust economic growth in developing Asia Change in real gross domestic product, p (%, annual average) 12% Note: 2016 figures are projections. Source: IMF: World Economic Outlook Database (Apr. 2016). 10% 8% 6% 4% 2% 0% -2% p

5 has lifted millions of workers out of poverty Share of workers living in extreme poverty, p (% under $1.90 per day) 70 Source: ILO: Trends Econometric Models (Geneva, Nov. 2015) Eastern Asia South-Eastern Asia Southern Asia

6 improving the quality of employment still remains a big challenge % of non-wage and vulnerable employment in total employment BRN SGP MYS MDV WSM BGD FJI PHL LKA MNG KIR THA IDN KHM VNM VUT PAK IND (2014)(2013)(2014)(2010)(2012)(2011)(2008)(2013)(2013)(2012)(2010)(2013)(2013)(2012)(2013)(2009)(2008)(2010) Male - % of non-wage/salaried employment Male - % of vulnerable employment Female - % of non-wage/salaried employment Female - % of vulnerable employment

7 income disparity rising overall Change in Gini coefficient, earliest year in 1990s and latest available year Malaysia ( ) Philippines ( ) China* ( ) Note: * denotes a worsening in the inequality indicator since the early 1990s. Source: World Bank: PovCalNet Database. Thailand ( ) Mongolia* ( ) Lao PDR* ( ) Viet Nam* ( ) Indonesia* ( ) India* ( ) Bangladesh* ( ) Earliest year Latest year Cambodia ( ) Pakistan ( ) notably in China, India and Indonesia which account for nearly 3 in 4 of the region s population

8 and spatial inequalities persist Urban and rural poverty rate, latest available year (% below national poverty line) 40 Source: World Bank: World Development Indicators (2016). 35 Urban Rural Malaysia China Indonesia Thailand Cambodia Viet Nam India Lao PDR Bangladesh Mongolia between rural and urban areas but also between regions

9 and wage gaps between women and men Male-female gap in wages, 2013 or latest available year (%) 120 Source: ILO: Wages in Asia and the Pacific: Dynamic but uneven progress (Bangkok, 2014) Average wage of men (Index = 100) Average wage of women relative to men's wages

10 SKILLS FOR THE FUTURE in ASIA & PACIFIC KEY DRIVERS SHAPING THE FUTURE OF WORK Demographic change Technology Inter & Intra regional integration Climate change & environmental sustainability Key on-going characteristics: large informality & rural economy

11 Key Drivers of Change and Emerging Skills Needs Demographic change Dual trends: Aging economies and young economies Increased demands for heath care and care occupations Greater importance of lifelong learning, skills upgrading or reskilling for mature workers Need to equip young job seekers with relevant competencies Importance of quality basic education and/or core work skills

12 Key Drivers of Change and Emerging Skills Needs Technological change While technology helps job creation, growing concern of negative impact on jobs Likely to negatively impact on low-skilled occupations, women and those with limited education Increased demand for retraining and skills upgrading Increased demand for middle-higher skills, STEM and core work skills including ability to learn The impact of technology on jobs varies considerably

13 VIET NAM THAILAND PHILIPPINES INDONESIA CAMBODIA Key Manufacturing Sectors at High Employment Risk of Automation ALL MANUFACTURING 86% FOOD AND BEVERAGES 70% GARMENTS 88% ALL MANUFACTURING 56% FOOD AND BEVERAGES 44% GARMENTS COMPUTERS MOTOR VEHICLES 64% 63% 60% ALL MANUFACTURING 54% FOOD AND BEVERAGES 37% GARMENTS 69% COMPUTERS 81% ALL MANUFACTURING 67% FOOD AND BEVERAGES 58% GARMENTS 79% COMPUTERS MOTOR VEHICLES ALL MANUFACTURING 74% 73% 75% FOOD AND BEVERAGES 67% GARMENTS 86% COMPUTERS 75% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: Chang and Huynh (2016) ASEAN in Transformation: Future of jobs at risk of automation, ILO

14 VIET NAM THAILAND PHILIPPINES INDONESIA CAMBODIA Key Service Sectors at High Employment Risk of Automation ALL SERVICES RETAIL TRADE HOTELS BANKING ALL SERVICES RETAIL TRADE HOTELS BANKING ALL SERVICES BPO/CALL CENTRE RETAIL TRADE HOTELS BANKING ALL SERVICES RETAIL TRADE HOTELS BANKING ALL SERVICES RETAIL TRADE HOTELS BANKING 33% 32% 40% 44% 42% 39% 45% 41% 43% 57% 71% 66% 62% 75% 70% 67% 68% 69% 85% 89% 88% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

15 3.5 Women and less educated workers more likely to be at high employment risk Women relative to men Youth relative to adults Primary education relative to Primary education relative to secondary post-secondary Cambodia Indonesia Philippines Thailand Viet Nam Source: Chang and Huynh (2016) ASEAN in Transformation: Future of jobs at risk of automation, ILO

16 SKILLS PROFILES

17 Labour force by educational attainment Education level of the workforce in the region varies considerably More than 30% of the workforce without primary education (Cambodia, India and Pakistan,). At least 30% of the workforce with tertiary education (high income countries in the region) Considerable share (over 60%) of the workforce has less than secondary education Cambodia, India, Indonesia, Thailand, Pakistan, Sri Lanka

18 Skills mismatch (over/under-skilled) Significant skills mismatch exists in the region Less than half (45-48%) of employed persons had a matching qualifications for their occupations More under-skilled mismatches (51% in India, 45% in Cambodia and Thailand 44%), less over-skilled mismatch

19 Skills mismatch (over/under-qualified) Trends (2005- latest available data): Incidence of over-qualification is increasing in low and middle-skilled occupations, except Mongolia and Indonesia For middle- and high-skilled occupations, the incidence of under-qualified workers is in decline in general Expected skills shortages: high-skills in India, Indonesia, Pakistan, lesser extent in Cambodia, Mongolia, Thailand, Timor Leste; semi-skilled workers for most countries Source: Bhulaor and Matsumoto (forthcoming), Skills mismatch and shortages in Asia and the Pacific, ILO Regional Office for Asia and the Pacific

20 SKILLS RESPONSES

21 Key areas of skills responses Anticipating future skills needs Improving relevance and responsiveness to meet labour market needs Greater engagement of industry, and better integration of training and the world of work Broadening access to TVET, and lifelong learning opportunities flexible delivery, community-based training, informal apprenticeships, recognition of prior learning

22 Additional suggestions from APRM debate on skills for the future Skills systems need to: Broaden the scope of careers through core work skills, clustering of skills and lifelong learning approach Be in sync with actual demands of skills in the business strategy, now and in the future Be part of the creation of more rewarding and productive jobs (that require more high skills and have high value-added content) for building an inclusive future Step up efforts for public-private partnerships (PPPs) Improve the status of vocational technical training

23 THANK YOU Siem Reap, May

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