Western Balkans Regional Competitiveness Initiative (RCI) Regional Conference – New Skills for New Jobs in the Western Balkans Sarajevo, 12 July 2012

Regional Competitiveness Initiative – an overview Objectives: Support medium and long-term competitiveness Provide capacity building through pilot projects Transfer of lessons learned through regional working groups Focus Areas: Human capital development – address major skills gaps Innovation – strengthen innovative capacities of the private sector Duration: 2010-2013 Beneficiaries: Seven Western Balkan economies

Focus Area: Human Capital Development How is Human Capital being addressed in the RCI? 1. RCI Working Group on Human Capital Development 2. Pilot projects in WB economies

RCI Working Group on Human Capital Development Overall objective: address skills gaps in the beneficiaries by: Providing effective analytical and policy management tools; Identifying medium and long-term policy options; and Stimulating social dialogue between academia, government structures and industry.

1st Working Group on Human Capital Development “Supporting Skills For Innovation in the Western Balkans” held on 8 June 2011 in Split. Outcome: Identification of lessons learned from various donor projects to sustain and mainstream actions minimizing skills gaps, such as: 1) Intergovernmental co-ordination between ministries is a must if projects are to be mainstreamed; 2) Regional approaches are needed for measuring skills needs and developing responses; 3) Increase involvement of private sector and entrepreneurs in the development of policy responses; 4) Alignment of the National qualification frameworks with European qualification frameworks; 5) Entrepreneurial training needs to be based on the practical experience of those teaching entrepreneurship; 6) Better co-ordination between international donors is needed; 7) Innovation has to happen in enterprises (not just universities) and result in value creation; 8) Innovation means a readiness for change and this is a significant obstacle for many firms in the region.

2nd Working Group on Human Capital Development “Skills gaps analysis in the Western Balkans: design, implementation and policy responses” held on 20-21 March 2012 in Paris. Interactive capacity building Workshop Sessions: 1. Designing a skills gap analysis 2. New approaches to skills gap measurement 3. Future skills planning 4. Policy responses to skills gaps

Session 1: Designing a skills gap analysis Before designing policy responses to skills gaps an economy must understand the strengths and weaknesses of its human resources. Once these strengths and weaknesses are known one can begin to orient policy to bridge skills gaps. Typical cases of skills gaps: inadequate number of workers with adequate skills; adequate number of persons with “wrong” skills; spatial distribution of skills does not meet the needs of the labour market.

Session 2: New approaches to skills gap measurement The Working Group examined a new methodology to measure skills gaps based on an analysis of the demand and supply of skills in a defined skill sector. A skill sector is a group of homogenous occupations and related skills: the simplest and most complex are captured in this concept. If we understand the demand for skill sector skills we will understand the total demand for skills within an area in the whole economy.

Session 3: Future Skills Planning The Working Group also reviewed different types of skills planning techniques, such as forecasting and foresight, and discussed their benefits and limitations of each: Forecasting can provide some insight in terms of short-term needs, however, it is an unreliable tool for long-term planning. Skills foresight is an exercise in visualising future scenarios and then prepare adequate policy responses. Foresight requires a blend of qualitative, quantitative, and sector research; and relevant expert knowledge in order to understand the interconnectedness of several areas, such as the labour market, the education system, and regional developments.

Session 4: Policy responses to skills gaps Necessity of bottom-up planning approach (from local level to supra-national level); Due to the complexity of skills issues, it is important to integrate multiple policy responses (e.g. regional policies, education policies and employment policy). Integrated policy development should be included in all steps of the policy development cycle; Key planning instruments are labour market information systems, quantitative and qualitative research on future labour demand, monitoring and identification of changes in skills needs.

Skills gap analysis on a regional level? During the Working Group meeting on HCD in March 2012 the participants discussed the possibility to conduct a skills gap analysis on a regional level in a sector that is of interest for all economies. Such a skills gap analysis could be performed in the follow-up to the RCI project planned to begin in 2013.

Focus Area: Human Capital Development How is Human Capital being addressed in the RCI? 1. RCI Working Group on Human Capital Development 2. Pilot projects in WB economies

Pilot projects in the WB economies 2011 Bosnia and Herzegovina: “Triple Helix Partnerships between academia, business and government”; FYR Macedonia: “Development of an Innovation Strategy”; Montenegro: ”Voucher scheme for SMEs”; Serbia: “Development of a Competence Research Centre”. 2012 Albania: “Business Plan Competition”; Croatia: “Development of an Innovation Strategy”; Kosovo*: “Development of an Innovation Strategy”. * This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo Declaration of Independence

Pilot projects: Beneficiaries identified one project for implementation Innovation projects Human Capital projects Services for supporting technological innovation – manufacturing extension services Services for supporting non-technological innovation Support establishment of inter-firm networks in specific sectors Develop programmes to spread technology-specific information Innovation competition Mechanisms to finance business services in support of innovation (e.g. voucher schemes) Establishment of an Innovation Fund Increase investment readiness Mapping of existing venture capital schemes Explore development of business angel networks Business plan competition The establishment of a Competence Research Centre (CRC) Assist governments in reviewing the overall policy framework for innovation Practices and techniques for monitoring innovation Identifying domestic projects for joint ventures Improving the “triple helix” relationship. Assist governments with systematised usage of skills gap analysis for policy making Review strategies for work-related training Review best practices in internship programmes Review best practices in VET and apprenticeship schemes. Assessment of the effectiveness and design of policies to encourage reverse migration Improving social networks within the region and the diaspora of highly-skilled individuals Review the impact of the tax system, labour market restrictions and parental support on female employment in the Western Balkans One-stop-shop for self-employed to start-up their own businesses Support the drafting of a labour market information strategy Map career guidance programmes in the Western Balkans C. Reviewing system of continued education training

Human Capital Component in pilot projects Horizontal actions across all pilot projects: Best practice transfer from OECD countries Support government officials in understanding pros/cons of policy instruments Assist government officials in application of policy instruments Albania (Business plan competition) Transfer of investment readiness skills to young entrepreneurs Bosnia and Herzegovina (Triple Helix) Study trip Training Close co-operation among universities → transfer of know-how Croatia / FYR Macedonia / Kosovo* (Innovation strategies) Assessments include reviewing the contribution of the education system to national innovation systems Montenegro (SME Voucher) Voucher aims to improve non-technological innovation Focus on raising organisational management and marketing capabilities of SMEs Serbia (Competence Technology Centre) Transfer of know-how from researchers to industry CTC management need skills to broker relationships between academia and businesses

Next steps 3rd RCI Working Group meeting on Human Capital Development will be organised in autumn 2012. In the meantime, the participants are asked to assess what capacities exist in the region to perform a regional skills gap analysis (based on the methodology discussed in March 2012)

Thank you for your attention! Almedina Music Policy Analyst - Regional Competitiveness Initiative Private Sector Development Division Organisation for Economic Co-operation and Development (OECD) Almedina.Music@oecd.org