The Chicken and the Egg; Workforce Development and Economic Competitiveness Erik Payne Butler Human Investment Institute E&E Bureau Regional Competitiveness Conference Kiev, Ukraine June, 2009

Universal Themes in Workforce Development  Supply and Demand Dynamics -- employers need workers -- people need skills -- communities/labor markets need the match to work  Equity, access and cost – skills, competencies and systems  Mutual dissatisfaction, no matter the economy  The BIG Questions about 25 year-olds

The Conventional View of The Factors of Competitiveness Enablers Financ e Human Resources Infrastructur e Incentives Enterprises farms, manufacturers, and service providers of all types & sizes: micro, small, medium, large Growth in Productivity, Output, & Incomes Drivers Micro Policies & Governance property rights, enforcement of contracts / rule of law, economy-wide and sector-specific policies & regulations, trade policies... Macro Policies & Governance taxation, budget formulation & execution, deficit control, monetary policy, exchange rates... Incentives Inputs Impact

Common (though not universal) themes in the Region  Young populations  High basic literacy  Relatively small formal employment sector  Large (though differentiated) grey economy  Rigid/traditional educational systems  Little practical experience offered  Europe a looming presence

Insights from Recent Assessments Two Assessments in 2009: Macedonia and Kosovo “Taking Steps toward a 21st Century Workforce in Macedonia” “A Modern Workforce Development System is Key to Kosovo’s Growth”

Common themes from Macedonia and Kosovo  Age matters  Poverty is symptom and cause of failures  Projecting labor supply and demand is an uneven art, and not yet a science  Grey market inhibits developing a formal workforce development system  Where demand is weak, supply also lags behind  Education matters  Universal criticism of the lack of practical education and soft skills

Age matters: Kosovo and Macedonia

Age still matters: Albania and Bulgaria

Poverty snapshot: cause and symptom 2008 Per Capita / GDP (PPP) in billions Source: CIA World Factbook (2008)CIA World Factbook *Estimate **Large informal sector Kosovo $2,300* $5.00** Albania$6,400$23.07** Bosnia and Herzegovina $6,600$30.49** Serbia$8,200$83.14 Macedonia$9,200$18.97** Montenegro$10,600 $7.16 Croatia$16,900 $75.93

Facts, perceptions and predictions  Demand/supply interplay: demand low = supply systems complacent  Projecting supply and demand: the skills gap analysis opportunity  The “grey market”: livelihood reality or inhibiting factor  Education: resource or drag  Adapting the three big questions

The three big questions for 25 year- olds  CAN YOU READ  DID YOU GRADUATE  HAVE YOU WORKED

The three big (Workforce) questions for firms and sectors?  Can you grow (modernize) with existing skill profiles?  Do you have a pipeline of skilled workers?  How and when will your skill needs change over time?

Supply, Demand, and the beginnings of systems in Macedonia and Kosovo: Recommendations from the assessments Recommendation (Beneficiary) categories  Future workers  The presently unemployed  Employed but under-skilled  Policy and system improvement  Capacity-building

Macedonia Recommendations  One Stop career centers  Municipal “supply-side” model-building  Supporting entrepreneurship and enterprise development  The Green Jobs Corps program  The Rising Generation Initiative

Kosovo Recommendations  Public-private oversight for system development  Annual Skills Gap Survey of Kosovo employers  Municipally-based Career Learning Centers,  Skills training and certification for unemployed and underemployed beneficiaries  Entrepreneurship training and business growth;