1. Technical and Vocational Education and Training in Latin America DIANA MEJÍA San José, June 4, 2014 Senior Advisor, Public Policy and Competitiveness dmejia@caf.com Overview and way forward

2. Agenda 1.Relationship between competitiveness and education 2.Diagnosis of Technical and Vocational Education and Training (TVET) in Latin America 3.Recommendations to overcome the challenges in Latin America 4.CAF Program on Education for Productivity 5.Study case: main conclusions of KSP-CAF joint program on TVET in Panama

3. Relationship between competitiveness and education

4. Source: World Economic Forum (2012-2013) and Doing Business (2013) Competitive position Latin American countries experience a significant dispersion in their competitiveness agendas

5. Source: World Economic Forum (Global Competitiveness Index) Comparison of global indicators of competitiveness Technical and Vocational Education and Training (TVET) has traditionally been analyzed from the perspective of educational and labor policies. However, currently it is also assessed from the perspective of productivity policies of businesses and competitiveness policies of economies as a fundamental aspect of countries growth. Technical and Vocational Education and Training (TVET) has traditionally been analyzed from the perspective of educational and labor policies. However, currently it is also assessed from the perspective of productivity policies of businesses and competitiveness policies of economies as a fundamental aspect of countries growth. Competitiveness Index in Higher Education and Training

6. Key Indicators on Education - WEF The Global Competitiveness Index of the WEF includes quality of the education system, quality of primary education and quality of education in science and mathematics, as well as the availability of scientists and engineers as key components of countries competitiveness.

7. Source: CAF, UNESCO (Informes sobre desarrollo Humano) y Hanushek y Woessmann (Schooling, educational achievement, and the Latin American growth puzzle) Positive relationship between GDP growth and years and quality of education The positive relationship between GDP growth and average years of education demonstrates the impact of education on productivity. In 1991, Barro demonstrated this correlation for many countries. In 2013 he added that the correlation is stronger if quality of education, as measured by standardized tests of knowledge in mathematics, science and reading, is included. Relationship between GDP growth and quality of education

8. Source: Survey of Adults Skills (PIAAC) (2012). Correlation between labor productivity and the use of reading skills at work

9. Source: Survey of Adults Skills (PIAAC) (2012). Likelihood of positive social and economic outcomes among highly literate adults

10. Diagnosis of TVET in Latin America

11. Evolution of educational coverage in Latin America 1980 2000 2012 Educational coverage has improved in Latin America in the last 30 years, however there is still a lag in terms of quality of education and generation of skills and competencies of the workforce compared to those required by companies. Main problems of TVET in LA: 1. From coverage to quality:

12. Fuente: OECD, PISA 2012. Main problems of TVET in LA: 1. Low quality of education Average performance in problem solving and variation in performance Standard deviation in problem-solving performance (in score points)

13. Source: Enterprise Survey, 2010 The demand of business services Main problems of TVET in LA: 2. Gap between demand and supply According to World Bank figures, almost 37% of companies in the region believe that finding a workforce with adequate training is one of their main obstacles.

14. Source: OECD, PIAAC 2012 Main problems of TVET in LA: Trends in the demand for skills

15. Fuente: Diagnóstico sobre ETFP, CAF Main problems of TVET in LA: 3. Low investment of companies International companies, exporters, large and innovative give more formal training than national, non-exporting, small and medium and not innovative. Large companies (200+)

16. Recommendations to overcome the challenges in Latin America

17. Recommendations for Latin America 1. Institutional weakness of TVET systems: Formulation of a strategic framework, sectoral convergence and coordination of public policies: the different areas of government must converge in their strategic objectives and articulate their programs and action plans in an efficient and coordinated manner. Institutional strengthening of TVET management: assigning distinct functions according to three institutional levels: one strategic and rector of the system, one for administration and management, and one provider of educational services and vocational training. Business participation: encourage private participation and involvement in the development of sector plans, cluster or value chains, as well as curriculum design and definition of competencies. Cluster and territorial approach, SME support and development of quality assurance schemes, monitoring and evaluation. 2. Low quality of education: T eacher training in specific technical skills.

18. Recomendaciones para América Latina 3. Gap between supply and demand of labor skills: Integration of the education and training system: integration of curricula that interrelate the initial training, continuing education, adult education and non-formal education; coordination of training of teachers in both systems, among others. Enterprise training: implementation of educational experiences that combine theoretical classroom learning and experiential learning in enterprises (dual training). 4. Low investment in training by firms: Design of incentives and other mechanisms to encourage higher levels of training in businesses, for example, tax incentives, creation of funds for the development of human capital, etc. Main recommendation: promoting competencies (qualifications) certification as a mechanism for comprehensive solution of linkage between sectors and processes.

19. Source: Irigoin y Vargas, “Competencia Laboral. Manual de conceptos, métodos y aplicaciones”, Cinterfor/OIT (2002). System of training and certification of competencies System management: Scenario where the tripartite social dialogue and agreement process is verified on the legitimacy and representativeness of the system. Government sector Labor sector Employer sector Sectoral level: Comprised of employers and workers in a specific sector. Development of performance standards and certification. Quality assurance. Sector 1Sector 2Sector 3 Operational level: Institutions for training of workers, evaluation and certification. Training role Evaluation role Certification role

20. CAF Program on Education for Productivity

21. Education for productivity - CAF Main objectives: Promote TVET as a driver of business innovation and productivity growth in competitive industries. Bridging the gap between supply and demand for TVET, in order to promote flexible training systems and demand-driven and sustained competitiveness in businesses. 1 2

22. Education for productivity - CAF Program components: 1 Investment in infrastructure and institutional strengthening Promotion of systems for competencies certification Training and retraining of teachers Introduction of innovative models - public private partnerships Adoption of information systems and quality assurance 2 3 4 5

23. Study case: main conclusions of KSP- CAF joint program on TVET in Panama

24. National Issue 1: Adoption of Qualification System for the 3 Main Industry Sectors -S1: 3 Main industry sector should first be organized as a foundation for the development of qualification system for the 3 industry sectors -S2: TVET system for the 3 sectors should be improved continuously to align it with operation of the qualification system Policy Recommendations for TVET of three main industries Logistics Issue 1: Adoption of the Converged Education and Training Systems -S1: The Curriculums and the Programs should be Restructured and operated, reflecting characteristics of logistic industry Issue 2: Adoption of Life-long vocational training system for workers -S1: To provide a life-long vocational training system for employees of the logistics sector of Panama

25. Tourism Issue 1: lack of strategic plan reflecting environmental change -S1: Maintaining the global service quality by strengthening the qualification system for employees in the private sector issue 2: lack of strategic plan reflecting regional characteristics -S1: Retraining the government officers to become specialized manpower -S2: Expanding the roles of universities through region-based industry-academia cooperation Agriculture Issue 1: Increasing import of agricultural product’s because of low productivity -S1: Expand a production of agricultural product’s with high added value -S2: Innovation TVET system in agriculture applying NCS and NQF Issue 2: Low industry growth rate and weak profit structure -S1: National level Policy for improving quality of life and increasing income for agricultural communities -S2: Paradigm shift to the ’6th industry’ from the traditional agricultural industry Policy Recommendations for TVET of three main industries

26. Más oportunidades, un mejor futuro. www.caf.com