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The trillion rupee question on skills development

Updated January 28, 2019

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Most young males are either engaged in unskilled jobs or performing skills-based jobs with no formal training.— AFP/File
Most young males are either engaged in unskilled jobs or performing skills-based jobs with no formal training.— AFP/File

FINANCING skills development of a largely young and less educated population will continue to haunt governments in Pakistan.

Approximately 57 million youth in the country have a high school educational attainment level or below.

Most young males are either engaged in unskilled jobs or performing skills-based jobs with no formal training, while most young females are not even part of the organised workforce despite being half the working age population.

To correct the imbalance, the government needs a trillion rupees to formally train this young workforce in entry-level certified skills. But the big question is: who should foot the bill?

To correct the imbalance, the government needs Rs1 trillion to formally train this young workforce in entry-level certified skills. But the big question is: who should foot the bill?

The answer is simple: On its own the government cannot, given the competing claims on its drained financial resources. And yet we cannot afford to carry the burden of a young, unskilled, workforce if we are to achieve our economic growth aspirations and become a globally competitive economy.

Here are some structural and strategic initiatives the government needs to take, along with developing a sustained focus, to partially address the funding problem and get results.

A ‘ring-fenced’ financial commitment for the next 10 years must be made by the government with international donors interested in developing a young workforce.

Parked at a national skills fund, this body should be responsible for the disbursement of funds based on clearly defined output and outcome indicators. Similar funding entities should also exist in all provinces in complete alignment with the national skills fund. Punjab already has a skills fund, established with the Department for International Develop­ment back in 2010.

In addition to the committed government funding, these funding bodies must have complete independence in funding allocation decisions as well as the ability to identify and raise funds from new sources.

The duration of the accredited skills programmes need a serious re-evaluation. Given the fast-paced changes in skill requirements, owing to the impact of technology, the global trends in skills trainings have moved away from programmes of longer duration towards a bootcamp model.

Longer duration programmes have lost their lustre because the opportunity cost of enrolling in one is high in terms of being out of the job market with no salary to meet household needs; no clear employment visibility; and the longer the programme, the more expensive it gets to fund one trainee, with fewer resources left for others.

The private sector, despite its shortcomings, can do a much better job at training the workforce of the future

The bootcamp-style, shorter programmes, are more employer-centric, intense, less expensive and have greater buy-in from the youth to complete. The industry also prefers programmes of shorter durations, with a high component of practical training.

However, there should be pathways for the bootcamp model for those interested in continuously upgrading its skills. By adopting this model, more youth can be trained and employed even with fewer financial resources.

The government needs to incentivise the industry to invest in skills development through the matching-funding framework: for every rupee the industry invests in skills development of unskilled and unemployed youth, the government should match it with the same amount.

The business community, either directly or through their chambers and associations, have a direct commercial interest in a skilled workforce and must share the burden of responsibility. A formal skills training programme, managed by the industry with its financial contribution, will always be more demand-driven, market relevant and deliver better employment outcomes.

The system of recognising and certifying existing skills should be applied nationwide. The youth engaged in skilled roles have acquired these skills informally; through a teacher-mentor model, and may not necessarily need to go through a formal skills development training.

A nationwide assessment system needs to become operational that evaluates the existing skill base, either awards a formal certificate of recognition or puts them into bootcamp courses to overcome any gaps.

Finally, fixing the existing public Technical and Vocational Education and Training (TVET) institutes will also bring in huge savings that can be ploughed back into skills development.

Over time, the public TVET sector has largely become a drain on the exchequer through a burgeoning fixed cost base, huge investments in infrastructure and low levels of utilisation. It lacks industry confidence and buy-in owing to poor relevance and income generation outcomes.

The private sector, despite its shortcomings, can do a much better job at training the workforce of the future. The government should look at deeper engagement of the private sector in terms of financing and management of public TVET institutes in return for tangible and measurable results.

The skills funds, both national and provincial, should play an active role in taking this forward.

— The writer the chief executive officer of Punjab Skills Development Fund

Published in Dawn, The Business and Finance Weekly, January 28th, 2019