54
Skills for improved productivity, employment growth and development
Box 6.1
Vocational education and training in the
Republic of Korea and Singapore
In the Republic of Korea, vocational education and training played a crucial role in
shifting the economy from low and semi-skilled labour-intensive manufacturing industries
to more advanced technologies, heavy manufacturing and chemical industries. Following
a vast economic development plan in the 1960s, the Government expanded basic
education to the middle school level, anchored vocational training at the secondary level
through vocational high schools and established two-year junior colleges to expand
technical education at the tertiary level. In addition, it anticipated emerging skills
shortages and started up a public non-formal training system under the Ministry of
Labour to increase the supply of skilled craftspersons and operatives. The massive
promotion of heavy and chemical industries in the 1970s was accompanied by a further
expansion of formal and non-formal vocational education and by an emphasis on
science and engineering in junior colleges. In addition, a Special Law for Vocational
Training, enacted in 1974, required companies with over 500 employees to train 15 per
cent of their workforce.
In Singapore, vocational education and training was equally important during the
industrialization phase. Singapore’s efforts to move to higher value added sectors in the
mid-1970s included adding a vocational stream to secondary education, establishing
joint bilateral technical institutes with France, Germany and Japan and creating a Skills
Development Fund, which was initially used to finance the improvement of workers’ skills
and the ability of employers to provide training. Through its Vocational and Industrial
Training Board (VITB), founded in 1970, Singapore also established a series of
programmes to upgrade the skills of those who were already in the workforce. The
overarching goal was to support the enhancement and diversification of the industrial
base of the economy and to make sure that the move towards higher value added forms
of production was not held back by inadequacies in the education and training of the
workforce.
Source: Osman-Gani, 2004; Powell, 2007; Cheon, 2008.
371. The successful expansion of Costa Rica, India, Ireland and Israel in the global
software and IT industry can largely be explained by the availability of a large supply of
relevant IT skills and competences, and particularly the abundant supply of engineering
and technology graduates (Arora and Gambardella, 2004). As a result, these countries
were prepared and could take advantage when global opportunities emerged. Costa Rica
and Ireland were able to target MNEs through their investment promotion agencies and
to train workers rapidly in the ICT skills required to attract FDI. Furthermore,
particularly in Ireland and Israel, the inflow of skilled migrants (including returning
migrants) added to the supply of relevant IT skills.
372. Today, China, India and the Republic of Korea are the three leading countries in
terms of total technical enrolment at the tertiary level. Indeed, already in 1995 they
accounted for 44 per cent of the developing world’s technical enrolments (UNCTAD,
2003). The Republic of Korea has the world’s highest proportion of the population
enrolled in engineering and other technical subjects. This strong skills base at a high
technical level has been developed to prepare the move into the knowledge economy.
373. R&D skills take on greater importance as countries adopt and absorb ever more
complex technologies. The knowledge-intensive sectors are the most dynamic in terms
of their “learning potential”. As technologies become more complex, the significance of
R&D increases to monitor, absorb and adapt technologies, lower transfer costs and
obtain technologies that are not easily available under licence. The Republic of Korea
and Singapore had already invested heavily in the development of R&D capacity to
prepare for the knowledge economy, while Ireland has recently started to focus on R&D
130
46
Skills policies responding to global drivers of change: Technology, trade and climate change
with a view to moving into higher value added sectors. China’s R&D as a percentage of
GDP grew from around 0.7 per cent in 1997 to 1.1 per cent in 2002 (UNIDO, 2005,
p. 63). This reflects the strategy in China of diversifying manufacturing into medium-
level technologies and, at the same time, catching up with cutting-edge technologies in
some sectors and shifting into the knowledge economy.
374. Within countries, technological change may affect men and women differently.
Occupational segmentation along gender lines may perpetuate a digital or technological
gap. Skill polarization between an elite group of technologically skilled specialist
workers and the larger mass of technically semi-skilled, flexible or casual workers
receiving low-level training may prevent women from preparing for employment in new
industries or occupations. Technological change often makes lower-skilled labour
redundant. If women are concentrated in lower-skilled jobs, then they are relatively more
vulnerable than men to both the qualitative and the quantitative impact of technological
change (Biasiato, 2007). On the other hand, gender roles may not be fully segregated in
certain areas of new technology. Women who begin working in these areas are at
something of an advantage, as they do not have to overcome the perception that they are
intruding on what has been accepted as “men’s work”.
6.2. Maximizing the benefits and minimizing the
costs of trade and investment
375. The interlinkages between trade, foreign investment, employment and development
have recently been the subject of increased attention by the ILO and other international
organizations. For example, in 2006 the ILO undertook a joint study with the World
Trade Organization on trade and employment (ILO/WTO, 2007). The World
Commission on the Social Dimension of Globalization (2004, para. 275) pointed out that
“All countries which have benefited from globalization have invested significantly in
their education and training systems.”
6.2.1. Skills and technology for competitiveness
376. The benefits deriving from trade are not simply a residual effect of openness to
trade. Many countries face important supply-side constraints and therefore seek to
develop social capabilities so that they can benefit from trade and take advantage of
global opportunities to induce and sustain a dynamic development process. Countries
can develop new comparative advantages through this dynamic process. They can
strengthen their productive capacities, their capacity to respond to the opening up of
trade and their capacity to deal with change. With strong social capabilities, economies
can take advantage of emerging opportunities in international markets and are therefore
able to benefit from trade. Social capabilities, technological development and
diversification into non-traditional economic activities help prepare economies to take
advantage of the opportunities and potential available through trade.
377. Figure 6.1 groups countries according to their performance in education and the
export of manufactured goods. In Africa, labour costs per hour are the lowest in the
world, but so are average educational levels: most African countries have not
participated in the global growth of manufactured exports and the diversification of
production locations. These countries are grouped in the lower left-hand area of the
figure.
131
12
Skills for improved productivity, employment growth and development
132
378. The figure shows that there is a particularly strong correlation between
manufactured exports and education levels (measured in the average years of schooling
of persons over the age of 15) in Asia and in CEE countries. This suggests that, as these
countries invest in education and training, they are developing skills that are needed to
diversify export structures and increase their competitiveness on international markets.
379. However, in Latin American countries the share of manufactured exports is usually
low, independent of the average level of schooling achieved. This lack of correlation
suggests that education and skills development in most Latin American countries does
not adequately create the social capabilities required for export diversification and
international competitiveness.
214
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