Closing Italy’s skills gap is everyone’s business

by Andreas Schleicher
Director, Directorate for Education and Skills

Italy is the birthplace of Leonardo, Galileo and Armani. For centuries, skilled Italians have been recognised for their contributions to the world’s art, science, and culture. A relatively small country, with scarce natural resources, Italy today is among the world’s leading industrialised economies and is home to millions of firms, including many small and medium sized enterprises (SMEs), who play a prominent role in many key global value chains. So the skills of Italy’s population matter. Not only for their own country, but also for their contribution to the future prosperity and well-being of the global community. 

Italy’s future prosperity depends upon the skills of its people

Today, Italy is facing a skills gap. OECD Surveys measuring the skills of 15 year-olds (PISA) and adults between the ages of 16 and 64 years old (Survey of Adult Skills, PIAAC) have detected a significant shortfall in skills  compared with other countries. Despite progress achieved over the past decade, young Italians’ PISA scores in literacy and science are still relatively low compared with the OECD average. Adults display an even larger skills gap compared to their peers in other OECD countries. In 2012, some 13 million adults between 25-64 scored at the bottom of the PIAAC ranking,  while in some southern regions 2 out of 3 adults were found to be functionally illiterate. Poor skills are paralleled by stagnant productivity growth, which indicates that Italy may be trapped in a low-skilled equilibrium in which both the supply of, and the demand for, skills are weak.

Implementing recent reforms requires concerted efforts  

Italy has recently embarked on a major reform effort aimed at boosting the development, activation and use of people’s skills. For example, the 2014 Jobs Act introduced a major overhaul of labour market settings to favour open-ended contracts (over fixed-term ones) and strengthen active labour market policies. The following year, the Good School Act made work-based learning compulsory for all high schools, in order to provide students with real life experiences and a much broader range of learning opportunities. But Italy did not stop there, and in 2015 put in place Industry 4.0, a 3-year programme that provides firms with targeted support to help them transition to digital technologies and boost their demand for skilled workers. 

Implementation of these reforms has met with many challenges. They can only be addressed by generating synergies among different skills policies, engaging more with key stakeholders and improving the multilevel governance of the national skills system. 

Italy faces 10 skills challenges

Today, the OECD Secretary General is in Rome to launch the OECD Skills Strategy Diagnostic Report for Italy, together with a high-level panel of Ministers and undersecretaries. The report applies the framework of the OECD Skills Strategy to identify 10 skills challenges for Italy as it seeks to maximise its future skills potential. It includes a rich set of comparative data and evidence and offers concrete examples of how other countries are tackling similar skills challenges. 

With regards to developing relevant skills, the report focuses on:  

1. Equipping young people across the country with skills for further education and life; 

2. Increasing access to tertiary education while improving quality and relevance of skills;

3. Boosting the skills of low skilled adults.

When activating people’s skills, Italy will need to tackle the challenges of:  

4. Removing supply- and demand-side barriers to the activation of skills in the labour market;

5. Encouraging greater participation of women and youth in the labour market.

Italy also needs to make better use of the skills it has by: 

6. Making better use of skills in the workplace;

7. Leveraging skills to promote innovation.

Finally, Italy urgently needs to improve its overall skills system by: 

8. Strengthening multilevel governance and partnerships to improve skills outcomes;

9. Promoting skills assessment and anticipation to reduce skills mismatches;

10. Investing to improve skills outcomes.

Each of these 10 skills challenges are well known in Italy. By adopting a systemic approach to their analysis, this report underscores the need for renewed efforts to adopt a whole-of-government skills strategy that cuts across ministerial silos and gives an active role to key stakeholders, including civil society.  To close its skills gap, Italy needs to mobilise everyone’s energies to ensure that skills policies are implemented effectively and help deliver inclusive growth. 

Taking action today

The diagnostic phase of the OECD National Skills Strategy project in Italy has brought together many different ministries and a large number of stakeholders to gather insights and start generating a common narrative about the skills challenges facing Italy today. Developing concrete plans for action will mean building on the many reforms already underway and the continued engagement of all stakeholders.

The OECD stands ready to support Italy as it builds the skills that will empower its people to generate a new wave of well-being, prosperity and innovation that will benefit everyone, everywhere.

Links

OECD Skills Strategy Diagnostic Report: Italy

OECD National Skills Strategy

Survey of Adult Skills (PIAAC)

For more on skills and skills policies around the world, visit: http://www.oecd.org/skills/

Follow the conversation on twitter: #OECDSkills

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Realising Slovenia’s bold vision for skills

by Andreas Schleicher 
Director, Directorate for Education and Skills

Small in size but not in its ambitions, Slovenia has a bold vision for a society in which people learn for and through life, are innovative, trust one another, enjoy a high quality of life and embrace their unique identity and culture.

So how does a country of 2 million people, with an export-oriented economy still recovering from the financial crisis, realise such ambitious goals?

People’s skills – what they know and can do with what they know – are at the heart of all countries’ prosperity. Technological change, globalisation and population ageing all magnify the importance of people’s skills. Recognising this, Slovenia embarked on a journey involving nine government ministries and offices and over 100 stakeholders to map Slovenia’s main skills challenges.

A series of interactive workshops in Ljubljana in 2016 provided a unique forum in which educators, employers, students, employee representatives, government officials and others discussed Slovenia’s skills challenges and opportunities. Participants underscored the need to encourage young people to be independent and creative thinkers. They wanted to make Slovenia more attractive to high-skilled workers, a place which embraces a culture of entrepreneurship and makes co-operation between government and citizens the new way of working.

Slovenia’s nine skills challenges

The OECD Skills Strategy Diagnostic Report: Slovenia, published today, builds on these insights as well as comparative data and policy analysis from the OECD, the European Commission and national sources. The report identifies nine skills challenges for Slovenia as it seeks to achieve its economic, social and environmental ambitions.

People need to develop skills for economic and social success in an ever-changing world, early in life and through life. The report concludes that Slovenia faces the challenges of:

• Equipping young people with relevant skills for work and life
• Improving the skills of low-skilled adults who did dot have the kind of educational opportunities their children now enjoy

Creating conditions in which people want to work and firms are able to hire will be essential to Slovenia’s future prosperity. When it comes to activating its skills supply, Slovenia will need to tackle the challenges of:

• Boosting employment for all age groups
• Attracting and retaining talent from Slovenia and abroad

Promoting workplace cultures, practices and systems that spur workers and employers to put skills to use in workplaces can lead to higher wages, job satisfaction and labour productivity. Here, Slovenia faces the challenges of:

• Making the most of people’s skills in workplaces
• Using skills for entrepreneurship and innovation

Finally, Slovenia must ensure that the overall settings of the skills system – governance, information and financing – work coherently to achieve the best possible skills outcomes. This requires:

• Inclusive and effective governance of the skills system
• Enabling better decisions through improved skills information
• Financing and taxing skills equitably and efficiently

Moving from diagnosis to action

Slovenia can now build upon this strategic assessment of the national skills system to develop an integrated set of actions to tackle its skills challenges.

The report identifies three themes emerging from this work that can help to frame future action:

1. Empowering active citizens with the right skills for the future: Slovenia, like other OECD countries, is grappling with the question of which skills are most essential for economic and social success in the future. There is no definitive answer to this question. Yet success will likely require that people develop a portfolio of cognitive, socio-emotional and discipline-specific skills that equip them to continue learning, interact with others and solve increasingly complex problems. A responsive and resilient national skills system will be essential. Slovenia needs to do a better job of ensuring that all actors play their part in creating, using and responding to high-quality information on skills needs.

2. Building a culture of lifelong learning: Ensuring that all actors – individuals, employers, educators, policy makers and others – believe and are invested in the value of learning at every stage of life will be crucial for the future prosperity and well-being of Slovenians. How adult learning is delivered and supported needs to be rethought, to make it accessible to all while demonstrating to individuals and employers the tangible benefits of upskilling and reskilling throughout life.

3. Working together to strengthen skills: The experience of the National Skills Strategy project in Slovenia has not only confirmed the value of co-operation between different ministries and stakeholders, but the importance of making this co-operation more systematic. The surest path to improving skills outcomes will be to work together today, based on a shared vision for the future.

Building on the significant momentum achieved during the Diagnostic Phase, Slovenia now has a unique opportunity to mobilise government and stakeholders to take concrete actions to improve skills outcomes. The OECD stands ready to accompany Slovenia in its next phase of the journey towards prosperity and well-being, building on the skills of its people.

Links:

OECD Skills Strategy Diagnostic Report: Slovenia
The OECD Skills Strategy 

For more on skills and skills policies around the world, visit: www.oecd.org/skills

Follow the conversation on twitter: #OECDSkills

Photo credit: Slovenia High Resolution Future Concept @Shutterstock

Building strong partnerships to tackle Mexico’s skills challenges

by Gabriela Ramos
Chief of Staff, OECD

Skills are central to the future prosperity and well-being of Mexico’s people 

Skills are the foundation upon which Mexico must build future growth and prosperity. Mexico, being one of the youngest populations among OECD countries, has a strong demographic advantage and thus a unique window of opportunity. But it also faces common challenges to bring the skills of its population up to the requirements of the global digital economy.

The time to act is now. Mexico needs to boost the development, activation and use of skills to drive further innovation and inclusive growth while dealing more effectively with longstanding, but increasingly urgent issues, such as improving equity and reducing informality. To this end, the aim of current educational reform in Mexico is a must to provide quality education to all the individuals.

However, challenges remain. According to the 2015 Programme for International Student Assessment (PISA) data many youth in Mexico are not developing high levels of skills with a very high share of students performing poorly in mathematics (56.6%), in reading (41.7%) and in science (47.8%). In addition, due to high drop-out rates only 56% of 15-19 year-olds complete upper secondary education, far below the OECD average of 84%. Similarly, on tertiary level only 16% of the population aged 25 to 64 years old in 2015 had attained tertiary education, which is significantly below the OECD average of 36%. To these outcomes, we should add the fact that young people connect with informal labour market, reinforcing the precariousness of their job opportunities. Therefore, despite recent progress, Mexico still remains in a low-skill equilibrium.

Indeed, Mexico tends to specialise in low value-added activities linked to informal employment arrangements, which are estimated to account for 52.5% of all employment. Workers in the informal economy are, on average, less likely to: receive training, participate in high performance workplace practices that make more effective use of their skills, and find themselves employed in precarious and low quality jobs. Therefore, demand-side barriers which discourage employers from hiring formally should continue to be addressed, as well as the high cost to firms for hiring low income workers, a complex tax system, and heavy labour market regulations. Targeted support will be also needed if young people and women are to enter and remain engaged in the labour market. Over one in five young people are currently neither in employment, education, or training (NEETs), risking becoming permanently marginalised - from the labour market, from education, and from society. Given the differences between boys and girls not in employment or in schools, special emphasis should be placed on women’s conditions, and to sustain their involvement with high quality jobs. Mexico cannot be losing the talent of half of its population.

More needs to be done to improve the use of skills in the workplace. There are significant skills mismatches with a quarter of workers (26%) over-educated and just under a third (31%) under-educated for their current job. Companies and educational institutions need to co-operate to reduce these mismatches at source, while firm-sponsored training could help the low-skilled. At the same time boosting innovation and research are critical if Mexican firms are to continue improving productivity, move up the global value chain, and increase the demand for higher skills. But in 2013, Mexican businesses invested the equivalent of just 0.2% of GDP in R&D. That’s not just well short of the OECD average but well below Korea’s 3.3% of its GDP investment in R&D during the same time period.

Making this all happen in practice requires concerted government action. Mexico has undertaken a number of reforms aiming to enhance the quality of teaching, raise productivity, stimulate innovation and improve integration into global value chains. Actually, one of the positive pieces of news is that productivity has increased recently as a result of recent reforms, particularly in the telecommunications market.

It is necessary to improve effectiveness of government institutions, and formal collaboration arrangements across ministries. The National Productivity Committee is good news in this sense – but much remains to be done. Yet governments cannot achieve better skills outcomes alone. Success will depend on the commitment and actions of a broad range of stakeholders. The help of employers, trade unions, students and trainers is needed. These are the people who, each and every day, invest in skills, set skills in motion and put them to work.

Best practices of other countries 

Countries that are most successful in mobilising the skills potential of their people share a number of features: they provide high-quality opportunities to learn throughout life, both in and outside school and the workplace; they develop education and training programmes that are relevant to students and the labour market; they create incentives for, and eliminate disincentives to, supplying skills in the labour market; they recognise and make maximal use of available skills in workplaces; they seek to anticipate future skills needs and they make learning and labour market information easy to find and use.

The OECD Skills Strategy provides countries with a framework for developing co-ordinated and coherent policies that support the development, activation, and effective use of skills. In Norway, our collaboration clearly demonstrated the value of a whole of government approach to tackle the country’s longstanding skills challenges. The diagnostic and action reports fed into policy measures to improve career guidance and outreach to low-skilled adults – and served as the foundations for the new National Skills Strategy to be launched this year. Portugal used our project to build broad stakeholder engagement in defining the key skills challenges facing the country as it emerged from the worst economic crisis of its history. This year we will be using our shared diagnosis to help design concrete actions to provide adult education and training across the country. Korea has built on the results of its diagnostic report and ongoing OECD support to engage actively with a wide range of stakeholders on critical issues such as youth employability and lifelong learning.

Mexico finds itself in a context with many other countries moving at a high speed. The digitalisation of the economy and the rapid pace of change require not only a good knowledge basis, but also lifelong learning and the flexibility to adapt skills to changing conditions and demands. The future of work and the capacity to anticipate the evolving needs of the markets, due to the rapid technological progress, is a common challenge that all countries are trying to address. Mexico has been participating in the OECD Skills Strategy project to work with us to advance the best practices of other countries that have been able to improve their outcomes in this field.

Mapping Mexico’s skills challenges together

Since March 2016, we have been working closely with Mexico in applying the OECD Skills Strategy framework as part of a collaborative project to build a more effective national skills strategy. The National Project Team established by the Mexican government to oversee this process is co-ordinated by the National Productivity Committee (NPC) and includes representatives from Ministry of Finance, Ministry of Education, Ministry of Labour, Ministry of Economic Affairs and the National Council for Science and Technology (CONACYT). The CNP has been critical in this process, as it embodies the spirit of partnership across government ministries and with key sectors of the economy and society as well as focuses on the nexus between productivity, inclusive growth and skills.
The results of this work are published in the OECD Skills Strategy Diagnostic Report: Mexico that sets out 8 skills challenges for Mexico. These challenges were identified in the course of several rounds of discussions with the National Project Team, technical meetings with Mexico’s leading experts and input from over 100 stakeholders such as employers, trade unions, education providers and experts including from other International Organizations, gathered during two interactive workshops held in June 2016 and September 2016 in Mexico City.

Mexico’s 8 skills challenges

So what are the main skills challenges facing Mexico today?
With regard to developing relevant skills, the report concludes that Mexico should focus on:
• Improving the foundation skills of students in compulsory education
• Increasing access to tertiary education while improving the quality and relevance of the skills developed in tertiary education.

When it comes to activating its skills supply, Mexico will need to tackle the challenges of:
• Removing supply and demand-side barriers to activating skills in (formal) employment.
• Boosting the skills activation of vulnerable groups.

Mexico could make more effective use of the skills it already has by: 
• Improving the use of skills at work.
• Supporting the demand for higher skills to boost innovation

Finally, Mexico could strengthen the overall governance of the skills system by: 
• Supporting collaboration across government and stakeholders to achieve better skills outcomes
• Improving public and private skills funding.

Building a shared road-map for action

As the first OECD country from Latin America to embark upon a National Skills Strategy country project, Mexico has demonstrated its commitment to leveraging international comparative data and good practice to tackle its own skills challenges. Equally, this analysis of Mexico’s skills system will be of great interest to many other countries around the world.

Throughout this initial diagnostic phase, we have witnessed first-hand a strong commitment to improving Mexico’s skills outcomes across government, employers and trade unions, as well as education and training providers.

The true test lies ahead, in designing concrete actions to tackle the skills challenges facing Mexico. Government cannot achieve better skills outcomes alone, so moving from diagnosis to action will require a whole of government and a whole of society approach.

The OECD stands ready to contribute to Mexico’s ongoing efforts to achieve its ambitious goals in designing and implementing better skills policies for better jobs and better lives.

Links:

OECD Skills Strategy Diagnostic Report: Mexico

Executive Summary (English)

Executive Summary (Spanish)

OECD Skills Strategy 

Survey of Adult Skills (PIAAC)

OECD Skills Outlook 2013: First results from the Survey of Adult Skills

OECD Skills Outlook 2015: Youth, Skills and Employability

OECD PISA 2015

For more on skills and skills policies around the world, visit: www.oecd.org/skills

Follow the conversation on twitter: #OECDSkills

Photo credit: Hands were a collaboration concept of teamwork @Shutterstock

Skills are the key to unlocking prosperity in Peru

by Andreas Schleicher
Director, Directorate for Education and Skills

Skills are central to the future prosperity and well-being of Peru’s people

Peru has been one of the strongest economic performers in Latin America with steady GDP per capita growth over the past decade, which has been accompanied by a sharp decline in poverty rates and a significant rise in educational attainment.This impressive track record can only be if supported by a process of economic diversification, in which skills and human capital must play a central role.

Peru’s goal for the future is to diversify the economy and tackle informality, boost productivity in firms and expand export capacity, while raising its capacity to innovate and take part in global value chains with more complex goods and services. All of which will require a stronger skills base. Achieving better and more equitable skills outcomes will also contribute to building a healthier, more equitable, and more cohesive society.

Now is the time for Peru to invest in developing skills that are relevant to the needs of a rapidly evolving labour market, to fully activate the skills hidden in informal employment arrangements and to make the best use of skills by promoting high performance workplace practices.

Skills investments pay off 

We know that in countries where a significant proportion of adults have poor skills, it is difficult to introduce productivity-enhancing technologies and new ways of working. This, in turn, stalls innovation and improvements in living standards.

Yet skills affect more than just earnings and employment. The Survey of Adult Skills (PIAAC) shows that adults with lower literacy proficiency are far more likely than those with better literacy skills to report poor health, to perceive themselves as objects rather than actors in political processes, and to have less trust in others. The Survey has been conducted in over 30 countries and new data on the skills of Peru’s adults (aged 16 to 65 years old) will be available in 2019. This comparative data shows clearly that people who lack foundation skills struggle to participate fully in society, democracy and the economy.

Countries that are the most successful in mobilising the skills potential of their people share a number of features: they provide high-quality opportunities to learn throughout life, both in and outside school and the workplace; they develop education and training programmes that are relevant to students and the labour market; they create incentives for, and eliminate disincentives to, supplying skills in the labour market; they recognise and make maximal use of available skills in workplaces; they seek to anticipate future skills needs and they make learning and labour market information easy to find and use.

Mapping Peru’s skills challenges together

The OECD Skills Strategy provides countries with a framework for developing co-ordinated and coherent policies that support the development, activation, and effective use of skills.

Since October 2015, we have been working closely with Peru in applying the OECD Skills Strategy framework as part of a collaborative project to build a more effective national skills strategy. The National Project Team established by the Peruvian government to oversee this process is co-ordinated by the Ministry of Labour and Employment Promotion, and includes representatives from the Ministry of Education and the Ministry of Economy and Finance.

Today, the results of this work are published in the OECD Skills Strategy Diagnostic Report: Peru that sets out 9 skills challenges for Peru. These challenges were identified in the course of several rounds of discussions with the National Project Team, technical meetings with Peru’s leading experts and input from over 100 stakeholders such as employers, trade unions, education providers and experts gathered during two interactive workshops held in November 2015 and May 2016 in Lima. The report also draws upon OECD analysis and data as well as that of the United Nations Educational, Scientific and Cultural Organisation (UNESCO), the International Labour Organisation (ILO), the World Bank, the Inter-American Development Bank (IADB), and national data.

Peru’s 9 skills challenges

So what are the main skills challenges facing Peru today?

With regard to developing relevant skills, the report concludes that Peru should focus on:

• Improving school completion and foundation skills in compulsory education
• Improving access to quality higher education and transition to work

When it comes to activating its skills supply, Peru will need to tackle the challenges of:

• Improving the labour market institutional setting to boost formal employment
• Extending the reach of active labour market policies to improve workers’ employability

Peru could make more effective use of the skills it already has by:

• Improving the alignment between skills supply and demand and fostering a better use of skills in the workplace
• Putting skills to better use to foster a more diversified and productive economy

Finally, Peru could strengthen the overall governance of the skills system by:

• Improving learning and labour market information to support better education and career choices, and evidence-based policy making
• Improving co-ordination across different actors and levels of government to achieve better skills outcomes
• Building partnerships to ensure that policies are responsive to changing skills needs
  

Building a shared road-map for action

As the first non-member country to embark upon a National Skills Strategy country project with the OECD, Peru has demonstrated its commitment to leveraging international comparative data and good practice to tackle its own skills challenges. Equally, this analysis of Peru’s skills system will be of great interest to many other countries around the world.

Throughout this initial diagnostic phase, we have witnessed first-hand a strong commitment to improving Peru’s skills outcomes across government, employers and trade unions, as well as education and training providers.

The true test lies ahead, in designing concrete actions to tackle the skills challenges facing Peru. Government cannot achieve better skills outcomes alone, so moving from diagnosis to action will require a whole of government and a whole of society approach.

The OECD stands ready to contribute to Peru’s ongoing efforts to achieve its ambitious goals in designing and implementing better skills policies for better jobs and better lives.

Links:
OECD Skills Strategy Diagnostic Report: Peru
Executive Summary (English)
Executive Summary (Spanish)
OECD Skills Strategy
OECD Skills Outlook 2013: First results from the Survey of Adult Skills
OECD Skills Outlook 2015: Youth, Skills and Employability
A Skills Beyond School review of Peru, 2016
For more on skills and skills policies around the world, visit: www.oecd.org/skills
Photo credit: Man measuring SKILLS @Shutterstock