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Sunday Sep 22, 2024
Friday, 18 July 2014 00:01 - - {{hitsCtrl.values.hits}}
A large share of Sri Lanka’s economy has shifted from agriculture to industry and services. Annual reports of the Central Bank reveal that agriculture shares of GDP declined from 20% to 11% between 2000 and 2013 while industry shares increased from 27% to 33%. The service sector share increased from 53% to 56% leading, to substantial shifts in labour and skills requirements.
The report revealed that even if the country has achieved universal access to education, employers are questioning the system’s quality and relevance. 
The report has found that there is a shortage of skills in demand and a supply of skills that are not market relevant. Sri Lanka is gearing up to rise to the ranks of a higher middle income country with a goal of sustaining annual real GDP growth of at least 8%. The ‘Mahinda Chinthana’ envisages increasing per capita income from $ 2,000 in 2005 to $ 4,000 by 2016. As a result of the skills mismatch, the shortfall of skills in demand in the labour market undermines productivity and challenges Sri Lanka’s growth ambitions.
Supply-demand mismatch
Via an Employer Survey (ES), the author has found that the reasons for the substantial mismatch between education and skills supply and demand in Sri Lanka. A large share of employers is not satisfied with types and levels produced by the Technical and Vocational Education and Training (TVET) system.
Job-specific skills and literacy, numeracy, English and team work and other soft skills are the most important qualifications to retain an employee in the labour market. The report outlined that poor quality and irrelevant TVET programs with outdated curricula, acute shortage of trained staff, and lack of modern technology and also inadequate involvement of employers contribute to the major skills shortage.
Emerging economic sectors and low student demand for some TVET courses disturb the supply of skills to meet the demand. Furthermore, the labour industry has weak links with the labour demand market due to the lack of involvement of employers in the delivery and management of public TVET programs. Inadequate information on the labour market combined with the skill mismatches results in this negative situation.
The significant feature that the surveys (STEP HH Survey) uncovered is that writing, numeracy, teamwork and long-term perseverance are associated with a lower likelihood of being unemployed. Furthermore, technology, computer and presentation skills are associated with lower probability of being underemployed.
When consider the earnings of the labour supply, high education and TVET system has been rising but neither formal nor informal apprenticeship improves wages. The improvement of soft skills is associated with higher wages.
Overcoming the skills mismatch
The labour force has been growing up by 2% since 1990, from six million to 8.46 million in 2012. The working age population is now expected to grow more slowly, from an estimated 13.3 million in 2011 to 13.9 million in 2026, and then gradually decline.
The graduated youth unemployment, low rate of female participation in the labour force and underemployment of educated females and youth add to the unemployed working age population. As a result, the report emphasises on the urgent need to invest in skills development to increase productivity.
The WB report proposed the following strategies to overcome the skills mismatch.
Improvement in the quality of school education with competencies for continuing pre-employment and lifelong learning and or employment will provide significant support to overcome the issue of poor skills supply for the market. The primary focus of the report is on pre-employment training provided by formal TVET and on-the-job training (OJT) provided by firms.
Every year an estimated 140,000 youth complete general education and enter the job market lacking job-related skills in Sri Lanka. The ‘Mahinda Chinthana’ has recognised the potential role of the TVET system to shut the gap. Enhancing the quality and relevance of TVET through the establishment of a demand-driven TVET sector is significant for skills development.
“The National Human Resources and Employment Policy and Skills Sector Development Plan (2014-2020) in the ‘Mahinda Chinthana’ gives priority to obtain the support of confident people (private sector) to identify the required manpower,” said A.R. Desapriya, Additional Secretary, Ministry of Youth affairs and Skills Development at the Report Discussion.
He added that increasing the number of students following TVET programs under the Ministry of Youth Affairs and Skills Development to 200,000 in 2020 is envisaged.
Updated curricula, teacher development, technology and improvement of equipment supply have introduced in the report to enhance the quality of the TVET system. The author also emphasised the urgent need to analyse how NVQ is operating to build course flexibility and greater coverage of institutions within the NVQ system. He argued that it would be private sector participation would be beneficial to manage the institutions.
The time is now
The report proposed to expand the supply of skills, specially advanced skills in emerging economic sectors, and including those working in informal sector. It outlined that the time has come for the Government to make budget allocations to provide incentives to institutions to improve the quality of training and generate non-budgetary resources, reinforce accountability, promote performance for results and offer incentives to firms to train their workers.
The author proposed providing public institutions and training centres more autonomy, while also making them more accountable in terms of performance by linking resources to performance. To develop coordination among the TVET programs and the labour market, the report proposed strengthening national coordination of the TVET with the country’s economic development plan.
The World Bank last month approved a $ 101.5 million credit line to expand the availability of employable workers in Sri Lanka by increasing access to high quality labour market relevant skills development programs. The project supports the Skills Development Program (SSDP) launched by the Government of Sri Lanka as part of its Public Investment Strategy for 2014-16.
