Skills accumulation is key to sustain economic growth

Jobs are the cornerstone of development. Jobs boost living standards, raise productivity and foster social cohesion.

One of the main forces behind increases in an economy’s per capita output is by making people more productive. The acquisition of skills, also known as human capital accumulation, allows people to do more using the same amount of capital.

The private sector plays a key role in creating new jobs needed and fostering economic growth. Therefore, it is crucial to understand the constraints that prevent the economy from creating jobs.

Perhaps one of the key challenges for us would be to address the skills mismatch. It is vitally important to align the skills taught with the skills needed. This would require bringing together various stakeholders, including policy makers, private companies, universities, training providers and the youth themselves to assess the current and future skills needs to sustain economic growth.

One of the key lessons from some of the successful countries that have attracted large sums of FDI indicate that in most cases it was all to do with a nation’s ability to provide a skilled human resource base and also the ability to continuously build the right skills and competencies of the talent pool.

Invest more in skills accumulation

Therefore, we must continue to invest more and more in our human resource, since the high growth industries of the future such as information technology and biotechnology industries, require an increasingly skilled labour force.

The further we move into the current decade, the more pressing becomes the need for high order skills and also for a new way of understanding what skills and education really means. It calls for a new way of understanding the relationship between practical skills and knowledge management. Therefore, developing our work force skills would be one of the best means to sustain high levels of economic growth.

Singapore had many initiatives in the education system to support the national strategy for competing globally for talent. For example the Government had partnerships among industry, and the education sector to have training or learning centres that provided globally recognised certification programs. Then the Government had targeted investment in talented students. They sent them to top universities around the world and then brought these people back to train others and run their best learning institutions.

Innovation and learning institutions

The next area that is closely linked to skills accumulation is innovation. Big productivity gains for an economy can come only from innovation.

For example, the Singapore Government invested a lot of capital to create the most conducive environment for innovation. As a result they have been quite successful in producing a complete eco system for research and development to promote innovation. That has helped them to raise productivity, cut costs and improve efficiency. Therefore, some of our learning institutions must be strengthened to focus on research and development, they need to codify what people have done are doing.

The best learning institutions look at the challenges their students are likely to face and then create deliver mechanisms to respond to those challenges. These institutions have permeable boundaries between industry and academia so that teaching focuses on learning solutions not just reporting of research.

The Government therefore can set policies that encourage investment in talent. The private sector then can offer opportunities for talent to learn and grow by combining learning with on-the-job -training.

Also, when a Government underwrites learning and development opportunities, the private sector can invest resources without fear to support a national strategy to build an employable talent pool.

We also need to be mindful of the growing prevalence of technology. The impact will be everywhere and will continue to challenge several industries and jobs, but also create a lot of new industries and opportunities.

Therefore, it makes perfect sense for all our stakeholders (public and private) to work together to ensure that the skills taught in the country are aligned with the skills needed for our economy to grow. This would help the economy to improve productivity and produce more quality jobs for our youth.

  (The writer is a Senior Company Director and has extensive local and international experience in helping organisations to build; capabilities of leadership, knowledge management, performance, and talent.)