Skills for productivity and growth
Wednesday, 9 December 2009
Saquib Mustafa
SMALL government with reduced role is desirable everywhere in the era of market economy and free enterprise. Government's role has conceptually shrunk under market economy. Nonetheless, there are areas where the government should play a bigger role to ensure higher economic growth. One such area remains creation of facilities for the development of skills of working-age population. Skills do enhance employment prospects, institutional or for self-employment. These also help improve productivity of workers. Skilled manpower can step up economic growth.
The government needs to spend more for skill development as the private sector usually does not invest in this area due to slow or no returns. High cost of skill training also discourages the private sector from investing in the area. The inability of the workers to pay for the training in the developing economies does not motivate the private sector either. In developing countries, the government, therefore, must not shy away from this unavoidable responsibility.
Bangladesh appears to have made modest gains in human development as the UN report on South Asia on the issue indicates. But the progress leaves much more to be done by way of creating the facilities for education and skills training of the workforce. And it must be done under government auspices.
The existing opportunities for skills and vocational training in the country are rather limited. The government runs fewer polytechnics and other training facilities than needed. There needs to be a rapid expansion of the training facilities and programmes. In the long run, returns would be much higher than the expenditure.
But the government has to do with vision. A market survey would make it clear what sorts of skills the domestic and the international labour markets need. The training institutes and programmes could be developed according to the demand. A good deal of work has been done under a programme aided by Bangladesh Investment Climate Fund, in this connection. But unfortunately no thing substantive has come, following the recommendations of a related study.
There is no denying that the investment from the government would result in higher productivity and economic growth. The government can provide the training free of costs or at nominal fees. But, it can, later, realise the training fees, in instalments, only when a trained worker starts earning.
This model of skills training would serve several objectives. First of all, the young in far bigger numbers would get the training opportunities. It would keep the training cost relatively lower, compared to what private sector trainers could change. Affordable training at government institutions will create the needed trained workforce, capable of efficient economic activities. Institutional and self-employment opportunities, it would create, would be a boon for the economy. Worker productivity would increase to benefit the economy.
SMALL government with reduced role is desirable everywhere in the era of market economy and free enterprise. Government's role has conceptually shrunk under market economy. Nonetheless, there are areas where the government should play a bigger role to ensure higher economic growth. One such area remains creation of facilities for the development of skills of working-age population. Skills do enhance employment prospects, institutional or for self-employment. These also help improve productivity of workers. Skilled manpower can step up economic growth.
The government needs to spend more for skill development as the private sector usually does not invest in this area due to slow or no returns. High cost of skill training also discourages the private sector from investing in the area. The inability of the workers to pay for the training in the developing economies does not motivate the private sector either. In developing countries, the government, therefore, must not shy away from this unavoidable responsibility.
Bangladesh appears to have made modest gains in human development as the UN report on South Asia on the issue indicates. But the progress leaves much more to be done by way of creating the facilities for education and skills training of the workforce. And it must be done under government auspices.
The existing opportunities for skills and vocational training in the country are rather limited. The government runs fewer polytechnics and other training facilities than needed. There needs to be a rapid expansion of the training facilities and programmes. In the long run, returns would be much higher than the expenditure.
But the government has to do with vision. A market survey would make it clear what sorts of skills the domestic and the international labour markets need. The training institutes and programmes could be developed according to the demand. A good deal of work has been done under a programme aided by Bangladesh Investment Climate Fund, in this connection. But unfortunately no thing substantive has come, following the recommendations of a related study.
There is no denying that the investment from the government would result in higher productivity and economic growth. The government can provide the training free of costs or at nominal fees. But, it can, later, realise the training fees, in instalments, only when a trained worker starts earning.
This model of skills training would serve several objectives. First of all, the young in far bigger numbers would get the training opportunities. It would keep the training cost relatively lower, compared to what private sector trainers could change. Affordable training at government institutions will create the needed trained workforce, capable of efficient economic activities. Institutional and self-employment opportunities, it would create, would be a boon for the economy. Worker productivity would increase to benefit the economy.