Jobs, wealth and individual well-being depend on what people can do with what they know. There is no shortcut to equipping people with the right skills and to providing them with opportunities to use their skills effectively. If there's one lesson the global economy has taught us, it is that governments cannot simply spend their way out of a crisis.
We can do much to equip more people with better skills to collaborate, compete and connect in ways that lead to better jobs and better lives. The OECD's Skills Outlook released in October 2013 shows that poor skills severely limit people's access to better-paying and more-rewarding jobs. It works the same way for countries: the distribution of skills has implications on how the benefits of economic growth are shared. Put simply, where large shares of adults have poor skills, it becomes difficult to introduce productivity-enhancing technologies and new ways of working, which stalls improvements in living standards.
Skills affect more than earnings and employment. Adults with low skills are far more likely to report poor health, perceive themselves as objects rather than actors in political processes, and trust less in others. In short, without the right skills, people will languish on the margins of society, and economies will be unable to grow to potential.
Today's youth, who cannot compete on experience or traditional social networks in ways that older people can, are particularly vulnerable. While young people with advanced skills have weathered the crisis reasonably well since 2008, those without fundamental skills have suffered. Indeed, unemployment among young people without a high school education soared 20% in Estonia and Ireland and 15% in Greece and Spain. The short-term impact on individuals, families and communities beg for urgent policy responses; the longer-term scars, in terms of skills loss and de-motivation, will affect not only the recovery but long-term potential too.
But there is good news. What is often overlooked amid the grim statistics is that a few countries, like Austria, Chile, Germany and Korea, saw a sizeable drop in unemployment rates among their youth. With the right policies and economic environment, these countries have proven success along three lines: build the skills that foster employability; give young people the opportunity to make their skills available to the labour market; and ensure that those skills are used effectively at work.
We need to put a premium on skills-oriented learning throughout life instead of on qualifications alone. The OECD's Learning for Jobs studies, which have been under way since 2010, show that skills development is far more effective if the world of learning and the world of work are integrated. It is not difficult to understand why. Skills that are not used will atrophy. And, compared to purely government-designed curricula taught exclusively in schools, on-the-job learning allows people to develop "hard" skills on modern equipment and "soft" skills, such as teamwork, communication and negotiation, through real-world experience. Workplace training can also help to motivate young people and stoke their interest in education.
Nordic countries, the Netherlands and Canada, for example, have been much better at providing high-quality lifelong learning opportunities, both in and outside the workplace, than other countries. They've developed programmes that are relevant to users and flexible, both in content and in how they are delivered. They've made information about adult education opportunities easy to find and understand, and provide recognition and certification of competencies that encourage adult learners to keep learning. They've also made skills everybody's business, with governments, employers, and individuals all involved.
Building skills is the easy part. Providing opportunities for young people to use them is far tougher. Employers need to offer greater flexibility in the workplace. Labour unions need to reconsider how employment protection for permanent workers can be adapted to benefit job seekers too. Long trial periods are needed to enable youths to prove themselves and facilitate a transition to regular employment. And some countries need to lower the minimum wage for younger workers, making it easier for low-skilled young people to get their first job and discouraging drop-outs (by lowering the opportunity cost of staying on at school).
Last but not least, we need to ensure that talent is used effectively. High-quality career guidance services, complemented with up-to-date information about labour-market prospects, can help young people make sound career choices, reduce mismatching and avoid dead-end jobs. Policymakers also need to maintain and expand the labour-market measures which have proven effective, such as counselling, job-search assistance and temporary hiring subsidies for low-skilled youth. In addition, income support should be linked to searching for work or other efforts to improve their employability.
The steps outlined here are not complicated, but require leadership and determination on all sides: governments to design financial incentives and favourable tax policies; education systems to foster entrepreneurship and provide vocational training; employers to invest in learning; labour unions to ensure that investments in training are reflected in better-quality jobs and higher salaries; and individuals themselves, to take better advantage of learning opportunities and shoulder more of the financial burden. It's time for all of us to take the lessons we learned from the crisis and turn them into a sustainable, practical, plan to give our young people the prosperous future they deserve.
Andreas Schleicher is the Special Advisor on Education Policy to the Secretary-General of the OECD, and Deputy Director for Education and Skills.
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OECD's 2014 Forum on May 5-6 will reflect on our vision for Inclusive Growth that combines a focus on strong economic performance with outcomes that matter for people's quality of life.
©OECD Yearbook 2014