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G20 Ankara: Increasing Investment in Human Resources

 

Remarks by Angel Gurría

Secretary-General, OECD

G20 Labour and Employment Ministers Meeting

Ankara, Turkey

4 September 2015

 

Distinguished Ministers,

Ladies and Gentlemen,

 

I am particularly pleased to introduce this session of the Ministerial as boosting investment in human resources is a key pillar of a successful strategy to foster the G20 inclusive growth agenda.

 

The G20 Skills Strategy, in this regard, is a very timely initiative.

 

An effective national skills strategy is essential to achieving sustained and inclusive growth. A skilled workforce is a critical driver of innovation, higher productivity and growth. Assuring broad access to quality education and training is also a key to making it possible for all groups in the workforce to find work that is productive and rewarding.

 

This requires that the right skills be developed, but also that these skills are productively employed. There is much room for improvement on that score:
 

  • The OECD’s PISA survey of 15-year-olds shows that a distressingly high share of youth are not developing fundamental skills: more than two in five youth in Argentina, Brazil, Mexico and India have very low reading skills (PISA Level 1 or below).
     
  • Similarly, the OECD’s PIAAC survey shows that more than one in four adults in Italy and Spain have very low literacy skills, as compared to less than 5% in Japan.
     
  • At the same time, many adults with good skills are unable to find jobs that make full use of those skills. More than one in four workers in Australia and Russia report that they are over-skilled for their jobs.

 

The need to do better in developing and using skills is clear but this will only be accomplished if a coherent skills strategy, closely involving the social partners, is in place to ensure effective coordination of education, training and employment policies at a national level. The G20 skills strategy provides an extremely useful blueprint in this respect. It is built around a set of three actionable policy principles.
 

  • First, focusing on acquiring and building foundation skills foreconomic and social success and maintaining or enhancing those skills throughout life.
     
  • Second, encouraging firms to invest in skills so that they create more productive and rewarding jobs.
     
  • Third, ensuring that skills are fully used through better activation and matching of skills.

 

In addition, it is essential that broader labour market settings provide the right incentives for skill acquisition and better skills use.

 

Skills and training is a complex policy area where the international exchange of policy experience is especially valuable. Promising and inspiring initiatives are being implemented across the G20 such as the ambitious Pronatec programme in Brazil, whichis undertaking a historical expansion of its vocational and technical education system. South Africa is investing in a better information system about skills needs, supply and demand in the labour market to guide its human resources development. In the United Kingdom, the Investors in People programme helps organisations to grow, improve their performance and people management with a view to improve skills use.

 

Accordingly, I congratulate you in taking the initiative to put in place a Skills Strategy within the G20 process and confirm that the OECD, based on the experience it has gained with developing its own Skills Strategy, looks forward to supporting you in making this a great success.

 

It is also time to implement a quantifiable target to improve youth employment outcomes.

 

Policy makers must give a very high priority to improving employment outcomes for youth. Failure to do so undermines future growth prospects and lowers well-being.

 

It is particularly important for governments to reduce the number of youth who leave schooling without mastering basic skills; they are at a high risk of becoming disconnected from the labour market. For example, 30% of Spanish young people aged 15-29 who have not completed their secondary education are neither in employment nor in education or training (so-called “NEETs”), as compared with only 16% of young people who earned a tertiary degree. It is particularly important to minimise the number of low-skilled NEETs who are at greatest risk of becoming trapped in chronic unemployment or underemployment, such as employment in the informal economy.

 

Interesting initiatives are ongoing in many countries to reduce the number of young NEETs. One of these, among several others, is the recent EU Youth Guarantee which seeks to ensure that all young people under 25 are offered a job, an apprenticeship, a traineeship, or a place in continued education within 4 months of leaving formal education or becoming unemployed. Other countries have shown that intensive and comprehensive second-chance programmes for disadvantaged youth can be effective – such as the Job Corps in the United States or the École de la deuxième chance in France.  

 

But getting youth into jobs is not sufficient. The quality of the jobs they obtain is also vitally important. In a number of the G20 emerging economies, a substantial proportion of young workers have informal jobs, ranging from 30% in the Russian Federation to over 85% in India. As informal employment is strongly associated with poor quality jobs, the transition to formal employment as early as possible in the working life of youth is critical for improving their employment prospects both in the short and long term. Several countries have introduced measures to encourage the formalisation of workers, such as Brazil – with the Simples Law – and Mexico – with its Regimen de Incorporación Fiscal.

 

In light of the high economic and social costs associated with youth who are left on the margins of the labour market, the OECD welcomes your discussions of a commitment to a quantitative target for reducing the number of the most vulnerable youth. This could result in a substantial improvement in labour market prospects for millions of young people. The OECD and the ILO have confirmed that there is an adequate statistical infrastructure in place to allow for a quantitative youth target to be properly set and measured. We stand ready to support the implementation of whichever quantitative goals your Leaders will decide to establish as well as to provide advice on policies to achieve these targets.

 

Ministers, Ladies and Gentlemen,

Investing in skills and youth is more than ever key to promote a strong and fairer society and economy. The OECD looks forward to continuing to support you in your work towards this endeavour.

Thank you.