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Knowledge and Skills

How do we achieve sustained growth? Through human capital, and East Asia and the Pacific proves it

Michael Crawford's picture
Students at Beijing Bayi High School in China. Photo: World Bank


In 1950, the average working-age person in the world had  almost three years of education, but in East Asia and Pacific (EAP), the  average person had less than half that amount. Around this time, countries in  the EAP  region put themselves on a path that focused on growth  driven by human capital. They made significant and steady investments in  schooling to close the educational attainment gap with the rest of the world. While  improving their school systems, they also put their human capital to work in  labor markets. As a result, economic growth has been stellar: for four decades  EAP has grown at roughly twice the pace of the global average. What is more, no  slowdown is in sight for rising prosperity.

High economic growth and strong human capital accumulation  are deeply intertwined. In a recent paper, Daron Acemoglu and David Autor explore  the way skills and labor markets interact: Human capital is the central  determinant of economic growth and is the main—and very likely the only—means  to achieve shared growth when technology is changing quickly and raising the  demand for skills. Skills promote productivity and growth, but if there are not  enough skilled workers, growth soon chokes off. If, by contrast, skills are abundant and  average skill-levels keep rising, technological change can drive productivity  and growth without stoking inequality.

Skilled workforce and strong R&D keys to Thailand 4.0 success

Dilaka Lathapipat's picture



Several of the government’s recent economic initiatives have the potential to kick-start Thailand’s economy. To achieve the economic transformation it has been aspiring for, having a skilled workforce and much more strategic investments in research and development (R&D) will be important.

Following nearly four decades of impressive economic growth at 7.7 percent, the Thai economy has slowed sharply to 3.3 percent over the last decade from 2005-2015. At this rate of growth, it would take Thailand well over two decades to achieve high-income status.

A new World Bank report “Getting Back on Track: Reviving Growth and Securing Prosperity for All” cites that a main reason for the slowdown is a loss of competitiveness.

Ten years ago, Thailand was ahead of its neighbors and peers on virtually all the competitiveness indicators tracked by World Economic Forum in its Global Competitiveness rankings.

Today, other middle-income countries have caught up, while more advanced economies in the region have surged further ahead, particularly in technological readiness, higher education and training, innovation, financial market development, institutions, and business sophistication.

The fumble that may have saved his life

Alexander Ferguson's picture



Ahmad Sarmast may owe his life to a fumble with his cellphone. He bent down in his seat to pick up his mobile just as a suicide bomber detonated his charge behind him at a music and theatre performance at the Institut Français d’Afghanistan in Kabul.

The founder and director of the Afghanistan National Institute of Music survived the December blast that killed one and injured more than 10. Dr. Sarmast suffered perforated ear drums and shrapnel in the back of his head.  But the experience has not deterred him from his ambition of reviving and rebuilding Afghan musical traditions through establishing and leading the country's first dedicated music school.

“Music represents the right to self-expression of all the Afghan people,” he told me during a tour of the modest building in a suburb of Kabul where ANIM is housed.

girl playing piano

The institute’s young musicians, many of them former street vendors or orphans, have toured the world to showcase Afghan music and present a more positive face of the war-torn country. An ensemble played at the World Bank in 2013 and went on to perform amid great acclaim at the Kennedy Center and Carnegie Hall in New York.

A perfect match: job fair bridges employers with employees in Bangladesh

Ahamad Tanvirul Alam Chowdhury's picture
Collaboration between industries and institutes increase job placement
Out of the 2,000 applicants at the job fair, 1,220 received offers.

After completing a course on becoming a beautician from the Ahsania Mission Training Center, Sonia Akter wondered how she would use her newfound skills to find employment. Luckily, she attended a job fair organized by STEP and quickly started a new career. “At the job-fair, I got an offer to join as a beautician in one of the beauty parlors. I accepted the offer and currently earning BDT 6,000 a month. “

Sonia is not alone. Out of the 2,000 job seekers who submitted their CVs, employers committed to hire an astounding 1,220 employees. Nazma Akter joined at Maroof Tailors & Cloth Store as a tailor, Md. Junayed Islam joined Voice Mail Mobile as a cell phone service technician, Pulok Roy joined Sigma Digital Electronics as an electrician, with each of them are earning currently around BDT 7,000 per month!

Career development is not just about what someone knows. It is also about how they sell their knowledge and skills to the job market and opportunities to engage with potential employers. Realizing the changing job market and help graduates seek competitive jobs matching their skills and interest – Skills and Training Enhancement Project (STEP) is organizing job fairs to boost the Technical and Vocational Education and Training (TVET) in Bangladesh.

A sizeable gap still exists between the employers’ requirement and the curriculum of the vocational training institutions in Bangladesh.The STEP project aims to provide linkages between the job market demand and student’s skill set. Many students who completed short-training courses or job seeking graduates benefited by communicating directly with the employers at the fair. Through job fairs, STEP has promoted the relationship between the job seekers and potential employers and helped them to understand the market demand and supply of the required knowledge and skills.

Strawberries, Chocolate and Skill Gaps

Priyam Saraf's picture


Technological changes and globalization have transformed the kind of skills required of workers in many sectors of the economy.  Yet, with employment opportunities becoming more fluid, it has also become harder to predict the skill content of next year’s jobs than it was when Korea, Malaysia and Singapore industrialized through industrial and training policies.

It is in this context that skill gaps have entered public discourse. Employers around the world routinely report large skill gaps and warn of dire consequences for industrial competitiveness if they are not filled. Governments, from India to the United States, have taken up this call.
 
How do employers identify these "skill gaps"? What does this mean for skills delivery systems around the world? These questions were recently discussed at a conference at the World Bank Group in Washington on "New Growth Strategies." Here are some thoughts we presented to kick off that discussion.
 
That the skills gap narrative has become so prominent in recent years does not sit well, for five reasons.
 
  • First, as the 2013 World Development Report reminds us, the world is overflowing with educated workers, many of whom are unemployed or underemployed.
  • Second, the wage returns to secondary education have been falling in many countries. Secondary attainment is the education level most critical to the performance of production tasks in most internationally tradable sectors.
  • Third, vocationally trained workers often do not find jobs.
  • Fourth, employers often don’t act as if there is a skill gap: In many internationally competing sectors, they do not cast a wide net in search of skilled workers, and retention rates are low.
  • Fifth, the high-employment tradable sectors are not very education-intensive. In most economies, workers in agriculture, fishing, forestry, textiles, garments, furniture, food processing and leather-goods production are among their country’s least educated.

 
So, why does this cacophony over skills gaps arise and how can we design skill-development systems that are robust to it? 
 
The confusion arises because we have perverse incentives in place. When we ask employers to identify skill gaps, we do not usually ask them to bear, or even consider, the cost of training workers. This is much like asking them whether they prefer strawberries or strawberries covered in chocolate, without asking them to pay extra for the chocolate.  They therefore routinely report a crippling shortage of chocolate. Yet, behind this strange exercise, there are some industries that are actually seriously skill constrained and there are other industries that are not skill constrained. The way we ask the question simply does not induce them to differentiate themselves.

Professor Bhagwati on a Knowledge Platform on Migration and Global Development

Dilip Ratha's picture

As I had mentioned in my blog on December 7, we at the Bank are working on a proposal to create an open knowledge platform on migration and global development. The proposed knowledge platform will: 

  • provide an open platform for debate and discussion; it will include divergent views, but with strong emphasis on rigor, peer review and quality control
  • act as a knowledge broker
  • attract researchers and practitioners from different disciplines
  • deliver a menu of policy options on migration

We asked Professor Jagdish Bhagwati for his thoughts on the knowledge platform. He likes it! He kindly agreed to record a video presentation for us (you can view it here).

Thank you Professor Bhagwati!

Stepping out of the comfort zone

Sudharshan Canagarajah's picture

Knowledge product innovation in ECA: The case of MIRPAL

It is almost eighteen months since World Bank Europe and Central Asia (ECA) region launched a program of knowledge sharing in the post crisis environment for countries heavily dependent on remittances and looking for ways to address the

vulnerability that emanated from the global economic crisis. For many Commonwealth of Independent State (CIS) economies in ECA region, which had seen high economic growth rates on the back of Russia’s economic boom, the global crisis and its impact on trade and remittance flows was an important shock. For many, neither the neither magnitude, nor trends of the remittance shock was clear, because the research and policy response has been very limited.

Brain drain, brain gain or brain same? The effect of European accession on human capital formation

With remittances expected to fall in 2009 as the financial crisis unfolds, the primary mechanism through which origin countries recoup the efficiency increases achieved by skilled migration will dissipate.  But is there another mechanism, less direct but with long-term implications, through which migrants can benefit their home country.

The notion of the brain drain from developing to developed countries is not new. What is relatively new in the ’new brain drain’ or ’brain gain’ literature is its positive prognosis regarding the economic implications of labor market liberalization.  Yes there is a brain drain and on the whole it is bad for development.  But the migration of skilled workers need not be a zero sum game.  That is, the gain of the host country need not inevitably translate to the loss of the sending country. 

Crisis and Immigration: Is demand for migrant workers falling in the US?

Sonia Plaza's picture

This is the first year that the H-1B visa cap has not been reached during the first 5 days of filing applications. The current cap is set at 65,000, with an additional 20,000 for holders of advanced degrees. It seems that the number of petitions for the H-1B visa this year will be far less than last year. The U.S.


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