How universities can respond to the new demands of the labor market and society

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Every moment- but most especially today- we should celebrate young people and the great potential they have. Happy International Youth Day!

I’ve been fortunate to meet and talk to several bright young people in my work. Last May, on the sidelines of the Bologna Ministerial Conference in Armenia, I had a chance to visit the (World Bank-supported) Simulation Center at the Yerevan State Medical University. My colleagues from Armenia and I observed how mannequins connected to a computer simulated medical situations where students would work on a dummy and it would ‘respond’ to them by closely mimicking the reactions of real-life patients. The university rector, Professor Narimanyan, explained that this innovative method allows students to upgrade their practical skills and reduce the number of mistakes they could potentially make in their medical careers.

I think that this university center is a good example of how to improve the practical skills of graduates and foster innovation, which is needed, not only in Armenia but worldwide.

In 2000, the Europe and Central Asia region was the fastest growing region among emerging economies and economic growth was accompanied by stronger growth in labor productivity. However, the economic crisis has made the issue of employability even more pressing and it’s time to consider what higher education systems and institutions can do to strengthen the links in between tertiary education and the labor market.

The importance of skills

A key factor for both labor force participation and labor productivity is skills.  It is common knowledge that due to the impact of fast-emerging – and often ICT-related - technologies and changes in the organization of work, jobs that involve routine tasks that are easy to automate are disappearing, while new employment creation involves tasks demanding skills that are non-routine (e.g., analytical, creative, interpersonal) and that humans are still better at than machines.

As labor force surveys and recent World Bank reports have shown, younger workers are – in principle - coping better with these shifts in the demand for skills, while there is a concern that older workers may be at higher risk of suffering from skills obsolescence. However, as we know from PISA, many education systems find it challenging to prepare young people for this new world.

Education is still often characterized by rote learning and repetition instead of teaching to reason and focusing on problem-solving skills and real-world issues. This certainly applies to primary and secondary education but it is also a problem for tertiary education. Thus, skills have become a severe constraint to growth and employers have highlighted this on various occasions.

Tertiary education has an important role to play

The question for us today is how can tertiary education systems respond to these challenges and play a stronger role in preparing young people for the labor market?

Tertiary education can be a powerful engine for building a better society, for productivity and growth. It contributes through the production of advanced knowledge, skills and competences, through basic and applied research but also through its so-called ‘third mission’ – a wider service to the community. It needs to function as a system of connected actors: institutions interact with each other, employers, and companies, research institutions but also earlier education providers. If these connections don’t work, it is difficult for universities to live up to their potential.

It is also important for universities to prepare and retrain professionals for a world where demand for routine work is systematically disappearing, as machines and ICT are replacing workers. Demand for more elaborate design thinking yet, is still on the rise. Thus, besides an initial education and training function on the tertiary level, universities can and indeed should also play an important role with regard to lifelong learning.  

Connecting universities to the labor market

Good quality information is another area which is critical for connecting universities to the world of work. Curricula need to be based on agreed generic and professional or technical learning outcomes – developed jointly by the higher education sector, employers and other key stakeholders - and institutions needed to support students through practical placements, internships, career guidance and labor market information. This seems overly evident but often such provisions are not in place and students are left on their own.

I would also like to mention bridging programs in the context of employability, i.e. programs which help academically less prepared students – sometimes with previous work experience - to get a better start at university by building a bridge between their current level of preparation and the university experience. Such programs can contribute significantly to the success of the learner and also to his or her future career. One example is the bridging program under the World Bank Secondary Education project in Romania.

Overall, there needs to be appropriate governance, management, financing and quality assurance systems in place in order to enable universities to fulfill their missions concerning societal and labor market demands. In addition, there is a multitude of specific measures which can increase employability at the institutional level – an area which becomes increasingly important for World Bank clients and to which the World Bank contributes through advisory work and operations
Follow the World Bank Group education team on Twitter @wbg_education .
For more information about the World Bank and tertiary education, please visit our website.


Claudia Costin

Founder, Innovation and Excellence in Education Policies (Think Tank)

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