G20 china_web

Sustainable development
Possible economic gains from
21.6
meeting universal basic skills goal
$27TN %
Average amount of GDP used for
social spending in 2014
Jobs,
wealth and individual
well-being all depend on what people know
and what they can do with that knowledge.
There is no shortcut to equipping people
with the right skills and providing them
with the right opportunities to use their
skills effectively. If there is one lesson the
global economy has taught us over the last
few years, it is that we cannot simply bail
ourselves out of a crisis, we cannot solely
stimulate ourselves out of a crisis and we
cannot print money as a way out of a crisis.
Most G20 members can do better when
it comes to equipping people with skills to
collaborate, compete and connect in ways
that lead to better jobs, better lives and drive
our economies forward. If the United States
were to ensure that all students meet the
Sustainable Development Goal of universal
basic skills, measured by the lowest
level of proficiency in the Programme for
International Student Assessment (PISA) of
the Organisation for Economic Co-operation
and Development (OECD), the economic
gains could exceed $27 trillion in additional
income for the American economy during
the working life of these students.
The OECD’s Survey of Adult Skills
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
significant implications for how the benefits
KEY TAKEAWAYS
People need skills to collaborate,
compete and connect
Skills development is more effective
that qualifications-focused education
Every sector needs to foster skills
development and entrepreneurship
of economic growth are shared. Where
large shares of adults have poor skills, it
becomes difficult to introduce productivity
enhancing technologies and new ways of
working, which then stalls improvements
in living standards.
In all countries, adults with fewer
skills are more likely to report poor health,
perceive themselves as objects rather than
actors in political processes and have less
trust in others. Without the right skills,
people languish on the margins of society,
technological progress will not translate
into economic growth and countries cannot
compete in the global economy. Such
competitiveness is particularly important
for today’s youth, who cannot draw on
experience and social networks the way
older people can.
Skills-oriented learning
G20 members need to better anticipate
the evolution of demand for skills. The
coexistence of unemployed graduates on
the street and employers who say they
cannot find the people with the skills they
need shows clearly that more education
does not automatically translate into better
skills, better jobs and better lives.
The dilemma for educators is that the
skills that are easiest to teach and to test
are also the skills that are easiest to digitise,
automate and outsource.
Countries need to put a greater premium
on skills-oriented learning throughout
life, instead of on qualifications-focused
education that ends when the working
life begins. Skills development is far more
effective if the world of learning and the
world of work are integrated. Compared
to purely government-designed curricula
taught exclusively in schools, learning in
the workplace enables young people to
develop ‘hard skills’ on modern equipment
and ‘soft skills’, such as teamwork,
communication and negotiation, all
through real-world experience.
Using such skills effectively explains
a large part of labour productivity. It is
another area where G20 governments
can do better. The lowest hanging
fruit is telling young people more of the
truth about the labour market outcomes
of their educational choices and
incentivising educational institutions
to pay attention to it.
Labour markets and learning
High-quality career guidance services,
complemented with up-to-date information
about labour market prospects, can
help young people make sound career
choices. Ensuring that qualifications are
more coherent and easy to interpret can
also make a big difference. Continuous
certification that incorporates non-formal
and informal learning over the working
life is essential, as is recognition of foreign
diplomas. Labour market arrangements,
including employment protection, can also
facilitate or hinder the effective use of skills
and address skill mismatches.
Countries also need to maintain and
expand the most effective active labourmarket
measures, such as counselling,
job-search assistance and temporary hiring
subsidies for low-skilled youth. We need
to link income support for young people to
their search for work and their engagement
in measures to improve their employability.
None of this will work unless skills
become everybody’s business. This
includes governments, which design
financial incentives and favourable tax
policies; education systems, which foster
entrepreneurship and relevant skills;
employers, who invest in learning and
make the most out of people’s skills; labour
unions, which ensure that investments
in training are reflected in better-quality
jobs and higher salaries; and individuals,
who can take better advantage of learning
opportunities and shoulder more of the
responsibility for learning. G20
154 G20 China: The Hangzhou Summit • September 2016 G7G20.com