Upgrading workers’ skills key to global competitiveness

MANILA, Philippines - Developing economies like the Philippines  should empower their labor force with  the right skills and knowledge to improve global competitiveness and rise through value chains, a top official of the World Trade Organization (WTO) said.

“I am a firm believer – contrary to conventional wisdom which often highlights natural resources and the presence of extractive industries as a measurement of wealth.  The wealth of developing countries is in their people,” said WTO director-general Pascal Lamy

“I see people as the main resource which developing countries have – an investable, flexible, and evolving resource. Upgrading skills is an important component of this investment in people,” said Lamy on the sidelines of   the Fourth Global Review of Aid for Trade held in Geneva, Switzerland.

Skills determine economic growth and countries’ ability to move into new export markets and absorb new technologies, he added.

The WTO has analyzed data assessing the main barriers that small and medium-sized enterprises (SMEs) from developing countries face when entering or moving up value chains.

The data show that skills gaps are a major deterrent to the success of SMEs.

“Labor force skills are highlighted as a main constraint by about 45 percent of developing country suppliers in the tourism, textiles and apparel and ICT value chains and by 38 percent of suppliers in the agro-food chain,” Lamy noted.

This gap, he said, can be bridged by looking into the national education system and the vocational education and training system of these economies.

“Those systems need to be able to provide school leavers and graduates with the knowledge, skills and attitudes in demand by employers. They also need to be flexible enough to adapt to global markets characterized by rapid technological change and high levels of innovation,” said Lamy.

Giving technical assistance in the area of education and training can provide SMEs in developing countries with access to necessary skills. “The simple equation is that the greater their access to the right skills, the greater their chances to enter or move up global and regional value chains,” the executive said.