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The future of workforce development in Latin America: A regional platform for strategic debate

     The Inter-American Dialogue and the International Network on Social Policy are partnering to advance a high quality, strategic exploration of workforce development needs in Latin America. The topic is critical to the ability of countries in Latin America to break from the middle-income trap and achieve sustained economic growth. The Dialogue brings its multi-level connections and convening power as a highly respected, independent, policy forum including through its newly established Commission on Quality Education for All. The Network brings together some of the top academic and policy experts in the field from around the world. Together, they provide a unique platform to engage policy makers in Latin America in a productive debate on a complex and controversial issue.

     Background. The weaknesses of Latin America’s education systems in producing acceptable learning levels are well known. The PISA assessments, in which 15-year-olds from 65 countries (including 8 in Latin America) participated, suggest that a majority of youth finish school without the abilities needed to be productive workers – or to continue to postsecondary studies with a solid knowledge base. The situation is likely even worse in countries that did not participate in PISA.

    Reforming the education system is a fundamental and necessary condition to improve the quality of human resources and thus contribute to the improvement of productivity in the region’s economies. At the same time, there are many signals that training and higher education systems are not capable of providing businesses with the human resources necessary for their growth.

    A recent global survey by Manpower Group reveals that Latin America leads the world in talent shortage, and says the problem is getting worse: five of the ten countries in which firms have the most difficulty filling positions in 2014 are in Latin America. Moreover, between 2011 and 2014, there has been a considerable increase in the scarcity of talent in Latin American countries.

    These results are consistent with the findings of the World Bank’s Enterprise Surveys showing that Latin American businesses have greater difficulty finding the skills they need compared to their counterparts in the rest of the world. This difficulty is even greater for companies in the region that have skill-intensive production processes. Gaps appear to be especially serious in STEM disciplines.

    Issues. Training and higher education systems in the region do not seem to have the ability to respond quickly and effectively to changing demands. In a majority of countries, the traditional model of ‘national training institutes’ (funded through payroll taxes) prevails, making it extremely difficult to align training programs with the demands of the private sector. Some countries have developed more innovative mixed-management models, but, in general, their performance is far below that of countries that the OECD considers cutting edge. For the most part, the financing systems of these programs offer little or no incentives for their effectiveness.
    Higher education in Latin America generally follows a rigid model, not prone to innovate program offerings. The relative lack of short-term degree programs oriented towards job opportunities and a bias against non-university technical degrees are features of this rigidity that result in, on average, only 20% of higher education enrollment being in technical-professional degrees.
    The measurement of outcomes is another aspect of the rigidity of Latin American professional training and higher education programs. In contrast to the progress in establishing systems for the measurement of learning at the basic education level, the tendency at the higher education level has been to evaluate the operations of institutions, particularly through accreditation systems. Save a few exceptions, post-secondary education systems have not developed a culture and practice of evaluating results comparable to that at the basic education level.
    Given the trends toward the globalization of production and the increasing economic integration of the countries of the region, the internationalization of higher education is becoming increasingly important as a mechanism both to improve the quality and to facilitate mobility of the workforce. Despite having been on the agenda for discussion for many years, the creation of an environment that fosters international collaboration and cooperation in higher education remains an unfulfilled promise for Latin America. Low mobility of students between countries is just one example.
    In a context of greater technology availability, significant growth in the demand for higher education, and increasing cost pressures, a wave of distance education programs has emerged both in the public and private sectors. However, the regulations to which educational institutions are subject are restrictive, particularly limiting the development of fully virtual programs.
    Workforce development systems in Latin America will need to accelerate their pace of innovation. While there is growing regional consensus that school systems must improve their performance –and agreement that this will require reforms on such controversial topics as teacher policies, for example – there is less consciousness of the weaknesses in training and higher education systems. While debates about low learning levels in basic education systems have risen to prominence in the mass media, debates about the rest of the education system have not.

    The Commission on Quality Education for All. The Inter-American Dialogue has launched a blue-ribbon Commission, co-chaired by former Presidents Lagos from Chile and Zedillo from México, and including twelve, highly respected members from across the region (see list attached). The Commission is scheduled to issue a report by the end of 2015, which will provide a roadmap of policy priorities and actionable recommendations. Addressing the weaknesses in workforce development system has been identified as one of the strategic issues on which the Commission will focus. Given the high profile of the initiative and the Dialogue’s outreach capacity in the region, this is a unique opportunity to put forward ideas on how to improve workforce development systems in Latin America. A concerted effort to bring together solid analysis of bottlenecks, rigorous international evidence on effective programs, and practical policy perspectives from across the region can help informing the Commission’s work and, through it, raise the level of policy debates on the future of workforce development in Latin America.

    The International Network on Social Policy Teaching and Research (housed at the University of Maryland’s School of public Policy) is an organization of about twenty deans and program directors interested in social policy. Every continent except Antarctica is represented. As the group’s name implies, the promotion of cross-national teaching is a significant part of its activities. So, too, is the advancement of research on social policy around the world. (See Appendix 1 for a list of current participants and others who have expressed interest in joining the Network.)

    Proposal. Building on the unique opportunity offered by the Commission and the technical and policy expertise of the members of the International Network, we propose a focused project to generate ideas and proposals for a strategic debate on the future of workforce development systems in Latin America. Unlike the traditional inter-governmental and multilateral bodies, the partners bring both expertise and credibility as neutral actors that can foster a productive debate on this critical issue involving policy makers, business representatives and academics/experts. The goal of the initiative is to inform national level debates by bringing solid analysis and policy ideas from across the world.

    The key elements of the project would be:

1. Policy paper (Spring 2015) Preparation of a short policy paper, analyzing the problem and suggesting possible routes of reforms. Although there are a number of good regional reports on the subject (e.g. IADB’s 2012 report on the ‘disconnected’, the forthcoming OECD Latin American Economic Outlook report), they tend to identify challenges but are often vague on the policy options. The proposed paper would build on this extensive literature and explore policy and institutional bottlenecks faced by countries in Latin America and consider reform options.
   
   The Dialogue would prepare the paper in collaboration with a small group of Latin American and international experts that are members of the International Network on Social Policy. Ariel Fiszbein would be the convening author. The paper would include topics such as the financing and governance of training programs, alternative quality-assurance mechanisms for higher education, and outcome measurement of workforce development systems.
   
   The Network would also serve as an advisory body to the effort, and would organize a peer review process for the report. A set of videoconferences will be arranged, as needed, linking the team working on the report and the Network members.


2. Policy Conference (Fall 2015) Organization of a conference convening about 50-100 experts on workforce and education issues, policy makers, and business leaders, to take stock of reform efforts by countries and discuss alternative paths for workforce development systems in Latin America. The policy paper would serve as the basis for that discussion among these recognized leaders from the region. The conference would be organized as a set of topic-oriented roundtables to facilitate exchange and debate. The goal of the conference is for participants to discuss ongoing reform efforts and consider alternative paths.
   
   The meeting would be held at a Latin American capital (most likely either Bogotá or Lima) with the support of a local sponsor. The conference chair will be either a member of the Commission or a policy leader from the country hosting the conference. If successful, we would explore the potential of this becoming an annual or bi-annual event at which people from across the region share new ideas and experiences on workforce development initiatives.


3. Final report (Late 2015) Based on the outcome of the conference, a final report will be prepared and presented to the Commission.
   
   

Members of the Commission for Quality Education for All:
*Ricardo Lagos, Co-Chair, Former President of Chile

*Ernesto Zedillo, Co-Chair, Former President of Mexico

*Epsy Campbell Barr, Member, National Assembly (Costa Rica)

*Cláudia Costin, Senior Director of Education, World Bank (Brazil)

*Gerardo della Paolera, Professor, Universidad de San Andrés (Argentina)

*Sergio Fajardo, Governor, Antioquia (Colombia)

*Claudio X. González, President, Mexicanos Primeros (Mexico)

*George Gray Molina, Chief Economist for Latin America and the Caribbean, UNDP (Bolivia)

*Felipe Ortiz de Zevallos, President, Grupo Apoyo (Peru)

*Salvador Paíz, President, FunSEPA (Guatemala)

*Viviane Senna, President, Instituto Ayrton Senna (Brazil)

*Emiliana Vargas, Chief of the Education Division, Inter-American Development Bank (Venezuela)

*Elena Viyella de Paliza, President, EDUCA (Dominican Republic)

*José Weinstein, Director, Doctoral Program in Education, Universidad Diego Portales (Chile)

*Ariel Fiszbein, Executive Director of the Commission (Argentina)