Global economies under the spotlight

BRICSsmallWhile companies cannot fill vacant jobs due to a lack of available skills, there is increasing unemployment and many qualified people cannot find jobs.

This dichotomy was debated at the British Council Going Global conference last year, with some speakers saying higher education should be more focused on the needs of economies and others saying that higher education institutions should be determining and shaping economies.

The British Council said countries were looking to reform their education systems and improve their economies and asked what role universities should play. “Should educational institutions have an active and leading role in the development of their local economy or just be a provider of knowledge and skills?” it asked.

Tracy Ferrier, Global Skills Lead at the British Council, asked panelists whether education should shape an economy or follow it. Mike Dawe, Director of International at the UK-based City and Guilds group, said the skills gap problem is global. He said skills challenges are going to increase as the labour market, specifically in Western economies, is going to be changing, with increases in redundancy and automation.

“There tends to be an oversupply of workers, yet supply struggles to keep pace with demand and there is a skills shortage.”

The future of the global labour market is one where jobs are not where people are, so there will be huge labour migration to where the jobs are. There is already mass migration of skilled people and about 232 million people, or 3.2% of the world’s population live and work abroad. A willingness to work abroad has become the new norm, he said.

While there may be national labour policies, there are none globally. In the UK, for example, in run up to the financial crisis, the policy to increase skills was aimed at boosting GDP. In South Asia, policies relating to labour have had significant effects. In this region there is competition for remittances from people working overseas and in Bangladesh and Sri Lanka, about 10% of GDP comes from reliance on people working elsewhere. Bangladesh’s previous policy against English as a medium of instruction (which has since been reversed) limited its people’s ability to work overseas.

It was no coincidence, said Dawe that in Sri Lanka, which had the opposite policies, money remitted home per person was over $6000 a year while in Bangladesh it was $1500. The problem is that national governments have the ability to shape the economy against a global economy which is not regulated. International companies and industries do, however, have an interest in a regularised labour market and this often results in global standards and qualification requirements.

These are centred on qualifications and assessed outcomes. “If you are employing someone 3000 miles away, having a signal of their qualifications is useful.”

This means it is increasingly important for countries’ higher education systems to provide certificates which are portable and stackable … education policies need to be outward looking and need to make use of international levels.”

For countries wishing to attract foreign investors, they need to show they have skills operating to an international standard. Amita Baviskar, Professor of Sociology at the Institute of Economic Growth in Delhi, India said movements of capital, labour, goods and ideas have increased.

“Certain places at certain times have benefitted, for example, India and the IT revolution in the 1990s.  This happened because of 40 years of state investment in technology education.”

In Bangalore there had been government-sponsored investment in education and English language competence which allowed India to benefit from the huge demand for software development. While this created an IT boom in India, there were signs of this ebbing as there are shifts to cheaper countries. India’s IT engineers now find themselves scrambling in an “uncertain ocean of opportunity,” indicating India may have created overcapacity.

Baviskar said if education follows the economy, as it has with the increase in private colleges and universities in India focusing on engineering and medical courses, this is beyond the reach of most Indians. “We see a progressive squeezing out of the liberal idea of education – the nurturing of life skills.”

She said there is a growing realisation that social sciences and humanities students and graduates have appreciation of changing contexts not defined in disciplinary boxes. “These qualities are best nurtured by keeping education somewhat autonomous from the economy.”

Bill Glew, Director of Professional Engineering at Aston University in the UK, said education should not shape the economy but should be there to serve people, society and the economy. He said education is expensive and people need to be employable at the end of it, and that “if we retreat to say the role of universities is to decide, it is a backward step. The system should be shaped by the needs of the economy … we have to embed education within the world of work.”

“Education needs to work with industry and stop looking down at industry,” he said.



DHET News is the online home for news generated by the Department of Higher Education and Training's e-bulletin.

Posted in February 2017

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