Building the Workforce: the common denominator to infrastructure development. Kailesh Gunesh Soft infrastructure- why is
human capital important –
the 3 Cs
Last frontier/new frontier/
land of opportunities
Workforce Development –
what is about? Education,
training, competencies,
literacies?
Education as a product or
service- lifelong learning and
continuous upskilling
Understanding workforce
needs and understanding
business needs- where is the
middle ground?
Africa’s needs or is it what
the Global Economy needs
from Africa?
Africa is home to the world's fastest-growing
population; there are already 500 million mobile phones in Africa,
with 850 million expected by 2015; Africa's workforce is expected to be the world's
largest by 2035, bigger than both China's and India's; consumer spending is growing in Africa from around
$900bn today to an anticipated $1.4 trillion by 2020. What is also clear is that the
investment "story" in Africa is complex. Only a third of Africa's recent
economic growth is commodity-related. 11 of the 20
fastest growing
economies in
the world by
2017 will be in Africa
27 (22 SSA+5NA)
countries have
already achieved
“middle-Y category”
Diversification of sources of growth
Africa’s growth over the past decade has been driven by natural resources. Resources have contributed less than a third of Africa’s growth since 2000. The rest has come from a range of other sectors, including - agriculture, - manufacturing, - construction and, in particular, - services. These growth patterns are reflected in the overall structure of Africa’s total
GDP (which is this year forecast to break the US$2 trillion mark). During a period in which the size of Africa’s GDP has tripled, natural resources
(excluding agriculture) have made an average contribution of less than 20%,
while services are moving ever closer to accounting for 60% of value added.
2012
800+active
projects with
combined
value of
$700bn
Power -37%
Transport – 43%
Where is Education and Training?
…there has also been
a
notable shift in
perception regarding
which are the sectors
with the
highest growth
potential.
Other sectors in which there has been a no>ceable shi? include ICT (14%, up from 8% last year), financial services (13%, up from 6% last year) and educa>on (which has come from virtually 10% nowhere to register this year). Why is FDI in Africa generating little or no research?
R&D is still an “imported” item Where is the African content in R&D and innovation?
Most jobs created are as a result of knowledge transfer (one-way) instead of
Knowledge Exchange
Focus is still on political risk factors with education and training lagging behind
What will the con0nent be like in 50 years’ 0me? Africa has an abundance of natural resources World’s most youthful con>nent (as a share of total popula>on). Investment in its young people and in the hard and so; infrastructure required for growth Will lead to Africa becoming one of the world’s most dynamic and produc>ve economies, according to a new report from the African Development Bank (AfDB). The ability to take advantage of new technologies will depend largely on human capital A skilled workforce is essen>al for the adop>on of new technologies and for globally compe>>ve produc>on. Access to primary, secondary, and higher-­‐level educa>on in Africa con>nues to increase, and literacy rates are expected to reach 96 percent in 2060, the AfDB says. Challenges of Workforce Development Dual challenge of producing the skills required to achieve sustained economic growth in a rapidly changing global economy Genera>ng employment both for young people joining the labor force and for workers in declining industries. Unprecedented rapid labor force growth in a context where the majority of employment is in the rural and informal sectors and where the modern sector s>ll has limited absorp>ve capacity. Clearly, educa>on has key roles to play in facilita>ng labor force entry for young people and in providing life-­‐long learning for workers. Educa>on alone will not be sufficient to turn the “youth bulge” from being a poten>al danger into an opportunity. If not coupled with policies leading to growth and employment genera>on, the result is shi? from a jobless uneducated “youth problem” to a jobless educated youth problem -­‐ Europe and many Arab States. A few common factors contribu>ng to this progress include: -­‐Coopera>on between government, employers, labor force and non-­‐state stakeholders; -­‐Developing effec>ve systems for assessing skills needs and facilita>ng demand-­‐driven training; -­‐Sustained priori>za>on of WfD by apex-­‐level leadership; -­‐Public sector interven>ons to address market failure and structural inequali>es in access to WfD services -­‐Learning from other countries, even for advanced economies Saber WfD Methodology, World Bank 2012 Youth – the key Youth (aged 15 to 24) cons>tute slightly more than 20 per cent of Africa’s popula>on. • In 2050, youth will cons>tute: • 18.6 per cent of the popula>on in Central Africa; • 18.5 per cent in Eastern Africa; • 18.8 per cent in Western Africa; • 15.6 per cent in Southern Africa; • 13.9 per cent in North Africa. • About 36.8 per cent of Africa’s workforce are youth. • In 2009, the youth unemployment rate was at 11.9 per cent in Sub Saharan Africa and 23.7 per cent in North Africa; par>cularly affec>ng par>cularly young females. • Literacy rates in the region have generally improved. In Over the last two decades, rates for young females rose from 58 per cent to 66.6 per cent, compared to 72 per cent to 78.4 per cent for young men. • In 2007, an es>mated 3.2 million young people were living with HIV in sub-­‐Saharan Africa alone. • More than one out of two deaths among young African females is as a result of AIDS or AIDS-­‐ related illnesses. Saber WfD Methodology, World Bank 2012 Two principal reasons for Africa’s high unemployment rates are: a mismatch between educa>onal systems and the skills needed in the labour market, and the saturated public services and small private sector bases that are unable to employ large numbers of people. Other relevant reasons include labour demand barriers, such as observed discrimina>on by employers towards young people on the grounds of lack of experience; informa>on gaps between job seekers and poten>al employers; and barriers to the crea>on and development of business opportuni>es, par>cularly in gaining access to financial, physical and social capital. Another reason is the lure of white-­‐collar jobs, low status of voca>onal training. Saber WfD Methodology, World Bank 2012 Sub-­‐Saharan Africa can look to Mexico as an example of a commodity exporter that transformed itself successfully into a major manufacturer, or to Brazil for increasing agricultural yields in a tropical environment. One of the most important aspects of the changing demographics will be job crea>on. There are three key aspects to look at: (1) migra>on of manufacturing jobs, (2) crea>on of new service jobs, and (3) protec>onism and local poli>cs. We expect globalisa>on to con>nue and so labour-­‐intensive manufacturing is likely to con>nue its trend of migra>on to lower-­‐cost environments. However, the hard infrastructure is vital as goods and parts need to be transported in and out – this will be especially important in a future with higher energy-­‐related transport costs and with increasingly globalised supply chains Saber WfD Methodology, World Bank 2012 New service jobs are less dependent on hard infrastructure, requires more ‘so?’ infrastructure, with educa>on and communica>ons key inputs. This ‘so?’ infrastructure is o?en much more difficult to put in place but it is possible if there is a long-­‐term plan. Ini>a>ves like the Bolsa Familiain Brazil help to improve the human capital of the country. Improving literacy -­‐ China, which has 99% literacy, and India, which has 75% male literacy but only about 50% female literacy. Of course, trade in services is not simply about Indian call centres. In many ways, it is more about the role of the advanced countries in the developing world produc>on structure. Engineering design in Germany, fashion design in Italy and France, financial services innova>on in the UK and entertainment media in the US, are examples of how the West will need to con>nue to develop its services industries as manufacturing increasingly migrates to Asia Human Capital – Super cycle context as defined by Standard Chartered What’s the super cycle – sustained period of high growth driven by increased trade, investment, growing urban popula>ons and technological innova>on, characterised by the emergence of new economies Key outcomes by 2030 World economy es>mated to be USD 308 tn Emerging economies to contribute 2/3 of world economy Winners: countries with the 3Cs -­‐ Cash -­‐ Commodi>es -­‐ Crea>vity-­‐ human capital An important driver of the super-­‐cycle will be the benefits of past investment in educa>on. Even in the developed countries where there is o?en concern about the quality of new graduates, the percentage of the workforce with ter>ary educa>on will con>nue to rise for several decades yet. In emerging countries, the propor>on of the workforce with basic literacy skills is s>ll rising. Another key element, which is also important for job crea>on, will be increased entrepreneurship. So what is currently happening on the continent?
African diaspora as an increasingly an important source of the investment capital that supports the growth of the middle class. Helping build a new genera>on of universi>es that not only increase competence but foster the growth of the middle class. One example is Ashesi University College in Ghana, started by Patrick Awuah, a former Microso? employee and graduate of the Haas School of Business at the University of California, Berkeley. The college aims to train “a new genera>on of ethical, entrepreneurial business leaders in Africa and to nurture excellence in scholarship, leadership and ci>zenship.” There are similar developments in even poorer parts of Africa. Northern Somaliland, has relied significantly on its diaspora to build ins>tu>ons of higher learning. It started by building the University of Hargeisa, followed by the establishment of Burao University, Amoud University, Somaliland University of Technology, and Gollis University. So what is currently happening on the continent?
The growing contribu>on of African diasporas to the rise of the middle class is reinforced by greater connec>vity and mobility. Direct flights between the United States and west Africa, for example, ease investment flows into the region. Ghanaians working in the pharmaceu>cal industry in the New Jersey area are star>ng to invest in health care in their home country. Similar investment flows and trade linkages will help foster the growth of the middle class in West Africa. Harnessing Diasporas,” F&D, September 2011 So what is currently happening on the continent?
The African Virtual University (AVU) has established the largest distance and eLearning network in over 27 countries in Sub-­‐Saharan Africa, and produced more than 40,000 graduates. It hosts 219 open educa>onal modules ranging from mathema>cs and science, teacher educa>on, and ICT skills –available free of charge in English, French and Portuguese. The AVU’s interac>ve portal is accessed beyond Africa in 142 countries with a majority from Brazil and the United States. AVU con>nues to gain interna>onal recogni>on by increasing access to quality educa>on for thousands of Africans. It was awarded the top prize for Best Emerging Ini>a>ve by over 4,000 people in the first OpenCourseWare (OCW) People’s Choice Awards. Created in 1997, to increase African students’ access to quality educa>on through the use of ICT, AVU moved its base to Kenya and became a pan-­‐African intergovernmental organiza>on in 2003. So what is currently happening on the continent?
Building entrepreneurial competence For historical reasons, African universi>es tend to focus more on tradi>onal educa>on func>ons than on technical and entrepreneurial skills. First-­‐genera>on African universi>es were designed to train postcolonial civil servants; depar>ng colonial administrators had liple interest in training Africans to be agents of economic change. This tradi>onal approach became the model for new universi>es, even though economic demands called for greater emphasis on technology and business. But as Africa invests in new and updated infrastructure, the associated projects offer an opportunity to build up the region’s capabili>es in project design, execu>on, and maintenance. And regional energy, transporta>on, irriga>on, and telecommunica>ons projects in turn will provide the basis for technical training. So what is currently happening on the continent?
Building entrepreneurial competence Such specialized universi>es can combine theore>cal training with prac>cal work through experien>al learning, which will help diversify approaches to higher educa>on without the need to reform exis>ng universi>es, some of which might voluntarily adopt the new models. There are already such universi>es in Africa and elsewhere—for example, Egypt, Ghana, and Kenya have schools dedicated to the telecommunica>ons sector. Moreover, Africa’s varied exports, such as minerals and agricultural commodi>es, are associated with long value chains that provide a rich basis for curriculum development and pedagogical innova>on, in diverse loca>ons. Coffee, chocolate, tea, flower, copper, and diamond produc>on curriculums are just wai>ng to be developed. Pipsburgh’s Carnegie Mellon University has established a branch in Rwanda for graduate training in technology and entrepreneurship, which will posi>on the country as a technology hub and serve surrounding countries as well. So what is currently happening on the continent?
Increased regional mobility Mauri>us providing a plasorm for interna>onal universi>es and educa>onal ins>tu>ons Government providing the necessary infrastructure and providing turn key solu>ons Posi>oning itself as a hub for Interna>onal educa>on for the both the francophone and Anglophone Africa Crea>on of the Open University and the university of the Indian ocean The role of the private sector in providing educa>onal infrastructure-­‐ within the IRS and RES Tradi>onal agribusinesses have diversified into infrastructure and development The Australian Scene
Ranked amongst the best in the world Proud record in research and innova0on ( Australia has produced 12 Nobel prize laureates) Every day over 1 billion people around the world rely on Australian discoveries and innova>ons to make their lives, and the lives of others, beper (The Bionic Ear, IVF, ultrasound, Black Box Flight Recorders, humidicribs, vaccines for cervical cancer and the flu, spray-­‐on skin for burns vic>ms and WiFi are just some of the innova>ons Australia can be proud of). The Australian Scene
Why do we need educa0onal infrastructure-­‐ Educa0on as an EARNER -­‐ huge contribu0on to Australia’s economic and social prosperity Graduates contribute over $170 billion per year in wages to the economy. Universi>es directly contribute around $22 billion to our GDP every year. Interna>onal educa>on contributes around $15 billion annually to the economy and is Australia’s largest service export. There are just 9 Australian companies listed in the Fortune Global 500, but there are 19 Australian universi0es in the world’s top 500, five of these in the top 100. The Australian Scene
Our innova0on is transforming our economy and crea0ng new industries Between 2009 and 2011, universi>es applied for, or had issued almost 15,000 patents – the most of any public organisa>on. In 2011, the university sector accounted for almost 70% of new patent applica>ons filed by public organisa>ons. The university sector raised the highest amount of capital for startup companies in 2010 and 2011 (amongst public organisa>ons), totaling $157m. We are a world leader in interna0onal educa0on Interna>onal educa>on has risen to be a $15 billion per annum industry for Australia, the largest export earner a?er resources. Interna>onal educa>on supports 127,000 jobs, of which 88,000 are outside of the educa>on sector. The Australian Scene
Developing countries such as China, India and Brazil are placing innova>on high on their policy agenda. China’s spending on research and development has grown by 20% per year since 1999 in pursuit of its goal of spending 2.5% of GDP on research and development in 2020: China spent more than $130 Billion in 2006; and China’s expenditure on research and development is increasing as a propor>on of GDP each year (GDP growth in China is also rapidly increasing). The number of Chinese universi>es in the top 500 almost tripled from eight in 2005 to 23 in 2011 (Academic Ranking of World Universi>es, 2011). India is producing some 2.5 million science and engineering graduates each year. India also leads the world in research and development tax generosity by allowing a 200% super deduc>on for research and development spending. Brazil, in line with its aspira>on to be a ‘natural knowledge economy’, building on its natural and environmental resources, is working to increase research spending to 2.5% of GDP by 2022. The Australian Scene
The >me for investment is now… Public investment in universi0es pays for itself each extra dollar invested in ter>ary educa>on grows the economy by $26 and grows tax revenue by $8. Government investments in university educa>on overall produce high returns, es>mated to be 13% to 14% per annum in real terms. The typical es>mated returns for university research in par>cular are extremely high, ranging from between 20% to 50%. The es>mated returns significantly exceed the cost of capital, sugges>ng further Government investment in university research will grow the economy. OECD data shows a strong correla>on between increases in Government investment in university educa>on and increases in GDP per capita. Each 0.1 percentage point increase in government investment results in 2.5% increase in GDP per capita. 2013 Universities Australia- www.smartestinvestment.com.au VICTORIA UNIVERSITY-­‐ WHO ARE WE? Our University at a glance. Year founded: 1916 Students: 51,642 Staff: 2,496 Alumni worldwide: over 100,000 Number of campuses: 9 Number of offshore sites: 17 VICTORIA UNIVERSITY-­‐ WHO ARE WE?
Being a dual sector University, we offer AQF Level 1 – Cer>ficate I Level 2 – Cer>ficate II Level 3 – Cer>ficate III Level 4 – Cer>ficate IV Level 5 – Diploma Level 6 – Advanced Diploma, Associate Degree Level 7 – Bachelor Degree Level 8 – Bachelor Honours Degree, Graduate Cer>ficate, Graduate Diploma Level 9 – Masters Degree Level 10 – Doctoral Degree VICTORIA UNIVERSITY-­‐ WHO ARE WE?
In 'Trades College': Our programs are highly regarded by industry for their innova>ve approach to skills development. We offer: na>onally accredited courses ranging from Cer>ficates I to IV skills development for pre-­‐appren>ces, appren>ces, trainees and current workers including short courses skills recogni>on (recogni>on of prior learning) including skills assessments for Permanent Migra>on (GSM and ENS) and Temporary Worker Visa 457 visas tailored workforce development for enterprises both na>onally and interna>onally. VICTORIA UNIVERSITY- WHO ARE WE? In 'Trades College': Construc>on We offer a wide range of courses in building and construc>on from pre-­‐employment programs through to para-­‐professional skill development. Engineering We specialise in electrical, electrotechnology, fabrica>on and fixng & turning courses, including short courses and specialist training. Hairdressing We offer a range of hairdressing courses and have been awarded 3 gold stars by the Ins>tute for Trade Skills Excellence for our hairdressing training. Hospitality VU is a recognised leader in hospitality training. Make-­‐up Victoria University is recognised as the leading make-­‐up school in Australia. Our programs have been designed to prepare students for a career as a Media Make-­‐up Ar>st … VICTORIA UNIVERSITY- WHO ARE WE? VICTORIA UNIVERSITY- WHO ARE WE? Victoria University staff have b e e n a wa rd e d fo r t h e posi>ve impact of their academic and social work in t h e A f r i c a n A u s t ra l i a n community. Last month's Celebra>on of African Australians awards at P a r l i a m e n t H o u s e i n Canberra showcased the contribu>ons of African Australians including Victoria University's own Elleni Bereded-­‐Samuel, Dr Charles Mphande and Dr Mimmie Claudine Ngum Chi Waps. cmu.edu.au
World economic forum series SA 2013
Parting thoughts:
Focus on Asia- Asian Century/Asian Century White Paper
High time for a similar approach to engaging with Africa
Development of a framework for African engagement through African literacy and
competencies for businesses, government and any other stakeholders
Becoming Africa Literate
Thank you