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July 11, 2016

Gov’t report calls for educational focus on future job demands to thwart low productivity, wages

Argentina must urgently re-train its labour force if it wants its workers to have access to quality jobs in the future, as the lack of technically qualified personnel for in-demand posts could deal a huge blow to national productivity.

That, at least, is the reasoning among some key policymakers, who are beginning to survey the population, in order to address their fears about the mid- to long-term problems that the country may face economically, even if the economy recovers from its current period of stagnation.

According to a recent state-sponsored research, more technicians are needed in a wide range of areas — from industrial production and software programming to design and gastronomy, with the demand for specialists in maths, maths, hygiene, logistics and even nursing expected to surge in the coming years.

Though the government is occupied by current affairs, the findings have concerned experts.

For the time being, President Mauricio Macri’s economic cabinet is concerned about the short term, with the utility rate hikes that they see as key to cutting the fiscal deficit disputed in courts, while the population waits for an economic bounceback that still hasn’t arrived after the devaluation hit their purchasing power.

In the background, however, other officials are dealing with the issue of adapting the national education system to prevent the economic recovery that the government is expecting becoming one that excludes too many for having a skillset that the market will no longer pay good money for.

The Skillset Demand 2020 report, recently commissioned by the Education Ministry through its National Institute of Education and Technology (INET), illustrates the importance of such efforts as its results seemingly confirm those fears.

The report states that 51 percent of Argentine firms are reporting difficulty in finding employees that fit the technical profile they are looking for, either because they don’t have enough training in the right skills, have little to no experience or simply aren’t there in sufficient numbers. About two in ten business executives said that no people were available to fill a job vacancy of some technical kind.

Of the 879 firms surveyed across the country, 69 percent looked for skilled technicians over the last 12 months, but about half of them found it hard to find anyone meeting their required profile. Metalworks, clothing, software, health, energy, mining and telecommunications technicians led the ranking of firms struggling to find well-trained personnel.

If that trend continues, economists and education officials working on the issue argue, then in the mid to long term the country’s current troubles in creating well-paying jobs will only get worse.

Companies’ demands

The government’s reasoning, according to the report, is that both global and local factors mean that workforce qualifications will be key for the future of economic production and job creation in the country.

The world, they say, is rapidly advancing to a “fourth industrial revolution” with robotics, biotechnology, artificial intelligence and other technical developments changing the global workplace, while at home a “new political cycle” will alter the dynamic of productive sectors, “promoting the international involvement of some and forcing others to restructure.”

An economy exposed to global competition in such a technological context will mean that for those jobs firms will demand a more “trained workforce, to the detriment of workers with lower skill levels.”

According to Education Minister Esteban Bullrich, “we need to train people for work, society and government together. We need to listen to job creators to see what what we need to do with our school system.”

In a speech during the report’s presentation two weeks ago, Bullrich said that “our kids will change jobs seven times on average, and five of the jobs they will do don’t exist yet. So we have to plan some forward-thinking for the long term.”

The report also calls for “team work between schools and firms,” both in training and in the development of “common projects,” as well as by setting up internships for students.

Hard and soft skills

As for what skills will be required, the INET report argues that the main limitations of today’s job market are related to the lack of technical capabilities, or so-called “hard skills”, as well as experience in the few workers that actually have them.

But the problem is not limited to hard technical skills, as demand for soft analysts will surge in the coming years, according to the results.

The “de-taylorization” of production, meaning the end of the reduction of jobs to simple, machine-like tasks, will mean that manual jobs will be replaced by analytical and decision-making ones. “The routines of mechanical, repetitive jobs will lose weight, and the employee will have to become more sophisticated in order to make decisions on complex operations,” the report says.

With time, analysis will not be limited to machine inputs and outputs, it will also be needed in social terms. According to the findings, “while soft or socio-emotional skills do not determine hirings today, there is consensus that they will gain relevance in the coming five years in terms of which abilities are valued in a worker.”

Managing skill creation

Dante Sica from the Abeceb consultancy agency, which also took part in the report, said during its presentation that “raising productivity to compete globally is a strategic bet which requires the school system to be an integral part of the transformation.”

A similar view is held by economist Eduardo Levy-Yeyati — who has long studied the issue and leads the government’s Production Council tasked with identifying where global demand for jobs is likely to move in the future, in order to train the country’s workforce to align with it — “even if the economy grows next year it will have trouble creating jobs because we not only have problems in education, but the education we grant also has trouble meeting what the market is demanding.”

For the short-term, Yeyati also calls for shortening the timespan needed to get a degree in public universities, and to focus new, shorter careers on technical education that is effectively required by the market.

“The workforce that gets training in public universities today often suffers from the fact that the long years needed to get a degree end up resulting in high dropout rates and a loss of two or three years for kids who end up being scammed by a well-intentioned educational system that doesn’t help them get well paid jobs in the end,” Yeyati says.

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