Global Competitiveness Report. World Economic Forum
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3 Global Competitiveness Report World Economic Forum 3
4 World Competitiveness Yearbook International Institute of Management Development (IMD) 2016 World Competitiveness Yearbook: 61 countries, evaluated based on 342 criteria covering Economic Performance, Government Efficiency, Business Efficiency, and Infrastructure Uses more hard data than WEF 4
5 World Competitiveness Yearbook Philippines 38th in Economic Performance (down 4 places) 36th in Government Efficiency (no change) 24th in Business Efficiency (up 2 places) 55th in Infrastructure (up 2 places) 5
6 The State Shared Prosperity in the Philippines Shared Prosperity is sustainable national economic growth that accelerates household income growth, enhances quality of life, and provides development opportunities not only for the country s elite and professional classes, but also for vulnerable low-income and marginalized groups (Garcia, Francisco, and Caboverde; 2016). Identifying and Unlocking TVET s potential in IT-BPO 6
7 Drivers of Growth Services grew 6.4 percent per year from 2010 to 2014 IT-BPO Tourism Private consumption 70 percent of GDP Rising middle class OFW remittance growth slowing Identifying and Unlocking TVET s potential in IT-BPO 7
8 Challenges to Shared Prosperity Inequality 70 percent of income going to the richest 30 percent of families National poverty incidence largely unchanged or increasing in certain areas (e.g. ARMM) Potential of services to drive shared prosperity? Services traditionally less productive than manufacturing sector Identifying and Unlocking TVET s potential in IT-BPO 8
9 IT-BPO in the Philippines A Driver of Shared Prosperity? Employment reached 1.2 million in 2015, up from under 100,000 in The sector was tagged in the Philippine Development Plan , along with tourism, as a driver of growth. 9
10 Strong sector growth USD 888 million in 2004 to USD 14 billion in
11 Framework for Shared Prosperity in IT-BPO Fragmented nature of services means different positions have different requirements. 11
12 Enablers for Shared Prosperity The context of globally traded services can encourage a culture of learning by doing and create technology spillovers. Strong global competition and evolving technology leads to incentives to train employees and reward good performance. Employees develop their own skills, competencies, and attitudes to reach management positions or perform more skilled work. Identifying and Unlocking TVET s potential in IT-BPO 12
13 Enablers for Shared Prosperity Expansion into new markets, services, and clients means career opportunities can be accessible to a broad labor pool. Fragmented nature of IT-BPO services trade means firms need workers with different skill and education levels. Lower value-added positions don t necessarily require college degrees. Diversification into higher-value services means steady demand for educated professionals. Identifying and Unlocking TVET s potential in IT-BPO 13
14 Challenges Growth still concentrated in Metro Manila Shared prosperity requires human capital development opportunities across the provinces. Next Wave Cities program seeks to address this issue. Identifying and Unlocking TVET s potential in IT-BPO 14
15 Challenges Quality and availability of education and training Hiring rates for certain IT-BPO subsectors are 5-10%. Sector representatives cited a lack of competencies such as English communication and problems solving skills in applicants. Firms are not able to fill demand while workers have restricted access to career opportunities in the sector. Identifying and Unlocking TVET s potential in IT-BPO 15
16 The Role of Technical-Vocational Education and Training (ADB and UNESCO-UNEVOC) Developing skills affects incomes and productivity on the individual, firm, and national levels. Training can also lead to technology spillovers: trainees learn from each other. Effective training policy can help firms stay competitive in the face of rapidly developing technology. TVET can address under-employment and unemployment, particularly among youth and women, as well as urban-rural disparities. Skills shortages from lack of effective training policy hinders firms from filling vacancies Identifying and Unlocking TVET s potential in IT-BPO 16
17 TESDA Established in Mandated to formulate manpower and skills plans, sets appropriate skills standards and tests, coordinates and monitors manpower policies and programs, and provides policy directions and guidelines for resource allocation for the TVET institutions in both the private and public sectors. Identifying and Unlocking TVET s potential in IT-BPO 17
18 TESDA Governed by the TESDA Board composed of the Secretary of Labor and Employment and representatives from different sectors. Training institutions must register with TESDA before offering programs, subject to documentary requirements and site visits. Training Regulations are the basis of programs. Identifying and Unlocking TVET s potential in IT-BPO 18
19 School-based Training As of January 2017, there are 4,037 public and private TVET institutions There are 17,009 registered training programs, with 2,184 covering ICT 1,410 TVET providers offer ICT programs 19
20 Training for Work Scholarship Program Designed to defray training expenses and prepare workers for careers in highdemand sectors such as IT-BPO and tourism. TESDA has worked with IBPAP by allotting vouchers to member associations. From , 262,577 vouchers were allocated for IT-BPO training, producing 236,616 graduates. (TESDA IT-BPO accomplishment report) Identifying and Unlocking TVET s potential in IT-BPO 20
21 Initial Findings - Challenges to Effective TVET for IT-BPO 1. Monitoring quality of training programs and tracking graduates to measure effectiveness of training. Lack of resources makes it challenging to track where graduates of TVIs end up TWSP graduate employment statistics are not specific to IT-BPO jobs. Number and geographical spread of TVIs in the Philippines also hinders monitoring and evaluation. Process of promulgating or revising Training Regulations takes time. Identifying and Unlocking TVET s potential in IT-BPO 21
22 Initial Findings - Challenges to Effective TVET for IT-BPO 2. Ensuring that people with different levels of education and competencies have access to training that improves their chances for employment. Firms train successful applicants in-house for specific assignments. Near-hires may have competencies necessary for positions but still require some training to secure a position. Filipinos who lack the required competencies and do not qualify as near-hires can pay for training or participate in the TWSP, but firms may not value this highly. Identifying and Unlocking TVET s potential in IT-BPO 22
23 Initial Findings - Challenges to Effective TVET for IT-BPO 3. Maintaining consistent communication and coordination between government, firms, and TVIs Training priorities may change as administrations do. Content and standards for training courses and the TWSP could benefit from increased participation by the sector. Can smaller TVIs match ICT course graduates with employers outside Metro Manila? Identifying and Unlocking TVET s potential in IT-BPO 23
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