OECD SKILLS STRATEGY SEMINAR: FLANDERS

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1 OECD SKILLS STRATEGY SEMINAR: FLANDERS Dirk Van Damme Head of Division OECD Centre for Skills Education and Skills Directorate 30 January 2018 Introductions Before we discuss the potential details of a Skills Strategy project in Flanders, I though I would first provide an overview of: the OECD Skills Strategy framework Its application, and the NSS project model 1

2 What do we mean by skills? Generic cognitive skills Technical, professional, sector specific skills Socio emotional skills 2 The term skills means different things to different people. When the OECD refers to skills, we mean all of the following: General cognitive skills Socio-emotional skills And technical, professional and sector-specific skills. 2

3 Why do countries need skills strategies? Skills empower countries and people to.thrive in our increasingly interconnected and rapidly changing world Why do countries need skills strategies? Skills empower countries and people to.thrive in our increasingly interconnected and rapidly changing world so countries can ill afford not to take a strategic approach to ensuring that people: develop the rights skills And use these skills fully and effectively 3

4 Share of the workforce vulnerable to automation Proportion of workforce using general cognitive skills at or below level of computer capabilities, historical and projected Source: Elliott, S.W. (2017), Computers and the Future of Skill Demand, OECD Publishing, Paris. 4 More than half of the workfoce in OECD countries are potentially vulnerable to automation. This means that increasingly people will need to upgrade their skills to perform new tasks in their existing jobs. develop new skills for new jobs How effectively our skills systems facilitate this adjustment will help to determine... how well individuals and countries are able to: confront the challenges and seize the opportunities of the future. 4

5 Skills matters for social and economic outcomes Likelihood of positive social and economic outcomes among highly literate adults Increased likelihood (odds ratio) of adults scoring at Level 4/5 in literacy reporting high earnings, high levels of trust and political efficacy, good health, participating in volunteer activities and being employed, compared with adults scoring at or below Level 1 in literacy (adjusted) Note: Odds ratios are adjusted for age, gender, educational attainment and immigrant and language background. High wages are defined as workers' hourly earnings that are above the country's median.) Source: OECD (2013), OECD Skills Outlook 2013, 6 But skills matter not only for economic outcomes but also social outcomes. And it is not only skills proficiency that matters but also the intensity of skills use. Those with higher levels of skills and those who use their skill more at work or home report having, on average: Higher levels of trust Higher levels of political efficacy Greater participation in civic life, Better health outcomes As well as higher wages 6

6 The three pillars of the skills strategy 7 The OECD Skills strategy has provides countries with a strategic and comprehensive approach to assessing their skills challenges and building effective national skills systems. using a framework composed of 3 interrelated pillars: Developing relevant skills Activating skills supply, and Putting skills to effective use It also recognises that to maximise economic and social returns, countries also need to strong skills systems Let s examine just for didactic reasons how this framework could be applied in Flanders 7

7 Most Flemish adults develop strong generic skills Mean literacy score of adults by educational attainment, year-olds Source: OECD calculations based on OECD (2017), Survey of Adult Skills database (PIAAC) (2012, 2015), (accessed March 2017). 8 Flanders does a good job of ensuring that most people develop a high level of skills proficiency. The skills of Flemish adults are very strong in international comparison. Furthermore, some 12% of Flemish adults were high performers (Level 4 or 5 literacy) as compared with an average of 10% across OECD countries. 8

8 A large share of tertiary graduates have high skills Low and high literacy skills among tertiary graduates, share of year-olds Source: OECD calculations based on OECD (2017), Survey of Adult Skills database (PIAAC) (2012, 2015), (accessed March 2017). 9 Almost two out of three of today s young people are expected to enter tertiary education at least once during their lifetime. And performance of tertiary graduates is comparatively high; the share of tertiary graduates with high literacy is 26%, compared with 21% in the OECD. But a number of countries perform even better. 9

9 But some groups are underperforming Skills (literacy) by socio-demographic groups Source: OECD (2016), Skills Matter: Further Results from the Survey of Adult Skills, OECD Skills Studies, OECD Publishing, Paris However, certain groups are not sharing in this success. While the skills performance of native born exceeds the OECD average the skills performance of foreign-born is just below the average for immigrants in OECD countries 10

10 And a large share of adults lack the skills needed to adapt to economic change over (18%) of adults aged in the Flanders have low levels of foundational skills (i.e. Level 1 or below in literacy, numeracy or both) 39% of low skilled adults are between the ages of 55 and 64 and are close to retirement But some 61% of low skilled adults were of prime working age (16 to 54 year-olds) in This includes a large group of 45 to 54 year-olds (25%), many of whom will continue to be part of the Flemish labour force during the next two decades. 11 The share of adults with low levels of skills (18%) is well below the OECD average (26%), Still, in absolute terms, the 700,000 adults with low levels of skills proficiency (i.e. Level 1 or below in literacy, numeracy or both) is a significant concern. These individuals have trouble extracting information from longer and more complex texts or performing numerical tasks involving several steps. While the majority of low-skilled adults in Flanders are 45 years and older, many will continue to be part of the labour force for years to come. As the skill requirements of jobs continue to rise, these individuals will find it increasingly difficult to maintain their current jobs, and, if they lose those jobs, to reskill for new ones. 11

11 Participation in adult formal and non formal learning in Flanders is average Adults' participation in formal and/or non-formal education, by type (2012/2015) Source: OECD calculations based on OECD (2017), OECD Survey of Adult Skills database (PIAAC) (2012, 2015), OECD, Paris, (accessed March 2017). 12 Flanders is only an average performer on measures of continuous learning in adulthood or lifelong learning. Which is not good enough if Flanders wishes to thrive in a rapidly changing and increasingly complex and competitive world. 12

12 But low skilled adults are much less likely to participate in formal and non formal learning Participation gap in formal and non-formal learning for job-related reasons, Percentage of high-skilled and low-skilled adults Source: OECD calculations based on OECD (2017), OECD Survey of Adult Skills database (PIAAC) (2012, 2015), OECD, Paris, (accessed March 2017). 13 The trend towards a growing share of jobs requiring higher levels of skills means that many of low-skilled adults are at risk of losing their jobs if they do not take steps to upgrade or develop new skills. However, low-skilled adults are much less likely than their more highly skilled peers to participate in learning of all forms. Moreover, as is shown here, the gap in the participation rates between high and low skilled adults is particularly large in Flanders. The gap in participation in non-formal education and training for job-related reasons (22 percentage points) is larger in only four other participating countries. The gap in participation in formal education and training in the Flanders is about average, but, Flanders should not strive to be average. Given what I mentioned earlier about the large number of low-skilled workers in Flanders, their low rate of participation in learning should be a concern. 13

13 The three pillars of the skills strategy 14 The OECD Skills strategy has provides countries with a strategic and comprehensive approach to assessing their skills challenges and building effective national skills systems. using a framework composed of 3 interrelated pillars: Developing relevant skills Activating skills supply, and Putting skills to effective use It also recognises that to maximise economic and social returns, countries also need to strong skills systems Let s examine just for didactic reasons how this framework could be applied in Flanders 14

14 Employment rates low for older workers and the low educated Employment rates, year-olds, Flanders and EU, 2016 Source: Eurostat (2018), Regional Employment, LFS series 15 There are large differences in employment across population groups. Female employment rates are considerably lower than male rates in Flanders and the gap is larger than the OECD average. Those with low levels of education are particularly struggling in the labour market and more so that their peers in other OECD countries on average. 15

15 And 4 out of 10 unemployed persons is out of the labour market for more than 12 months Long term unemployment, as a share of unemployment, 2016 Source: OECD (2017), Long-term unemployment rate (indicator). doi: /76471ad5-en. Long-term unemployment (12 months and more) by NUTS 2 regions [lfst_r_lfu2ltu] 16 Long term unemployment in Flanders is high at 41.3%, versus an OECD average is 30.5% 16

16 The three pillars of the skills strategy 17 The OECD Skills strategy has provides countries with a strategic and comprehensive approach to assessing their skills challenges and building effective national skills systems. using a framework composed of 3 interrelated pillars: Developing relevant skills Activating skills supply, and Putting skills to effective use It also recognises that to maximise economic and social returns, countries also need to strong skills systems Let s examine just for didactic reasons how this framework could be applied in Flanders 17

17 A comparatively small share, but nonetheless large number of adults is mismatched for their jobs Qualification, literacy and field-of-study mismatch Percentage of mismatched workers, by type of mismatch Workers are classified as mismatched by qualification if they have higher or lower qualifications than required by their job; workers are classified as mismatched in terms of literacy skills if they have literacy proficiency exceeding or below that required in their job; workers are classified as mismatched by field of study if they are working in an occupation that is not related to their field of study. Source: OECD calculations based on the Survey of Adult Skills (PIAAC) A comparatively small share, but nonetheless large number of adults is mismatched for the needs of their jobs on the basis of their: skills, qualifications, and/or fields of study This has negative implications for firms and countries productivity, as well as individuals incomes and job satisfaction Educational institutions can improve the alignment between supply in demand in many ways that you are all very familiar with 18

18 Flemish firms could make more intensive use of the skills of their workers Numeracy use at work and numeracy proficiency of working population Note: For reading, writing, numeracy and ICT skills, skills use indicators are scales between 1 "Never" and 5 "Every day". Problem-solving skills use refers to respondents'' answers to How often are you usually confronted with more complex problems that take at least 30 minutes to find a good solution?. The set of possible answers also ranges between 1 "Never" and 5 "Every day". Proficiency scores range from 0 to 500. Source: OECD (2016b), Skills Matter: Further Results from the Survey of Adult Skills, Fig. 4.4, OECD Publishing, Paris Perhaps of greater concern is the comparatively very low use of numeracy skills at work in Flanders. Despite having high levels of numeracy proficiency, Flemish workers use their numeracy skills much less intensively than do workers in most other OECD countries as illustrated by comparing the green bar relative to the blue bars The large gap between numeracy proficiency suggests investments in developing these skills is being wasted 19

19 Overall, Flemish firms make good use of HPWP High-Performance Work Practices (HPWP), organisation and management factors Share of jobs with high HPWP and mean HPWP score Notes: a) Share of workers in jobs where the summary HPWP is above the top 25th percentile of the pooled distribution. b) Average value, across jobs, of the HPWP index. The HPWP index is a sum scale of all subcomponents shown in Panel I or summing the scales of the work organisation subcomponents only (Panel II). Source: OECD (2016a), OECD Employment Outlook 2016, OECD Publishing, Paris, 20 Flemish firms are already adopting HPWP at a higher rate than their counterparts in most other countries We need to dig deeper to understand the possible reasons why skills use is not better in Flanders. HPWPs include both organisational and management practices. Organisational practices include such things as: teamwork, autonomy, task discretion, mentoring, and job rotation Management practices, on the other hand, include such things as: use of incentive pay, training practices, and 20

20 flexibility in working hours 20

21 However, small and medium sized firms would benefit from the increased adoption of HPWP High-performance work practice by firm size in Flanders Average HPWP score by firm size Organisational practices such as: teamwork, autonomy, task discretion, mentoring, and job rotation Source: OECD calculations based on OECD (2017), OECD Survey of Adult Skills database (PIAAC) (2012, 2015), OECD, Paris, (accessed March 2017). Management practices such as: use of incentive pay, training practices, and flexibility in working hours 21 Here see that small and medium-sized firms in Flanders could benefit the most from the increased adoption of HPWP. As shown by the blue bars, HPWP are in most widespread use in large firms (more than 251 employees) and micro-firms (1-10). And are in least widespread use among small firms (11-50 employees). As shown by the grey bars, this U shape pattern is even more pronounced when one considers only work organisation practices. Organisational practices include such things as: teamwork, autonomy, task discretion, mentoring, and job rotation 21

22 THE OECD SKILLS STRATEGY: APPROACH 22 What would an OECD Skills Strategy project in Poland look like? 22

23 23 Many of the skills challenges countries are facing today are the same ones they have been facing for a decade or more. These sticky problems include: difficult transitions from secondary to tertiary education and from education to work, and slow progress towards creating cultures of lifelong learning. Our assessment, and that of many of the NPTs and stakeholders, is that many of these persistent challenges are rooted in the fragmented responsibilities for skills outcomes (e.g., ministries, levels of government, stakeholders) and poor coordination among these actors. Countries can make progress on these and other challenges so that we are not still talking about them 10 and 20 years from now by [click]: Strengthening whole of government approach to coordinate the actions of ministries and different levels of Govt strengthening stakeholder engagement to ensure that they are able to: advise government effectively on policy development and 23

24 implementation as well as develop complementary practices of their own, and generating high quality and accessible information to support informed and coordinated decision making coordinating financing arrangements across all actors to improve policy coherence and generate policy complementarities 23

25 Strengthening whole of government collaboration Prime Minister s Office Labour Economy Education Given the many actors that have influence on, and an interest in, the development, and use of skills OECD Skills Strategy are designed to facilitate whole ofgovernment collaboration, bringing together all relevant ministries to work on skills issues collectively 24

26 Composition of the National Project Teams varies Note: Red indicates Ministry of Project Coordinator 25 Here we see that NPT have included as many as 11. The OECD draws upon an equally wide range of expertise from within the organisation, including EDU ELS STI CTP DEV LEED GOV 25

27 Strengthening stakeholder engagement Together, the OECD and NPT engage key national stakeholders in a number of interactive workshops in order to: generate a consensus about what are the most important skills challenges facing countries, and build a commitment to take joint action to address these challenges. 26

28 Providing high quality analysis Of course, all of our projects are grounded in the same high quality analysis for which the OECD is known. 27

29 International Peer Learning opportunities 4 th Peer Learning workshop October Participating countries also benefit from annual peer learning opportunities to learn from the experience of other countries working to develop skills strategies. 28

30 AN OECD SKILLS STRATEGY PROJECT IN FLANDERS 29 What would an OECD Skills Strategy project in Flanders look like? 29

31 Benefits of an OECD Skills Strategy project in Flanders Mapping the skills system Identifying policy priorities Aligning policies Making policy recommendations and identifying considerations for implementation 30 Mapping the skills system in Flanders: to better understand the institutions, policies and stakeholders that influence the supply and demand for skills. Identifying policy priorities: to help Flanders to target investments to policy areas with the most potential to improve skills outcomes. Aligning policies: to improve policy coherence and generate policy complementarities. Making policy recommendations and identifying considerations for implementation: to support Flanders to move from diagnosis to action. 30

32 Priority themes for the project 1. Developing a learning culture 2. Strengthening skills use in workplaces 3. Improving skills matches 4. Strengthening skills governance and structures 5. Improving the financing of education and training 31 These themes have been identified by the Flemish national project team as priorities and they align well with our own preliminary assessment. So we proses to use these as a starting point. 31

33 Project elements and timelines 32 The following are the major elements and timelines for the proposed project 32

34 For more information To discuss OECD s work with countries on National Skills Strategy projects contact: montserrat.gomendio@oecd.org dirk.vandamme@oecd.org andrew.bell@oecd.org To learn more about the OECD s work on skills visit: