Skills can help countries integrate into global markets and specialise in the most technologically advanced industries OECD says

The world has entered a new phase of globalisation over the past two decades that presents countries and workers with new challenges and opportunities. Helped by the rise of information technology, production has become globalised and fragmented along so‑called global value chains: workers across different countries now contribute to the design, production, marketing and sales of the same product. On average in OECD countries, one third of jobs in the business sector depend on demand in foreign countries. Thirty percent of the value of exports of OECD countries now comes from abroad.

The impacts of global value chains on economies and societies are more complex, more diffuse and more inter‑dependent than those from earlier phases of globalisation. Globalisation is being questioned. Countries need to step up their efforts to make globalisation work for everyone. This publication shows that by investing in the skills of their populations, countries can help ensure that their participation in global markets translates into better economic and social outcomes.

Skills matter for globalisation

Skills can help countries integrate into global markets and specialise in the most technologically advanced industries

  • When skills development accompanies participation in global value chains, countries can achieve stronger productivity growth. Countries with the largest increase in participation in global value chains over the period 1995‑2011 have benefited from additional annual growth in industry labour productivity. This extra growth ranges from 0.8 percentage points in industries that offer the smallest potential for fragmentation of production to 2.2 percentage points in those with the highest potential, such as many high‑technology manufacturing industries.
  • To integrate and grow in global markets, all industries need workers who have not only strong cognitive skills (including literacy, numeracy and problem solving) but also managing and communicating skills, and readiness to learn. To spread the productivity gains from participation in global value chains across the whole economy, all firms, including small firms, need workers with such skills.
  • To specialise in the most technologically advanced industries, countries also need:

– workers with good social and emotional skills (such as managing, communicating, self‑organising skills) that complement cognitive skills. A country with a skills mix that is well aligned with the skills requirements of technologically advanced industries can specialise in these industries on average 10% more than other countries.

– pools of workers with qualifications that reliably reflect what they can do. Many technologically advanced industries require workers to complete long sequences of tasks; poor performance at any stage greatly reduces the value of output. Countries with such workers can specialise in these industries on average 2% more than countries whose skills outcomes are less certain.

Chosen excerpts by Job Market Monitor. Read the whole story at OECD iLibrary: OECD Skills Outlook 2017: Skills and Global Value Chains


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