and skills development
195. Governments have a crucial role to play in ensuring that the basic conditions for sustainable enterprise development are in place (see box 3.1 above), which includes policies and programmes that affect an enterprise’s decision to train its workforce.
196. One of the key factors influencing an enterprise’s decision to train is the basic education level of its workforce. This raises a major public policy issue. If workers enter the labour force with poor education, they will be less likely to get the training needed to increase their wages and could get caught in the vicious cycle of the “low-skill, bad job” trap (Snower, 1996). Thus governments have the important responsibility of ensuring that high-quality systems of education, training and a lifelong learning culture are in place. Furthermore, they play a role in targeting skills training for disadvantaged and unskilled workers – a subject further developed in Chapter 4 of this report.
197. Governments can also provide financial incentives to advance private sector and individual investment in training. The most common include levy grant schemes (compulsory or voluntary taxes on payroll or outcome); levy rebate schemes, in which employers are partially reimbursed for approved training; levy exemption schemes, where employers are exempt from levy payments if they spend a percentage (upper bounded) of their payroll; tax incentives for approved training; and also training credits, training awards and individual training accounts. The success of such schemes largely depends on transparent management (often tripartite), the availability of qualified training providers and effective monitoring and quality assurance mechanisms.
198. Promoting the application of principles underpinning international labour standards and international management standards is also an important means of encouraging enterprises to train. The reference to the Human Resources Development Recommendation, 2004 (No. 195), at the beginning of this chapter articulated the different, but shared responsibilities for training between government, employers and workers. The ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration) (ILO, 2006d) and the Guidelines for multinational enterprises of the OECD provide guidance on training local workforces and other matters in respect of good corporate behaviour and citizenship (acquiring new knowledge from MNEs through foreign direct investment (FDI) is explored in Chapter 5 below).
199. National and local governments can also provide leadership in bringing together the various local resources such as universities, technical institutes, business development and financial service providers and organizations of workers and employers to provide the specialized business services and training that may be beyond the means of local enterprises, and to assist new and growing firms in clusters and value chains (box 3.13).
Box 3.13
Workforce innovation in regional economic development
The US Department of Labor (DOL) Employment and Training Administration (ETA) has undertaken an initiative called Workforce Innovation in Regional Economic Development (WIRED) to integrate economic and workforce development activities, demonstrating that talent development can drive economic transformation in regional economies across the United States.
The WIRED initiative applies the following six-step conceptual framework to the activities taking place in each of the regions where investments have been made:
(1) Define the regional economy by identifying the surrounding communities that share common characteristics, looking beyond traditional political boundaries.
(2) Create a leadership group that represents the major assets of a region and provides a forum for regional economic decision-making.
(3) Conduct a regional assessment to fully map the area’s assets and identify the strengths, weaknesses, opportunities and risks based on those assets.
(4) Develop an economic vision based on those strengths and assets and gain support for that vision from the broad-based regional partnership.
(5) Build a strategy and corresponding implementation plan that identifies specific goals and tasks and provides a blueprint for how to achieve the region’s economic vision. (6) Identify resources – both to support the region’s plan and invest in the region’s
economy – from a wide range of sources including foundations, angel and venture capital networks, and federal, state and local governments.
The initiative supports innovative approaches to education, economic development and workforce development that go beyond traditional strategies, preparing workers to compete and succeed both within the United States and around the world. It is expected that WIRED will demonstrate how talent development can drive economic transformation and enable regions to compete in the global economy.
Source: http://www.doleta.gov/wired/files/WIRED_Fact_Sheet.pdf.
200. Employers, workers and their organizations also have a vital role to play in promoting enterprise-level training, including:
Advocacy: The social partners can document and disseminate examples of good practice and advocate the design of appropriate policies to encourage enterprise-level training for improved productivity and competitiveness.
Representation: The social partners can reach out to workers and owners of enterprises, and in particular those of small enterprises and the informal economy, to increase the representation of their membership to ensure deeper and broader benefits of association, representation and leadership.
Services: The social partners provide a variety of important services to their members that could potentially impact on the decision to provide enterprise- level training, including knowledge management, training, awareness raising, advice and guidance on how to access public and private services, links to research and consultancy resources and advice on innovative practices at the workplace (box 3.14).
Box 3.14
Improving workplace learning in Mauritius
In 2005 the ILO, jointly with the Mauritian Employers’ Federation (MEF), initiated a programme to enhance workplace learning practices. The two main objectives of the programme were to: (i) strengthen the capacity of the MEF and its members to plan, design and implement innovative workplace learning programmes; and (ii) facilitate social dialogue on workplace learning between the Government and the social partners with a view to assisting in the effective implementation of the national skills strategy. As a first step, a survey of enterprises was conducted to benchmark the state of workplace learning in Mauritian enterprises. In recent years enterprises had faced an increasingly competitive environment – particularly in textiles, a mainstay of the Mauritian export market – and the Government had identified the most effective way of enhancing competitiveness as developing higher value added forms of production with specific focus on key sectors, including ICT, financial services and tourism. Almost two-thirds of enterprises surveyed viewed improved workplace learning as key to complying with new market demands and to adding value to their products and services, and almost three- quarters responded that they had witnessed significant changes in recent years in their skills requirements. A tripartite national workshop (2007) solicited the views of the social partners on ways to improve workplace learning, emphasizing the importance of information exchange in establishing learning networks that might promote best practice and improve overall competitiveness.
Source: ILO, 2006i.
201. Finally, in view of the important and complementary roles of governments and workers’ and employers’ organizations in the development and implementation of policies to promote sustainable enterprises, as noted in the general discussion on the promotion of sustainable enterprises (ILO, 2007e), tripartite productivity organizations, institutions and programmes at the national, local and industry sector levels are increasingly prevalent (box 3.15).
Box 3.15
New Zealand national workplace productivity programme
The Government of New Zealand follows a tripartite approach to increasing workplace productivity through partnership between the Government, the employers and the unions. It has identified seven key drivers of workplace productivity in the country, namely: building better leadership and management; investing in skills and knowledge; using technology and encouraging innovation to get ahead; organizing work; creating a productive workplace culture; networking and collaborating; and measuring what matters.
The programme reaches a large number of workplaces and provides practical support for employers and workers to raise performance in the workplace, the value of the work done and the rewards for both employers and workers.
The Government and the social partners are working with the ILO to document the approach and resources so that they can be adapted and replicated in neighbouring Pacific island countries.