Monthly Archives: March 2013

Can we measure skills for the knowledge economy in Asia-Pacific? By Cristina Martinez-Fernandez, OECD

 The knowledge economy is an slippery concept often associated with higher levels of income, better jobs and better lives. However the pathways to achieve a knowledge economy are not easy and many times lack a clear road map – how can this experience be transferred from higher income countries to lower income countries?  We often imagine ‘knowledge workers’ as those having unique or specific skills and knowledge to offer but what do we know about them? Can we measure skills needs for the kowledge-based economy in order to understand better who these workers are, where they are and what occupations they have? Scarcity of data and lack of standardised direct measures is a great obstacle. However proxies such as the existing demand for skills by occupation provide interesting results.

                  Occupational structures show the level of skills a country has. Examining occupational structures by skills levels shows that, generally, the more developed the country is, the more highly skilled occupations are available, compared to developing countries which seem to rely on lower skilled occupations. Higher skilled occupations such as professionals, technicians, associate professionals and clerks are significantly advanced in the developed countries of Australia, Hong Kong, China, New Zealand and Singapore, while other countries such as Cambodia, Pakistan and Viet Nam are struggling to supply these types of skills. Craft/related trades, and plant/machine operators and assemblers are regarded as medium-skille and in this category, operators and assemblers are generally in the manufacturing sector and industrialised countries have more of these jobs. But the craft and trades category includes diverse skill level  workers, and a high share is found not only in Australia but also in low‑skilled countries such as Pakistan and Viet Nam. The high share of low-skilled agricultural and elementary occupations indicates those countries in a state of low-skill equilibrium such as Cambodia, Mongolia, Pakistan, the Philippines and Viet Nam.

From the occupational analysis we can extract the demand for skills training as derived from the need to align skills supply (from educational levels supply) with demand. The change in shares of occupation shows the direction and the magnitude of the shifts in skills demand. For example, Nepal and Viet Nam have growing demands for craft/trade and production workers. In Pakistan, Thailand, Vietnam and Nepal demand for production workers have increased. On the other hand, demand for agricultural workers and elementary occupations have declined. This shift in demand means that these countries need to train unskilled workers from rural areas to become production workers. In the more industrialised parts of Asia, demands for the medium-skilled occupations (craft/trades and operator/assembler workers) have declined fast in countries including: Australia, Japan, Hong Kong, China, Korea, Malaysia and Singapore.   Countries in which the shares of professional and technician / associate professional workers has risen  include Hong Kong, China, Korea, Malaysia and Singapore, in varying degrees. However, decline in production jobs is not entirely matched by growth of higher skilled jobs. In all countries, the shares of elementary occupations have increased. Mongolia and the Philippines have experienced a reduction of craft / trades and production jobs and an increase of elementary occupations . These countries are faced with upskilling demands for a wide range of their unskilled workforce in order to increase the share of knowledge occupations.

Diverse economic conditions of the countries and the variations on skills demand and supply offer a changing scenario but yet one that can be observed (even if not with a perfect shape) in order to provide evidence for the design of skills development and training programmes and policies in Asia-pacific. In particular, changes in occupational structure need to be monitored more closely to better anticipate skill demands from the different countries.

 Dr Cristina Martinez-Fernandez is a Senior Policy Analyst at the OECD LEED Programme. This piece draws on the OECD report on ‘skills development pathways in Asia’ (Martinez-Fernandez, C. and K. Choi, 2012); report contributing to the OECD Skills Strategy studies.