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Employment Productivity and Growth | Mansoor Zaib Khan

Employment, Productivity and Growth | Mansoor Zaib Khan

Human resource development (HRD) refers to the development of people through education, training, health care, nutrition, population control and employment. Due to its profound impact on development, investment in education and skill formation through training is now considered as one of the most important factors for socioeconomic development.

Sustainability of economic development is crucially linked to the availability of gainful and productive employment opportunities for able and willing individuals. Economic and social progress plans and policies need to be determined by the considerations of levels of productive employment generation.

High growth rates when accompanied with a sustained rise in productivity help in creating productive employment opportunities. Higher growth sectors with an employment augmenting potential need to be effectively tapped. It is clear that sustained growth with rising productivity is the first step, but this process has to be linked with better institutions, good governance, and enhancement in the employment intensity of growth.

In this context, the sectoral composition of output, choice of technology used in production, and international terms of trade emerge as crucial links. Equally important is enhancing the ability of the poor to become integrated into the growth process. Increasing access to education and skills therefore, as well as infrastructure, finance and support services are important components in this regard.

Higher economic growth is associated with a rise in the productive capacity. Ceteris paribus, this leads to employment with rising productivity. On one hand, greater and productive employment helps to release resources of the employers towards (more) education and skilling of their workforce. It enables the employed to spend more on the education and training of their children. Raised future productivity of the workforce is then a foregone conclusion.

Due recognition would also need to be accorded to the crucial role of vocational and technical competence of the workforce. The process of industrialization, efficient use of technologies and plants, and technology up-gradation and adaptation are all dependent on the availability of a critical mass of competent vocational and technical workforce.

Regrettably, the state of education and training in Pakistan is very poor. A low level of literacy and enrolment, high levels of dropout, and inequalities at different levels of education still persist. Moreover, resource allocation to the education and training sector is low, even lower than many developing countries of similar per capita income. Paucity of funds and political will are the major impediments in this regard. As Pakistan is now developing a strategy of expanding the real sectors of its economy, there is a need to focus on skills required for the promotion of these sectors.

Affirmative action is needed to meaningfully integrate employment, poverty reduction and social development concerns with the overall macroeconomic framework, ensuring considerations on decent employment generation and HRD as central to policy formulation and implementation. Employment inevitably has to be linked with productivity, and to all the steps towards its enhancement. In the process, we need to carefully look into the best practices on HRD and the crucial role of Technical Education and Vocational Training (TEVT) in enhancing productivity.

Skill requirements, both within and outside the country, as well as the gaps in these requirements need to be identified. An education and training system that responds well to these identified gaps should be developed and enhanced over time, duly incorporating the role of the private sector through public-private partnerships.

ower levels of education and training notwithstanding, comparisons end up in frustrations when one looks at the type of economic activities being carried out by a majority of the workforce – cultivation, livestock rearing, fisheries, rural non-farm activities, urban informal sector and a host of small and medium enterprises – and relates them to the output of education and training institutions.

In this regard, some key recommendations include the development of generic skills, promotion of basic education, and the strengthening of primary and secondary education. Employment led growth and productivity is undoubtedly linked with access to universal primary education, but it is crucially dependent on retaining a larger proportion of students in secondary and higher-secondary schools, where early orientation can be given on TEVT, agri-business and other entrepreneurial activities. Further, a technical stream, both in letter and in spirit, can be introduced in secondary schools.

In addition, the expansion of scientific and technological human power and skills up-gradation in the service sector is required. This should be coupled with an improvement in information management systems, and the development of skill standards, with active involvement from employers, and existing HRD institutions. The role of employers in education and training, and the role of policy in strengthening HRD institutions remain crucial. Finally, all these efforts need to be coordinated through the development of a comprehensive Labor Market Information System.

The challenge no doubt is daunting but achievable through concerted efforts.

Employment, Productivity and Growth | Mansoor Zaib Khan

Source: http://nation.com.pk/columns/27-Jun-2015/employment-productivity-and-growth

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