International Journal of Training Research

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Reconceptualizing skills development for achieving

inclusive growth: the horizon of a new generation
of skills policy

Akiko Sakamoto

To cite this article: Akiko Sakamoto (2019) Reconceptualizing skills development for achieving
inclusive growth: the horizon of a new generation of skills policy, International Journal of
Training Research, 17:sup1, 69-82, DOI: 10.1080/14480220.2019.1632566

To link to this article: https://doi.org/10.1080/14480220.2019.1632566

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INTERNATIONAL JOURNAL OF TRAINING RESEARCH
2019, VOL. 17, NO. S1, 69–82
https://doi.org/10.1080/14480220.2019.1632566

Reconceptualizing skills development for achieving inclusive

growth: the horizon of a new generation of skills policy
Akiko Sakamoto
Decent Work Technical Support Team for East and South-East Asia and the Pacific, International Labour
Organization, Bangkok, Thailand

ABSTRACT KEYWORDS
Asia is known as an economic success story but for many people Skills development; TVET;
growth has not been inclusive. The increased mechanization of skills development/TVET
work and other trends are likely to deepen existing social inequal- policy; inclusive growth;
future of work
ities. Skills can help address these challenges, but a new and
broader perspective is needed in skills development policy. This
article argues that while efforts to improve access and the quality
of skills provision need to be revamped, greater attention should
be focused on the impact of skills development in terms of
improved employment and business outcomes. The extent to
which skills are actually utilized and whether workers are rewarded
for their skilling efforts are influenced by the context of work.
A future skills policy aimed at achieving inclusive growth requires
a more integrated perspective of enhancing the skills eco-system
(both supply and demand) that goes beyond the traditional
boundaries of skills policies.

Introduction
The recent increase in attention to skills development is unprecedented. While commu-
nicated in various expressions – whether it be human resource development, skilling of
the workforce, or improving individual capabilities – the importance of developing the
skills and knowledge of individuals forms one of the key pillars of practically all main
national and regional development strategies in the Asia and Pacific. The heightened
interest in Industry 4.0 and various discussions centering on the future of work have
added to this momentum.1 While much of the debate focuses on preparing businesses
and the workforce for the new era of technological development, making the growth
process more inclusive is also an equally compelling agenda of national and regional
development.
The expectation that skills will contribute to job enrichment and inclusive growth is
becoming increasingly difficult to meet, however. Skills development systems need to

CONTACT Akiko Sakamoto [email protected] International Labour Organization, United Nations Building, 10th
Floor, Rajdamnern Nok Ave, Bangkok 10200, Thailand
Special Open Access Supplement Issue: Emerging Labor Markets of the Future – Re-imagining Skills Development and
Training, Joint Editors: Sungsup Ra, Shanti Jagannathan and Rupert Maclean
© 2019 International Labour Organization. Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution IGO License (http.7/creativecommons.org/
licenses/by/3.0/igo/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly
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Disclaimer
The authors are staff members of International Labour Organization and are themselves alone responsible for the views expressed in the
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70 A. SAKAMOTO

address existing issues on the limited accessibility to training by women and other
marginalized groups while responding to emerging skills needs of those who are, or
prone to be, negatively affected by labor market disruptions due to the increased
mechanization of work. Future skills policy needs to equip individuals with skills and
capabilities to navigate through increasingly uncertain job markets so as not to leave
vulnerable groups further behind. Increased attention to inclusive growth in fact makes
us confront the various inequalities that exist in society, such as persistent gaps between
rural and urban areas, between formal and informal sectors, and in gender. Skills
development has an important role to play in closing these gaps, but improving skills
provision alone is not sufficient.
For skills to contribute to the achievement of inclusive growth, we need to ask whether
skills efforts are making a difference in terms of improved employment and business
outcomes. In part, this requires revisiting existing efforts to improve access and the supply
of skills to be more future-oriented. What we also need is greater appreciation of the
demand side of skills – how the context of work can be structured so that skills are better
utilized, contribute positively to business upgrading, and reward workers for their skilling
efforts (Sakamoto & Sung, 2018a). The context of work that influences the level of skills
demand and utilization is as equally important as supply of skills, as it conditions skills
contribution to business upgrading and quality job creation that are much needed for
inclusive growth. We should not, however, consider the supply and demand of skills as
standalone issues. A future skills policy that effectively responds to the challenge of achiev-
ing inclusive growth in the context of changing labor markets requires a more integrated
and broader perspective that goes beyond the traditional boundaries of skills policies.

Role of skills in achieving job rich and inclusive growth in evolving job
markets
Many countries in Asia and the Pacific have intensified efforts in improving the skills
level of the workforce. Over the last 2 decades, the education level of the workforce has
improved significantly. A significant part of skills mismatch in low- and middle-income
countries in the region remains to be underqualification. This means a large proportion
of jobs is held by workers whose education levels are less than those jobs normally
require; even as the education level of the younger cohort is higher and the gap is fast
narrowing (Matsumoto & Bhula-or, 2018; International Labour Organization & Asian
Development Bank [ILO & ADB], 2014). Skills mismatch from overeducation has been
reported in some ASEAN countries too (e.g. Malaysia and the Philippines). At a glance,
the region has also made impressive progress in terms of poverty reduction. The
proportion of the working population living below the extreme poverty line ($1.90
a day) has steadily declined from 37.6% in 1997, 20.5% in 2007, and to a nominal
7.5% in 2017 (International Labour Organization [ILO], 2018a).
Despite significant efforts in skills development (and heavy expectation on skills in
achieving inclusive growth), skills have not been able to bridge the equity divide,
however. Even among middle-income countries, poverty persists. It may not be in
terms of extreme poverty but moderate ($1.90–$3.10 per day) or near poverty ($3.10–
$5 per day) is significant. In Southeast Asia, while extreme poverty dropped to 5.6% in
2017, 34.4% lived in moderate or near poverty (ILO, 2018a). The absolute number of
 INTERNATIONAL JOURNAL OF TRAINING RESEARCH 71

poor in rural areas is significantly higher than those of urban areas, and this is a serious
concern given the large size of the rural economy in many parts of Asia (Economic and
Social Commission for Asia and the Pacific [ESCAP], 2018).
Poor job quality remains a major challenge in the region. The problem is particularly
pronounced in the informal economy and rural areas. The share of vulnerable employment
(own account workers or contributing family workers) is as high as 71% in low-income
countries in Asia and the Pacific, and 50.6% (one in two persons) even among middle-
income economies (ILO, 2018a). Rates of informal employment are near 80% in Southeast
Asia and the Pacific on average, as rural employment is highly associated with informal
employment that is not covered by labor law protection (Huynh, 2018; ILO, 2018a).
Recent trends, such as skills polarization and prospects of potential job losses due to
a transition to greener economies and technology substitution, are making the aspira-
tion of achieving inclusive growth even harder to achieve. While the prospect of the
future of work presents opportunities for new businesses and ways of engaging work, it
can be a new source of widening inequality, if it is not managed well. The research
indicates that skills-biased technology advancement is indeed taking place and driving
skills demands to higher levels (El Achkar Hilal, 2018). There is a growing expectation for
workers to be able not only to operate technologies but also to understand how the
technology can help the work process. This expectation is increasing the demand for
higher levels of education (El Achkar Hilal, 2018). While this motivates some groups to
take up higher education, the trend can potentially leave other groups behind. Increased
skills polarization is a particular concern in this regard. The upward trend in high skills
demand is accompanied by a slowdown in job creation in the middle-skilled categories
and a faster increase in low-skilled categories of jobs in many ASEAN countries.
While the full impact of increased mechanization and technology and other trends on
employment is yet to be revealed, future labor markets are likely to be more fluid (with
rapid change), unsecure, and unforeseeable (Sakamoto & Sung, 2018b). The prospects
point to the importance of having multiple and a broader base of skills sets and
knowledge to enable career transition at least within the same job cluster, or to develop
a solid base for further learning and adaptability (Buchanan, Wheelahan & Yu, 2018). The
current skills systems are not yet prepared to respond to these trends in terms of
nurturing individual capabilities to navigate through uncertain labor markets, support
the transition, or promote lifelong learning for all.
Structural transformation to shift the base of the economy to one that is more high
value-added, high quality, and highly skilled is a significant challenge. In Thailand, for
example, technological sophistication, in terms of value and complexity of exports, has
taken place to some extent, but it is concentrated in a few sectors and there are signs of
progress tapering off and stalling (Vandenberg, 2019). Trends for shifting the production
base from one country to another in ASEAN where labor costs are lower is another factor
adding to the challenge of potential job losses. A number of middle-income economies
in the region seem to exhibit the features of the so-called middle-income trap where ‘[t]
he economy gets trapped between a move out of low-wage goods and an inability to
produce new high value goods’ (Vandenberg, 2019, p. 6).
In general, the impact of education on wage levels has been positive, and there is
a significant wage difference between those with tertiary education and those with
secondary education or lower (ILO, 2018b). However, there are signs of a slowing down
72 A. SAKAMOTO

in general wage increases in some middle-income countries in the region, or wage

increases that are concentrated in a few growing sectors. For example, a recent study on
Malaysia suggests a declining trend of wage differentials by education levels over the
last 20 years (Arshad & Ghani, 2015). According to this study, the trend is most
pronounced between those with upper secondary and post-secondary education.
While further investigation is required to pinpoint the reasons, one of the contributing
factors may relate to a slow speed of business and economic upgrading that increases
skills premium in wages.
These changing structures of the economy and the labor market suggest that despite
the improved skills profile of workers, the impact of skills on employment outcomes and
business performance is far from automatic or simple.

Implications for existing efforts to promote inclusiveness in skills

development
The prospect of changing labor markets has significant implications for the skills policy
as a driver for achieving inclusive growth. At a general level, it is important that the
current efforts to make national systems more relevant, accessible, and quality-assured
continue, so as to generate more and better skilled workers. This is particularly so for low
and lower-middle-income countries where the education level of the workforce is low
and significantly lags behind the availability of jobs that require a higher level of
education. Developing a solid system for providing quality skills training itself is
a huge task but it is a fundamental starting point in confronting mounting and multiple
expectations on skills development.

Stepping up inclusion-targeted measures

Raising the general standard of education alone is not sufficient to improve skills levels for
all. By and large, national skill systems in many developing Asian countries remain centered
on institution-based formal training, largely managed and administered by governments.
Systems have not yet been able to transform themselves to meet the diversified needs of
workers and economies, and to expand beyond the government administrative framework.
A problem of limited accessibility to training for women and disadvantaged groups,
including workers in the informal economy and in rural or remote areas, is not new but
remains largely unresolved. While improving access to skills and technical and vocational
education and training (TVET) is only a part of the solution for achieving inclusive growth, it
is an essential starting point (Sakamoto & Sung, 2018a). It is important to recognize that
there is no level playing field to start with in terms of access to skills training for some
groups, and the prospect of growing skills-biased technology advancement and skill
polarization will deepen the existing inequality unless proactive measures are taken.
Notwithstanding existing efforts, there is a need to step up the provision of skills
to be more inclusive. Inclusive skills and/or TVET is often one of the objectives of
skills policy, but often lacks concrete implementation strategies supported by
strong monitoring and evaluation. Gender and inclusion strategies need to be
developed or strengthened, and applied throughout the skills system from plan-
ning for training intakes, recruitment of trainers and trainees, gender-sensitive
 INTERNATIONAL JOURNAL OF TRAINING RESEARCH 73

curriculum and training materials, delivery modes, and monitoring and evaluation.
While a gender breakdown of TVET data is often available, monitoring and evalua-
tion is not necessarily based on gender and/or inclusion baseline data and achieve-
ment targets to enable measuring of the progress on gender and the inclusive
TVET agenda of a country. Identification of employment opportunities and career
progression routes, especially in traditionally male-dominated occupations, includ-
ing jobs related to science, technology, engineering, and mathematics (STEM),
could also encourage more women to take up the related training (ILO, 2019).
Performance appraisal of training institutions should take into account the effort
and achievements for promoting inclusion in training. Good practices by training
institutions should be widely recognized and promoted to create momentum.
While a detailed discussion of different measures for inclusive TVET is beyond the scope
of this article, the potential of the recognition of prior learning (RPL) for promoting
inclusive skills and/or TVET for workers in the informal economy has been highlighted
and should be further explored (Mahrotra, 2018). Considerable skills training and learning
takes place on the job but most of these skills are not officially certified. RPL enables the
official certification of informally or nonformally acquired skills of workers, to increase their
employability and marketability. This is helpful from the point of view of promoting their
continuous skills upgrading, or retraining in the course of their working life, as certification
provides the basis for their access to formal training opportunities. However, effective
implementation of RPL requires further efforts, especially with greater involvement of
industry.

Improved capacity to respond to potential disruptions

Future labor markets will be increasingly fluid, uncertain, and unforeseeable. This
requires skills systems to nurture individuals who are more resilient and adaptable to
change. One of the important perspectives that needs to be cultivated both in the
providers and recipients of training, is not to see skills training as a one-off preparation
for an occupation but as a stepping stone for developing a long-term career (Sakamoto
& Sung, 2018b). This requires a life-course perspective of training in which ‘change’ is
a basic premise for approaching skills and jobs. The role of the system then is to
facilitate such career progression or change, by indicating different pathways for career
progression, and the relevancy and proximity of the existing skills set to the require-
ments of a new career(s). The premise here is that skills training for one occupation can
also be relevant to multiple related occupations within the same job cluster (Buchanan,
Wheelahan & Yu, 2018). This is particularly relevant in the effort for inclusive growth, as
those who are most vulnerable to job losses as a result of technology substitution are
working at the lower rungs of the value chain, including women who are highly
represented in operator and assembly jobs in the factory and/or those who have limited
education.
For the skills system, this may mean indicating the relevance of one qualification to
take up other related occupations (with less additional training than would be required
otherwise), or to broadening the existing qualifications to train individuals for multiple
related job roles. For example, in the construction sector, workers who can handle
multiple job roles such as bricklaying, plastering, and masonry are adapting better to
74 A. SAKAMOTO

changes in demand for any of these occupations (Sakamoto & Sung, 2018b). As more
routine and manual jobs are prone to be substituted by technologies (e.g. Asian
Development Bank [ADB], 2018; ILO, 2016a), those categories of jobs should be prior-
itized for the above initiatives.

Improving employability in the time of uncertainty

Another important perspective is that if jobs of the future are difficult to foresee, the
skills system needs to not only equip individuals with skills as the economy demands but
also develop individuals with strong capabilities that who can take their career devel-
opment in their own hands (Sakamoto & Sung, 2018b). It points to the importance of
developing strong learnability and adaptability to navigate through increasingly uncer-
tain labor markets. Buchanan, Wheelahan, & Yu (2018) indicate that solid basic education
and a strong learning disposition are key attributes for successfully navigating a career.
The importance of emotional and noncognitive skills, such as curiosity and persistence,
has increasingly been highlighted, among others in the recent Programme for
International Student Assessment (PISA) and Programme for International Assessment
of Adult Competencies (PIACC) study (OECD, 2018). This takes the existing efforts on soft
skills, such as communication, teamwork, and problem solving, to a new level with
increased appreciation on personal attributes and learning disposition that underlie the
development of individual capabilities such as learnability and adoptability.
How can these skills and capabilities be best nurtured? The prevailing approach
centers on the 21st century skills (World Economic Forum & Boston Consulting Group,
2015) and competency-based training. However, an emerging approach stresses that the
development of human capabilities is more complex as they are closely linked with
health including psychological, physical and emotional development, and cannot be
based on a set of limited, often narrowly defined units of predefined competencies
(Buchanan, Wheelahan & Yu, 2018). The new approach also highlights that the devel-
opment of those capabilities are more contextualized and different from one occupa-
tional context to another. This indicates that nurturing these capabilities takes place
over a relatively long time span, and in a contextualized environment. The emerging
perspective suggests that combined with solid basic education, generic skills are often
best acquired in the context of mastering specific disciplinary, trade or professional
expertise (Buchanan, Wheelahan & Yu, 2018).
The increased importance of individual capabilities, beyond the common notion of
skills sets, thus brings the school education and training much closer. Skills policy is
required to take a life-cycle approach, building upon school education. The fact that
those who are most vulnerable to potential labor market disruptions tend to be those
with a low level of education requires urgent action. This requires strengthening the
education sector on one hand, and further integrating basic education and skills as part
of a broader training effort to nurture a trade, or profession (as opposed to acquisition of
narrowly defined sets of generic competencies). However, taking a broader approach to
skills training potentially competes with the demand for narrowly defined but specific
and short skills training that prepares individuals for immediate jobs. The latter is
particularly important, in fact, for those who cannot afford to be on long-term training
on a full-time basis. Not to leave these workers further behind, it is critical that a future
 INTERNATIONAL JOURNAL OF TRAINING RESEARCH 75

skills policy can bridge short-term training for immediate jobs with a program for
developing broader capabilities that support long-term employability.

From national to local: strengthening capacity at the subnational level

One of the key elements in promoting inclusive growth through skills training relates to
a structural issue, and a country’s ability to strengthen implementation capacity at the
subnational level. Many countries in developing Asia, especially those at the upper
middle-income level, have developed a sound policy framework and management
structure for their skills systems. However, the actual implementation of policy is widely
acknowledged to be a challenge. Weak capacity at the local level, both in local govern-
ment and training institutions, has been highlighted as a key challenge for many years. It
is important that decentralization and local capacity building form part of the skills
policy for inclusive growth, given the persistent rural–urban gap, in terms of poverty,
wage levels, and limited employment opportunities that perpetuate a vicious cycle.
While the central government continues to play a vital role in coordination and
management of the system, including policy and priority setting, quality assurance,
coordination, information management, and monitoring and evaluation, in order to
maintain coherence of the system, significant capacity building at the local (subnational)
level should be given priority. It is important to recognize, however, that improved
capacity of the local administration and training institutions in delivering quality training
alone is not sufficient to generate improved employment outcomes and living standards
in local areas. The effort needs to be linked and coordinated with local economic and
employment development plans. This takes us to explore how skills policy needs to deal
with the issue of the ‘demand’ for skills.

Skills as part of economic upgrading and quality job creation

Another major challenge in promoting skills to achieve inclusive growth relates to the
rather limited scope of the existing skills policy, which focuses heavily on the supply side
of skills. While there is still significant work needed to strengthen the system to generate
more and better skilled workers, as discussed above, there is a little attention given to
the impact of skills development, i.e. whether and to what extent the skills that the
system generates actually get used and are rewarded (Sakamoto & Sung, 2018a). This is
an important question for the pursuit of inclusive growth through skills development,
because unless investment in skills gets translated into better jobs and stronger busi-
nesses, there is little impact of skills in raising living standards and working conditions
(which is a main part of sharing the fruits of economic growth).
There is a tendency to assume that investment in skills leads to improved employ-
ment and business performance when in fact how skills are utilized and rewarded are
influenced, or conditioned by the specific business context, and thus cannot always be
assumed (Sakamoto & Sung, 2018b). If the business is competing at low cost, low price,
and not high value production, there is a little prospect for the company to improve
working conditions or to require higher skilled workers (Sung, 2018). Skills will have little
influence toward improving wages if the nature of the job is as such that it does not
require higher skills.
76 A. SAKAMOTO

Sung (2018) highlights a curious lack of attention to business models in attempting to

understand the level of skills utilization. Skills utilization varies depending on the nature
of the business, business strategy, and type of product and services. This means that the
skills contribution to business performance is highly variable even though workers have
similar qualifications and job title. For example,

Financial services where a business can be conducted with customers offered identical (or
narrow range of) financial products, such as housing mortgages, lifestyle loans . . . . This
business is relatively standardized, treating each customer more or less the same. The
opposite approach is to treat each customer as unique with the service provider devising
a bespoke financial service package to suit a customer’s needs (such as high-net worth
banking). (Sung, 2018, pp. 28–29)

More innovative value-added business models (products and services) thus tend to be
associated with a higher level of skills utilization.
In addition to business models and strategies that companies adopt, the broader
business environment, including the position of the company, or unit, within the
structure of the business network can also influence the levels of skills utilization and
benefits to individual workers as a reward of higher or improved skills. By analyzing the
network business model of Japanese companies, Yamazaki (2018) highlights that the
more a company is positioned on the periphery of the network (in short, as suppliers or
subcontractors), the heavier the pressure for cost reduction and the more limited the
room for new product development or diversification. This diminishes the need and
opportunity for skills upgrading and the full utilization of skills. Even though workers
may increase their skills, the position of the company in the network is such that it
prevents the company from improving wages and working conditions.
The situation depicted above is in fact familiar and mirrors those of subcontractors and
suppliers in the supply chains operating in many developing Asian countries. However,
the situations there outside of Japan are far more challenging. Yamazaki notes that in the
case of Japan, the negative impact of this corporate hierarchy had been somewhat
mitigated in the past, as there was a social consensus that the parent company (or core
part of the business network) took responsibility for the overall growth and welfare of all
companies (and their employees) that were members of the network.
Within the company, the level of skills utilization also varies depending on the quality
of jobs. The ‘quality of jobs’ here is defined not only by the wage level, working time, or
job security but also broad (as opposed to narrow) scope of the job design and the level
of autonomy granted to the job holder (Freebody, 2016). Sung (2018) finds that the
features of poor quality jobs (narrow scope of the job, limited autonomy and poor
working conditions) are closely associated with those of low-skilled jobs, whereas the
features of better quality jobs as described above are more present in higher-skilled jobs.
A key issue for many middle-income countries in the region is creating more quality
jobs to achieve inclusive growth. A large informal economy and rural economy in
developing Asia indicates a large number of poor quality jobs, which poses
a significant challenge to inclusive growth. The economic competitive strategy centering
on foreign direct investment for offshore production based on low labor cost has led to
massive job creation and rapid economic growth in the region in the past. However, the
limitation of such a growth model has been highlighted (e.g. El Achkar Hilal, 2018; ILO,
 INTERNATIONAL JOURNAL OF TRAINING RESEARCH 77

2018a). Policy makers in low- and lower-middle-income countries in the region are
acutely aware of the need to diversify and upgrade the economy to move up value
chains and compete with high value-added goods and services. A challenge of pursuing
inclusive growth requires upgrading a significant part of the economy, especially
employment-intensive sectors, to compete on value-addition and high skills. If skills
are to contribute significantly to inclusive growth, investing in skills needs to be part of
economic upgrading and creation of better quality jobs. Except export-oriented and
large competitive companies, skills are not yet part of the business competitive strategy.
A natural question then is how can skills be part of this process of business and
economic upgrading? There is a persistent division between business and the training
sector. Skills are too often discussed in a dichotomy of demand or supply, at least in the
policy arena. A more helpful perspective is to see skills as an integral part of the demand
creation – i.e. business upgrading and/or competitive strategy. In Singapore, there are
23 industry sectors that have developed industry transformation maps. Each map is
drawn based on the vision of the sector’s future growth, in light of the plans on
technology upgrading and export orientation, and includes workforce skills as the key
element of the map to indicate what and how the workforce’s skills will assist in the
realization of the sector’s vision (Future Economy Council [FEC], Singapore, 2019). As
part of the effort to retain ‘talent’ in the sector, some maps elaborate on how workers
can achieve progress in their careers in the sector, the required levels of skills and
qualification, and how that can help to improve remuneration. This career progression
map helps facilitate not only the retention of high-caliber employees within the sector
but also motivates them to pursue skills upgrading or retraining. Indicating increased
pay for higher skills also encourages employers to commit to upgrading of the jobs (and
business) to make best use of the higher skills. In Singapore, the above ‘integrated’
approach to skills development is supported by a solid supply side of the skills system
under the Skills Future Programme (SkillsFuture Singapore Agency, 2019). A useful
insight from the experience is the importance of a balanced policy approach to skills
development that takes into account both demand and supply perspectives.

Need to take a societal approach in managing transition

Anticipating the future of work presents us with both new opportunities and challenges.
Some of the challenges are linked with issues related to the transition in seizing the new
opportunities. As noted earlier, transition to a greener economy and technology
advancement are part of the broader megatrends that are shaping the future of work,
as a source of both job creation and job losses (ILO, 2016a, 2016b, 2017). As a result, the
overall number of jobs available in the economy may not change drastically as a result,
and the impact of the transition on existing employment is in fact still being debated.
However, it is important to note that persons who have gained a new job are not
necessarily those who have lost a job (e.g. El Achkar Hilal, 2018), and how well we can
support the employment of those who are negatively affected by the transition is critical
for addressing the objective of inclusive growth (Sakamoto & Sung, 2018b).
This leads to the importance of retraining and the skills upgrading of workers,
although the issue is not simple. Those who are most vulnerable to job loss are workers
at the lower rungs of value chains, and those who have limited educational
78 A. SAKAMOTO

qualifications. A study that examines enterprise restructuring and employment resettle-

ment in the steel sector in the People’s Republic of China highlights that older workers
and those with limited education had difficulty in employment resettlement while those
who are relatively highly skilled remained to take up a reprofiled higher skills job after
additional training (Zhang, 2018). Support for finding a new job and shifting career
requires a holistic approach that combines the recognition (and if possible certification)
of existing sets of skills; career guidance with information on employment opportunities
and the applicability of the current skills sets to a prospective job; transitional financial
support including training fees; and peer groups support, to name a few. These supports
would be in addition to specific retraining and skills upgrading.
In minimizing job losses in the first place, social dialogue between employers and
workers plays a most critical role. It takes time to prepare for a career shift. A dialogue
over enterprise restructuring, including mechanization and technology upgrading, is
critical to explore the possibility of job reprofiling and provide workers with necessary
time for skills upgrading and retraining, or other preparations either for the reprofiled
jobs or jobs outside of the current company.
Managing the transition well thus requires an approach that is holistic and involves
multiple stakeholders, which include governments, employers, workers’ organizations,
as well as individual workers. The adjustments should be treated as societal and
institutional and not just as the problems of individuals (Sakamoto & Sung, 2018b).
This is important for inclusive growth, because ‘[t]he burden of change that benefits
everyone should not be placed disproportionately on a few’ (Labour Network for
Sustainability, 2018).

Addressing the underlying issues for inequality

The pursuit of inclusive growth reminds us of the role of prevailing values and norms
that structure the context of work today. These values and norms, consciously or
unconsciously, condition certain social groups to engage in employment. As a result,
they give different prospects for utilizing and getting rewarded for their skills (Sakamoto
& Sung, 2018b). Gender bias is one of the prime examples of a norm that continues to
underline occupational segregation and career progression among women. While STEM-
related jobs have strong prospects for expansion in the future, women are under-
represented in the STEM field of education and training. Even in those few cases
when gender parity has been achieved in education outcomes in the STEM field (e.g.
Thailand), this has not been translated into parity in employment outcomes as many
women opt not to pursue careers in the STEM field (Dahlquist, 2018; United Nations
Educational, Scientific and Cultural Organization [UNESCO], 2016). Their STEM skills and
knowledge thus remains underutilized and return on investment untapped. Gender
inequality in pay continues to be an issue, regardless of the parity in education and
skills qualifications (ILO, 2018b).
As some countries are heading toward an aging society, older workers are another group
that is struggling with prevailing values and structures that condition the opportunity for
employment. One of the main motivations for older workers to continue working is
economic vulnerability (Ko, 2018). While the importance of retraining and upskilling tends
to be highlighted as a support for their continuous employment, Ko (2018) argues that the
 INTERNATIONAL JOURNAL OF TRAINING RESEARCH 79

issue is more deeply imbedded in the existing ‘rules’ of the workplace that condition and
value their skills. These include the prevailing age structures in the workplace and negative
perceptions of older workers’ ability to learn and apply new skills.
The above discussion indicates that prevailing values and norms continue to mediate,
and often limit, the inclusion of certain social groups and undervalue their skills.
Changing these values and norms, especially if they are unconscious, is certainly no
easy task; however, it is critical if skills are to make a significant impact on creating better
employment outcomes and are to be a key driver of inclusive growth.

Conclusion: towards the horizon of a new skills policy

The labor market of the future will provide new opportunities and challenges, and
skills development policy must adapt. The prospects of ever advancing technology
combined with the challenge of making economic growth more inclusive indicates
that policy needs to respond to both competitive and high-end needs of skills, while
addressing the need of those with low-to-middle education and skills levels.
Addressing the need of inclusive growth requires multifaceted interventions, includ-
ing stepping up the efforts for inclusive skills and/or TVET, mitigating the negative
impacts of labor market disruptions, reorienting the approach to skills development
for increasingly uncertain labor markets, and increasing the capacity of and emphasis
on subnational level actions.
This article has emphasized the importance of paying greater attention to the impact
of skills development efforts and whether the skills that the system generates are
effectively utilized and are positively contributing to the upgrading of business and to
improved wages and other working conditions. These are key goals for achieving
inclusive growth. The positive impact of skills on employment outcomes and business
performance is often assumed but does not always hold. The article indicated how skills
impacts are influenced and sometimes conditioned by business strategies; types of
products, services, work organization and corporate structures; as well as underlying
values and norms that condition structures and practices of employment.
Creating or improving the quality of jobs is the key for achieving inclusive growth in
the region. For that, this article has argued that the persisting division between business
and the formal training sector is not helpful, and that an effective skills strategy needs to
be an integral part of demand creation.
Thus, the ability to respond to the above policy challenges, to a large extent, hangs
on the extent to which policy makers in skills development can step out of the tradi-
tional boundaries and framework of skills development and TVET. It requires overcoming
the persisting divides or gaps that exist in skills efforts today between formal and
nonformal or informal training, between national and subnational levels, and between
business and formal training. We also need to go beyond approaching skills develop-
ment through a dichotomy of demand and supply. Increasing the impact of skills on
creating better employment and business performance calls for demand and supply to
be more integrated.
80 A. SAKAMOTO

Note
1. This article draws on Sakamoto, A & Sung, J. (eds.), Skills and the future of work: Strategies for
inclusive growth in Asia and the Pacific ILO (2018a).

Disclosure statement
No potential conflict of interest was reported by the author.

Notes on contributor
Akiko Sakamoto is Senior Skills and Employability Specialist at the International Labour
Organization (ILO) for Southeast Asia and the Pacific and is currently based in Bangkok,
Thailand. She has undertaken policy advisory, project formulation, and project implementation
work, covering a wide range of skills-related issues over nearly 20 years mostly in the region. These
include: formulation of national policies on skills development; reform of skills/TVET systems; skills
for enhanced productivity and employability; anticipation of skills demands; qualifications frame-
work and skills recognition; skills for green jobs; and skills for the informal economy workers and
disadvantaged groups. She holds a doctorate in Education with a focus on workforce skills
development.

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