SOUTHEAST ASIA needs to upskill its workers to support productivity growth and improve resiliency against global crises, the Organisation for Economic Co-operation and Development (OECD) said.

“In Southeast Asia, workers are struggling to reskill and upskill quickly enough to adapt to changes in the world of work, and employers who often encounter difficulties in finding the skills they need as productivity becomes a more important driver of the region’s economic growth,” the OECD said in a report.

“To thrive in the world of tomorrow, people in Southeast Asia, especially those from disadvantaged groups, need access to high-quality opportunities to develop and use their skills over the life course, which would help them transition out of informality, boost productivity and promote individual and societal well-being,” it added.

The report said the coronavirus disease 2019 (COVID-19) pandemic, the Russia-Ukraine crisis, and other crises disrupted the economy and increased the risk of inequality in education and labor markets in Southeast Asia. 

The development of skills in the region also “remains highly unequal across groups.” 

“Consistently across all levels of education, access to learning is limited for learners from low-income households, remote areas, ethnic minorities and learners who have disabilities,” it said.

The report said that lack of access to training among workers in Southeast Asia’s sizeable informal economy is one of the region’s “principal policy concerns.” There are about 244 million informal workers throughout the region who do not have access to social security or employment benefits, including employer-sponsored training.

“These megatrends and challenges reinforce the need for Southeast Asia to design forward-looking and dynamic skills policies,” it added.

The OECD cited the potential of global value chains to allow various parts of the production process to be performed in a number of locations.

“Many Southeast Asian countries are now major players in the world market, both as exporters and importers, and have thus attracted significant investment in services, trade, communication and manufacturing sectors,” it said.

“When Southeast Asian countries have a highly skilled workforce, this enables them to participate in the higher end of the global production chain characterized by high-skilled activities. Participation in global value chains can lead to productivity gains, but achieving those gains is dependent on Southeast Asian countries having people with the right sets of skills,” it added.

There is also a need to adopt high-performance workplace practices to facilitate the more extensive use of skills among workers. 

“The low use of skills in Southeast Asia stems from the lack of an enabling environment for intensive skills use in the workplace and limited management capacities among employers,” it said.

Southeast Asian countries can also benefit from policies that promote the demand for the use of higher level skills in innovation and entrepreneurship, according to the report.

“While enrolment in science, technology, engineering and mathematics (STEM) programs has risen in all countries in Southeast Asia over the last decade, countries invest only 0.59% of their gross domestic product on research and development activities, in comparison to 2.57% in OECD countries,” it added.

The OECD also noted how migrants can increase the supply of skills in the country and contribute to economic growth.

In the region, Brunei, Malaysia, Singapore and Thailand have net migrant inflows, while Cambodia, Indonesia, Laos, Myanmar, the Philippines and Vietnam have net migrant outflows.

New technologies and digital infrastructure are spreading rapidly throughout Southeast Asia, the OECD said.

“The region is projected to be one of the world’s fastest-growing data center markets in the next few years, exceeding the growth in North America and the rest of the Asia-Pacific,” the report said.

The report also found that while horizontal and vertical coordination mechanisms for skills policies in Southeast Asia have been established, the implementation remains difficult.

“Countries have established oversight agencies, inter-ministerial bodies and working groups, among other mechanisms, that could serve as platforms to work a common skills agenda across the whole of government. However, Southeast Asia still scores poorly on the Bertelsmann Transformation Index (BTI) indicator on policy coordination, which measures the extent to which governments can coordinate conflicting objectives into a coherent policy,” it added.

The OECD said that outside of government, stakeholder groups can make important contributions to skills policies, but engagement with them remains low in Southeast Asia.

“It is important to coordinate with labor market actors, such as employer organizations, who can help align skills policies with industry demands, as well as with trade unions, who can represent the interests and needs of workers,” it added. — Luisa Maria Jacinta C. Jocson