By 2027, around 1.1 billion workers, or 6 in 10 workers globally, will need to be retrained. This is due to shifting skills demand in the face of automation, digitalization, climate action, and other global megatrends. Skills demand is shifting so fast that nearly 39 percent of skills required for jobs today will transform and may even become obsolete.
These massive demands for reskilling and upskilling are occurring at a time when many young people are already struggling to transition from school to work due to skills mismatches. Over 20 percent of youth in low- and middle-income countries are not in education, employment, or training. Among young women in lower-middle-income countries, this rate rises to almost 40 percent. Around 450 million youth, 7 out of 10, are economically disengaged due to lack of adequate skills to succeed in the labor market. Further, 20 percent of firms globally cite workforce skills as a significant constraint to business development. This share is approximately 34 percent in the Middle East and North Africa and 55 percent in Latin America and the Caribbean.
Two types of skills are in high demand. First, higher-order cognitive skills, especially complex problem solving. A one standard deviation increase in complex problem-solving skills is associated with a 10 to 20 percent higher wage. Second, specific socio-emotional skills, especially adaptability and communication. In several countries, more than half of firms report shortages of workers with specific socio-emotional skills, such as commitment to work. The ability to adapt quickly to change is another socio-emotional skill highly valued by modern labor markets.
TVET systems can play a major role in delivering on the skilling opportunities countries face today. With their focus on workforce development, TVET systems can contribute to employment and productivity to better support sustainable economic transformation. When TVET functions well, graduates have the right skills for today’s jobs and are also prepared to adapt in the future as skills needs change.
However, TVET is not a popular option among students. This is especially true in low- and middle-income countries, where TVET enrolls relatively few students compared to the number in corresponding levels of general education and to TVET enrollment in high-income countries. Across 72 low- and middle-income countries, the share of secondary students enrolled in vocational programs was 9 percent in 2000 and 11 percent in 2020. Economies that do TVET well, such as the Netherlands, Germany, and Malaysia, experience higher demand for this track. On average, the share of youth in TVET increases with a country’s income per capita and remains below 10 percent in all regions except Europe and Central Asia.
Demand for TVET is low because it is often considered a second-tier educational track. TVET students are more likely to come from disadvantaged households compared to their peers in general education. Socioeconomic status can affect not only entry into TVET, but also the choice of specialization. Even students who are genuinely excited about TVET may become discouraged by sociocultural stigmas, misperceptions or uncertainties about returns, or diminished prospects for continued learning after completion.
Three types of reforms can help TVET systems better serve the skilling opportunity created by global labor market transformations. In line with the HCI theme of "Harnessing the Ways We Learn", these reforms will help TVET systems better harness unrealized opportunities by embracing more innovative approaches to skill-building. These reforms are flexible pathways, more demand-driven systems, and incorporating the science of adult learning.
First, there needs to be more flexibility between general and vocational tracks. Those who choose TVET should not feel they are irrevocably closing the door to general skills acquisition. The combination of general and technical skills is becoming highly valued, and even technical jobs increasingly demand higher-order general skills.
Second, flexibility through modularization and provision of hybrid TVET is important. This supports learning opportunities at times and locations that fit learners’ needs. For example, the Philippines introduced micro-credentials that give credit for smaller learning blocks that can be stacked into aggregated certifications and qualifications without needing to be completed consecutively. The country also provided online micro-credential learning in TVET for more than 1 million adult learners during COVID-19.
Third, another route to more flexibility is through Recognition of Prior Learning schemes that validate professional knowledge acquired in the workplace or in formal and non-formal studies. In Bangladesh, Recognition of Prior Learning in the TVET system increased the probability of finding employment and improved employment quality, including earnings and worker confidence, particularly for women.
TVET programs need to respond better to the reality of labor markets. In some economies this means responding to the needs of self-employment and the informal economy. In other cases it means responding to the transition to more digital and greener economies. This aligns with the HCI theme of "Harmonizing the Ways We Act", which emphasizes how impact multiplies when different actors work in synergy.
One way to do this is through better information on student aptitudes, program offerings, and labor market data by occupation. Skills assessments and career guidance can shape learners’ aspirations and labor market expectations.
Another way is to foster hands-on approaches including work-based learning through internships and apprenticeships. Inspiration can be drawn from the Educate! program implemented in Uganda, Rwanda, and Kenya, which connects upper-secondary students to TVET through an innovative curriculum focused on entrepreneurship and employability. This program has generated higher income, employment, and business ownership, particularly for females. Similarly, public-private partnerships in the automotive sector in Ghana, Morocco, and South Africa provide skills training funds for catalyzing training in priority sectors. This approach also helps ensure that TVET systems build transferable socio-emotional skills such as teamwork, resilience, self-confidence, negotiation, and self-expression.
Digital technologies, such as virtual reality training, can provide hands-on experience in a scalable and inexpensive way. Virtual reality laboratories used to train learners on computer networking configuration and troubleshooting in Zambia were both performance-effective and cost-effective. Similarly, Ecuador’s ActiVaR program is piloting the use of virtual labs with computer-based and virtual reality technologies in technical and technological institutes to deliver practical training. In China, Lenovo is working with tertiary institutes to train vocational students in high-tech areas such as cloud computing.
TVET systems must also attract those already in the workforce for upskilling and reskilling. To do this, they need to design their systems to work better for working-age adults, recognizing that adult brains learn differently. This can be done in three ways.
First, the brain’s ability to retain new information lessens with age. Therefore, adult learning programs have a better chance of success if lessons relate to everyday life. Both practical exercises and visual aids are effective in adult learning because they help memory.
Second, adults face significant stress, which compromises cognitive capacity. Creating emotional cues linked to learning content, such as goal-setting, can be an effective strategy to increase adult learning.
Third, adults face specific socioeconomic constraints. They have high opportunity costs in terms of lost income and lost time with their children, but TVET programs often have inflexible and intensive schedules. TVET programs with short modules delivered through mobile applications are particularly promising.
Disclaimer: This report has been prepared by the World Bank Group. The views and opinions expressed in this report are those of the authors and do not necessarily reflect the views, policies, or positions of the Human Capability Development Program (HCDP), the host of the Human Capability Initiative (HCI) conference.
.png&w=384&q=75)
