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How a sectoral approach to skills development helps to foster economic growth

10 Aug 2023
Jane Rexworthy, Executive Director at People 1st International

Equipping the workforce with the skills required to meet the needs of today and the future is a critical factor in supporting business growth and economic development.

As megatrends rapidly reshape the world of work, forward thinking approaches to education and training are in strong demand. Globalisation, technological advancements and climate change are transforming labour markets. New occupations are emerging and replacing others and the required skills and competencies are evolving. Collectively, these create challenges in the responsiveness of technical vocational education and training (TVET) systems to meet the changing skill needs of industry.

Embracing a sectoral approach to skills training has been proven to anticipate future industry needs, fostering sector growth and development. It also provides the foundation to take an employer-led approach to skills development. Every industry is unique with its own set of skills and workforce challenges. By adopting a sectoral industry-led approach, employers can collaborate to address their talent pipeline challenges and help reduce skills gaps.

The sectoral approach can also promote more effective cooperation and coordination between the private sector and TVET providers which helps to connect education and training to labour market needs and the development of relevant skills. This alignment of skill supply with demand is not just crucial; it’s transformative.​ Not only does it realign the provision of TVET content to meet current and future skills needs, but it also opens the door for delivery mechanisms to adapt to sector needs.

A number of countries around the world have adopted a sectoral model. In the UK alone, sectoral approaches have taken a number of shapes, spanning from the traditional apprenticeship focus through to Industrial Training Boards in the 1960s, Industry Training Organisations in the 1980s, National Training Organisations in the 1990s and in 2001, their successors the Sector Skills Councils[1].

Australia, an early adopter of a sectoral approach to skills development, introduced a VET system in the 1980’s with foundations focused around competency-based training. One of the key elements of the system was training packages that describe the skills and knowledge that individuals need to possess to perform effectively in the workplace. A crucial aspect of the training packages was that their development is industry-driven in order to meet the needs of industry, and what were known as industry skills councils managed their development.

Fast forward to 2023, and Australia has recently undergone a series of industry engagement reforms to strengthen the role of industry and empower them to drive reforms to Australia’s VET sector to ensure employers and individuals can access the right skills at the right time. Jobs and Skills Councils have been established as a national network of industry-owned and industry-led organisations to provide strategic leadership in addressing skills and workforce challenges. These newly formed organisations will identify skills and workforce needs for their sectors, map career pathways across education sectors, develop contemporary VET training products and support collaboration between industry and training providers.[2]

Across a number of other countries and sectors, we’ve helped to implement and strengthen sectoral models through a sector skills council approach:

  • Uganda: The Tourism & Hospitality Sector Skills Council was looking to attain its objectives and make a paradigm shift in skills development in the sector, from supply-to demand-led training. In so doing, the Council needed technical advisory support to gain the requisite knowledge, skills and experience, and expertise to enhance its systems, approaches and processes and deliver on its mandate and objectives. The support we provided contributed to the strengthening of the sector skills council. Read the case study.
  • Philippines: People 1st International were contracted by the VET Toolbox to support the organisational development of the three Sector Skills Councils: Analytics Association of the Philippines; Semiconductor and Electronics Industries in the Philippines Inc. and Philippine Chamber of Commerce and Industry Human Resources Development Foundation). Our role was to support the governance structures, action plans and partnerships with industry and public providers. Read the case study.
  • Jamaica: Agribusiness, logistics, and the manufacturing sectors in Jamaica are identified as having significant growth and productivity potential. To maximise on this opportunity it’s critical that the skills of the workforce are developed aligned to industry demands and employment prospects, particularly for young people. We partnered with our clients to explore the feasibility of implementing a sector skills council (SSC) model in these industries to help enhance skills development in these growth sectors. Read the case study.

Our experience shows there are some key factors that hinge on the success of sectoral approaches to skills:

  • Industry-led: Employers must be in the driving seat. Employer ownership gives greater power to industry to specify what they want from technical vocational education and training. This spearheads a demand-led skills policy to ensure that training can closely support industries and those who work in them.
  • Effective employer engagement: To engage employers, its critical to highlight the links between investment in skills development and productivity and profitability to help incentivise them to drive the vocational skills system.
  • Collaborative approach: A multi-stakeholder approach in which there is a shared responsibility between the government, employers and the TVET system for investment in skills development.
  • Cross sectoral links: Some industries have large supply chains so it’s critical to gain central agreement of the sectoral footprint and identify the common areas for collaboration on the development of standards and curriculum, which can prove to be more effective.

Sectoral approaches to skills development form an important element in supporting business growth and economic development wealth, championing employer engagement in skills development, whilst developing better linkages between employer demand for technical vocational education and training supply. To discover how we can support your sector or region to strengthen a sectoral approach to skills, get in touch.


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