The ILO Global Employment Trends (GET), 2012 paints a challenging picture

If 2011 was tough then, all commentators see 2012 as potentially worse. Mature markets are stagnating and are looking to little or no growth over the next few years; the Euro crisis does not help. Then, there are relatively fast growth economies like the BRICS or the CIVETS and others. Each market is different but, they share a common problem – skills. There is a serious global skills shortage in three areas: the skills to run core businesses; the skills to upgrade current performance and, the skills to “future proof” an industry or develop the workforce for a new one. For example, renewables. There are serious gender issues and, the formal economy is failing to match the informal or shadow economy as a generator of jobs.

The ILO Global Employment Trends (GET), 2012 has just been released [24/01/12] and it offers a useful insight into a serious challenge for the world economy. The Executive Summary is clear: after three years of continuous crisis there is a global skills shortfall of 200 million – and increase of 27 million since the start of the crisis. We will need to create 400 million new jobs in order to avoid a further increase in unemployment. Youth unemployment is worsening and, high numbers are dropping off the employment radar completely. Anyway, what did you think of the play Mrs Lincoln! The key points:

  • Through 2016 the global unemployment rate will remain stuck at 6 %.
  • Youth unemployment, at 12.7%, is a serious issue – with youth three times more likely to be unemployed. In 2011, 75 million youth aged between 14-24 were unemployed – an increase of 4 million since 2007.
  • Nearly 30 million people have dropped out of the global workforce entirely – with over 6.5 million youths. Add these in and the figures worsen.
  • Globally the employment-to-population ration has fallen from 61.2 per cent in 2007 to 60.2 per cent in 2010 – the largest fall since records began in 1991.
  • Outside of Asia, Labour productivity growth in developing regions is lagging behind and this divergence exacerbates the problem – as does increased wage inequality in the developed world.
  • Among the working poor (900 million) there are an estimated 450 million living below $1.25 a day. This is progress – a reduction of 233 million since 2000.
  • Vulnerable employment has increased by 23 million since 2009.

This makes for a sobering read. Our own view is that the skills position is exacerbated by a collective failure to grasp the need to explore diverse and hybrid solutions.

  • For mature economies there has been a failure to re-tool the workforce to face fierce global competition and, a tendency to let the markets shake out failing companies and losing the skills for ever. As the Peabody Trust said in the 1930s, the unemployed are not like something to be left in a fridge and taken out when they are needed. Skills decline and need constant upgrading. Imagine pilots, doctors and emergency workers without constant training.
  • For emerging, developing and devastated markets – One-size-fits-all and boiler plating “best practice” (a dangerous concept) from the mature economies will not work. The majority world do not work in formal companies and demonising the informal economy does not help – any chance of recovery after emergencies would fail utterly without the can-do mentality and survival instinct of the informal economy.
  • For all economies – there is the challenge of unprecedented supply chain “integration”. This was brought home with a vengeance when the earthquake and tsunami hit Japan and, the floods hit Thailand. At a stroke, the global IT and auto component industries fell apart. Remember how the Kenyan horticulture industry (over 20 per cent of GDP) fell apart inside 24 hours – because of a volcano in Iceland.
  • A failure to innovate. A colleague in India and another in Africa commented to us recently that one their biggest frustrations is that the educational establishment in the UK seems obsessed with the drive to attract more foreign students to their campus in the UK. Whatever happened to remote learning; the use of technologies. I took a cab in Mumbai recently and the cab driver was downloading an English lesson – three minutes on the subject of welcome! Another colleague is learning Portuguese – he lives in Hull, UK and the teacher in Sao Paulo, Brazil. They use Skype. More effort is needed to innovate the way we learn AND the way we teach.

The Report itself takes us through the base data and focusses each issue with close analysis of local conditions. It is required reading for Policy makers and industry leaders alike. Here, we have summarised the summary, added a few thoughts and given the link to stimulate debate. As Chernychevsky wrote in Tsarist Russia – what is to be done?

 

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