c apabilities for productive transformation and employment irmgard nübler research department...
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CAPABILITIES FOR PRODUCTIVE TRANSFORMATION AND EMPLOYMENT
Irmgard Nübler
Research Department International Labour Office
Prepared for the High Level Symposium on Industrial and Trade PoliciesTehran, 10 -11 October 2015
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ECONOMIC TRANSFORMATION: TWO DISTINCT PROCESSES
Develop productive capacities - investment
Build up domestic capabilities - learning
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A CONCEPT OF CAPABILITIES
Explains
how capabilities shape economic transformation and catching up
where domestic capabilities reside
how capabilities evolve
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TWO DIMENSIONS OF CAPABILITIES
1. Options for diversification – feasible patterns of economic and technological transformation
2. Competences to innovate, invest and manage transformation process – sustained and rapid process
Successful catching up requires a continuous increase of options and competences
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OPTIONS FOR DIVERSIFICATION
reside in the particular mix of general, technical, cultural and business knowledge in labour force
the more diverse, sophisticated and complex the knowledge base, the wider the range of new products and industries which can be developed.
Policies to develop wide options Education, training, industrial, technology policies
OPTIONS FOR DIVERSIFICATION
Educational attainment structure and development of manufacturing A TYPOLOGY
Share of no schooling, incomplete primary, complete primary, lower secondary, upper secondary, post secondary education
INDUSTRIAL STRUCTURES IN STRONG MIDDLE AND MISSING MIDDLE COUNTRIESIAI: INDUSTRIAL ADVANCE INDEXTAI: TECHNOLOGICAL ADVANCE INDEX
Strong middle: increase both high IAI and TAI (industrial widening and deepening) Missing middle: low and medium IAI level, increase TAI at given IAI level
0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.650
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
SYR
BOL
SLV
BGRARG
CRI
THABRA
MUSNIC ECU
PERURY
VEN
CHLBRB
COL JORZWE
ZAF
Missing middle EAS countries
Industrial Advance Indicator
Tech
nolo
gica
l Adv
ance
Indi
cato
r
0 0.1 0.2 0.3 0.4 0.5 0.6 0.70
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
CUB FJIBWA
LKA
CYPROM
POLHRV
CHNSVN
SVK CZE
MEX HUN
MYS
SGP
PAN
HKG
PHL
IRLKOR
TWN
ISR
RUS
Strong middle EAS countries
Industrial Advance Indicator
Tech
nolo
gica
l Adv
ance
Indi
cato
r
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COMPETENCES FOR SUSTAINED AND RAPID TRANSFORMATION PROCESS
Competences exist at collective levels of Enterprises (in technological, management and
organisational routines Governments (in policy formulation, implementation and
evaluation procedures) Societies (in formal and informal institutions)
Acquired in a process of learning by doing and practice Learning is supported by policies and institutions that
provide learning opportunities (carrots) and pressure to learn (sticks)
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CONCLUSION Industrial development requires process of building
productive capacities (investment) and domestic capabilities (learning)
Capabilities cannot be imported Governments are challenged with formulating a
comprehensive learning strategy at different places and at different levels
The development of capabilities is a fundamental element of industrial and economic development strategies.
Transforming economies: Making industrial policy work for growth, jobs and development
Transforming Economies:
Making industrial policy work for growth,jobs and development
EDITORS:José Manuel Salazar-XirinachsIrmgard NüblerRichard Kozul-Wright
2014ILO Geneva
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KNOWLEDGE STRUCTURE OF THE LABOUR FORCE AND RECOMBINATION FOR NEW PRODUCTS
Different knowledge elements in the labour force (dots in blue space)
A product P is the combination of different , complementary knowledge elements.
P1 –P5 are the products that can be produced with the knowledge elements embedded in the labour force
EDUCATIONAL ATTAINMENT STRUCTURES (EAS)AND OPTIONS
• Strong Middle (SM) –broad supply of complementary knowledge elements and occupations required in manufacturing (technicians, clerks, machine operators, managers, engineers etc)
• Missing Middle (MM) – extremely low supply of occupations based on upper secondary education required in manufacturing, limits the expansion of manufacturing base, but allows to develop small high tech sector, and advanced service sector,
• L-shape: very limited supply of secondary and post-secondary education based occupations, seriously limits development of manufacturing even at low tech level.
Educational attainment structures and industrial development levels – empirical findings
L L+ Dual Missing middle Missing middle + Strong middle Strong middle +0
0.1
0.2
0.3
0.4
0.5
0.6
MLI
BGD
IRNSYR NIC BWA
PANRWA
GTM
JAM
BOL
ECU
CHN
HKG
NER
IND
KWT
SLV
PER
HRV
PHL
BEN
LSO
BHR
ARG
VENCUB
KOR
MWI
PAK
SWZ
BGR
CHL
CYP
TWN
CAF PRY
GHA
CRI
URY
CZE
IRL
CMR ZMB
DZA
BRA
COL
FJI
ISR
PNG
TTO
THA
ZWE
HUN
TZA
EGY
MUS
BRB
MYS
UGA
TUNJOR
MEX
TGO
IDNZAF
POL
GMB
ROM
KEN
RUS
SDN
SGP
NPL
SVK
SEN
SVN
LKA
Educational StructureIndu
stria
l and
tech
nolo
gicc
al a
dvan
ce (I
TA)
Inde
x
IMPORT CONTENT OF EXPORTS: EMERGING ECONOMIESin foreign value added share of gross export (bubble size)
0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.70.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
ARG
BRA
BGR
CHL
CZE
HKG
HUN
INDIDN
IRL KORMYS
MEX PHL
POL
ROM
RUS
SGP
SVKSVN
ZAF
TWN
THA
Industrial Advance Indicator
Tech
nolo
gica
l Adv
ance
Indi
cato
r
Missing middle EAS Strong middle EAS L+ or Dual EAS
• Indicates vertical specialisation of countries and integration in value chains• Countries with SM EAS (green) increased both IAI and TAI • Through vertical specialisation (show largest bubbles) • Generating productive transformation
INDUSTRIAL AND EDUCATIONAL ATTAINMENT STRUCTURES IN SUB-SAHARAN AFRICA
L-shapeL+DualMMSM