Martin C. Spicer, regional Head for Education, Services, Manufacturing, and Agribusiness in Latin America and the Caribbean at the International Finance Corporation (IFC), recently wrote an article for Project Syndicate where he analyses the great challenge Latin America faces in terms of skills mismatch.

Spicer says that the region could be on the verge of an epochal transformation. In the years to come, middle-income jobs – particularly in the services sector – are expected to account for nearly all of the region’s employment growth. Experts state that Latin American countries could add approximately 14-23 million well-paying jobs through 2018 – if employers can find workers with the skills they need.

Spicer points out that the problem is that Latin America’s education systems are struggling to produce enough skilled workers to raise productivity. Over 1/3 of companies in the region claim that employees’ low skill levels are a major business constraint.

In order to boost economic growth, Latin America must invest in a skilled workforce. By expanding access to high-quality education, from public and private educators alike, the region’s countries will increase productivity, raise living standards, and reduce inequality.

To start facing this challenge, countries in the region should acknowledge that increasing education budgets and keeping students in class longer, though important, are not enough. For instance, Mexico and Brazil spend 5-6% of GDP on education, more than many developed countries. However, the quality of their programs does not reflect this spending, and a stronger focus on tertiary education is needed.

Furthermore, according to Spicer, Latin American governments spend about 1/3 less on tertiary education (as a share of GDP) than advanced economies. During the first decade of the 2000s, expenditure per student in the region fell, as enrolment numbers raised, having a negative impact on the quality of education.

The second step is for Latin American countries to promote – and enforce – clear quality standards for public and private education. This should be accompanied with financing solutions that make quality higher education more affordable and accessible to all socioeconomic groups.

Thirdly, Latin America should develop education programs that are connected to the needs of the market. This is particularly important in vocational training for technical fields, where Latin America trails most other regions of the world.

“The skills gap cannot be analysed just from the educational perspective. The speed at which changes occur in the labour market will always be way faster than the update of educational contents. There is a need for a deep understanding of the skills required nowadays. Most importantly, a survey of the skills that shall be required in the future in order to develop training programs for employment and entrepreneur projects based on demand is vital. Public and private employment services may play a key role in transitions, training workers to improve their employability and productivity. Latin America has huge potential if it invests on human capital”, said Martin Padulla, founder and managing director of staffingamericalatina.

We strongly recommend reading Martin Spicer’s entire article by clicking here.