A few days ago, the Chilean Confederation of Production and Trade (CPC) introduced over 100 ideas to improve the country’s productivity, in other words, to do more and better using the same resources.

The business sector has taken responsibility for 41 of those ideas, and has started with a proposal linked to human capital: to improve the articulation of the private sector for technical and professional education.

 “There is no link between what the training centres deliver and what the productive sectors demand”, explained Joanna Davidovich, executive director of the Productivity Commission of CPC, who has been leading the work done by nine groups in different areas.

The CPC surveyed information about the training requirement of every productive sector. The goal is for the information to flow systematically towards training centres so they can update their contents to the demands of the market.

The CPC has come to the conclusion that professional training centres are key to promote social mobility. For that reason, it aims to develop a learning path for people who are interested. According to the Chilean Register of Students, 97% of people who study in technical high schools belong to the upper three income classification levels, while 53% of those enrolled in superior technical education belong to that income level.

Another issue to work on is the quality of the OTEC (Technical Organizations of Training). The first step taken has been to set a mechanism that enables companies to evaluate the OTEC.

A very sensitive issue is the simplification of procedures. A productivity observatory is being created to detect several specific and vital procedures in the processes for investment, entrepreneurship and for citizens.  An unbiased follow up of such procedures, with a methodology that can be replicated in time, shall be applied in order to asses those procedures.

According to the Executive Director, productivity no longer contributes to the 5% annual growth that Chile experienced for 30 years: “productivity used to contribute around 2 points per year. However, the situation has changed in the past few years and productivity no longer contributes to growth.”

Davidovich says that there used to be the belief that Chile could grow on a 5% rate forever. Nevertheless, growth rates are not guaranteed. Though there are external conditions that affect growth levels, internal conditions have a greater impact. An example is the speed of procedures. In order to start growing once again at a 5% rate, productivity must be improved, a proper environment for investments and entrepreneurship must be developed and uncertainty has to be eliminated.

The expert claims that “the labour reform has made the country lose the opportunity of introducing flexibility into the labour market. And international indicators show that flexibility is a key aspect”.

The executive director points out that there are in Chile lots of students aged 18 to 24 years old who could work while studying, and they cannot actually accomplish that as they cannot combine their school schedules with work. There are plenty of mothers with small kids who need flexibility to work a few hours and have proper kindergarten facilities.

“These sort of issues were not included in the reform, even though they were discussed. If we are going to take productivity and growth seriously labour flexibility should be included”, concluded Davidovich.