Skills Development

Skills and Workforce Development

When done right, skills development can reduce un- and underemployment, increase productivity, and improve standards of living. Investing in upskilling or reskilling people for jobs of the future makes economic sense.

Skills development is at the center of changes happening in education and labor markets amid the global mega trends, such as automation, action against climate change, the digitalization of products and services, and a shrinking labor force, which are changing the nature of work and skills demands. Consequently, skills and workforce development systems must proactively adapt to fast transformations posed by automation, climate action, digitalization, and the evolving labor markets.

These evolving trends will redefine the paradigms of education and workforce development systems globally. In the dynamic landscape of the modern global labor market, education and workforce development systems must become more personalized, accessible (allowing for remote and hybrid learning), and continuous along throughout workers�� careers�C placing ��skills development�� at the heart of these global transitions. Moreover, skills systems globally (and notably in LMICs) will need to adapt to the fact that many workers will engage in freelancing/informal jobs or self-employment that need to become more profitable, productive, and conducive for economic growth.

To succeed in the 21st century labor market, one needs a comprehensive skill set composed of:

Foundational and higher order skills, which are cognitive skills that encompass the ability to understand complex ideas, adapt effectively to the environment, learn from experience, and reason. Foundational literacy and numeracy as well as problem-solving, communication and informational analysis are cognitive skills.
Socio-emotional skills, which describe the ability to manage relationships, emotions, and attitudes. These skills include being able to navigate interpersonal and social situations effectively, as well as leadership, teamwork, self-control, and grit.
Specialized skills, which refer to the acquired knowledge, expertise, and interactions needed to perform a specific task, including the mastery of required materials, tools, or technologies. Specialized technical and cognitive skills as well as entrepreneurship skills are included in this category.
Digital skills, which are cross-cutting and draw on all of the above skills, describe the ability to access, manage, understand, integrate, communicate, evaluate, and create information safely and appropriately.

Skills are a cornerstone for the green-digital transition. The development of skills can contribute to structural transformation and economic growth by enhancing employability and labor productivity and helping countries to become more competitive.

Yet, skills gaps are a main constraint, especially in LMICs, to achieve jobs rich economic growth for the digital and green transition. In this regard, most countries continue to struggle in delivering on the promise of skills development:

There are huge gaps in basic literacy and numeracy of working-age populations, as 750 million people aged 15+ (or 18 percent of the global population) report being unable to read and write, with estimates being nearly twice as large if literacy is measured through direct assessments. Large-scale international assessments of adult skills generally point to skills mismatches as well as large variation in the returns to education across fields of study, institutions, and population groups.
Megatrends such as automation, action against climate change, the digitalization of products and services, and a shrinking and aging labor force, will transform over 1.1 billion jobs in the next decade.
About 450 million youth (7 out of 10) are economically disengaged, due to lack of adequate skills to succeed in the labor market.
Over 2.1 billion adults need remedial education for basic literacy, numeracy, and socio-emotional skills.
About 23 percent of firms cite workforce skills as a significant constraint to their operations. In some African and Latin American countries, this share rises to 40�C60 percent.
Most African and most South Asian countries do not have data on workforce skills.
The global economy could gain an estimated US$6.5 trillion in the next seven years by closing workers' skills gaps, representing 5-6 percent of their GDP. Nonetheless, most countries invest less than 0.5 percent of the global gross domestic product in adult lifelong learning.

Moreover, the COVID-19 pandemic has brought the pre-crisis vision of equitable, relevant, and quality skills development into sharper relief, adding unforeseen urgency to the calls for reform and highlighting the huge costs of inaction. As a result of the pandemic, 220 million post-secondary students (est.) dropped out of school or lost training opportunities.

The key issues countries need to tackle for skills development are:

Access and completion. Across the world, investments in education and skills development��from preschool through post-secondary education to vocational training��have high returns. The wage penalty for low literacy is nine percentage points in Colombia, Georgia and Ukraine, and 19 percentage points in Ghana. And the opposite is also true: in Brazil, graduates of vocational programs earn wages about 10 percent higher than those with a general secondary school education. Still, provision of equitable access is a challenge in many low-income and middle-income countries.
Adaptability: The rapid pace of technological advancements and evolving labor markets can make technical and specialized skills quickly outdated. On the contrary, transversal skills, such as critical thinking, problem-solving, and adaptability, will become more transferable and resilient to changes in the job market. Evidence shows that post-secondary graduates who possess adequate occupation-specific technical skills but lack strong foundational and transversal skills, often face challenges in adapting to work-related changes.
Quality. Many young people attend schools without acquiring basic literacy skills, leaving them unable to compete in the job market. More than 80 percent of the entire working age population in Ghana and more than 60 percent in Kenya cannot infer simple information from relatively easy texts. For those who access technical and vocational training at secondary and post-secondary levels, returns can vary substantially by specialization and institution. In particular, technical and vocational training (TVET) systems in many countries face challenges related to quality assurance, resulting in perceptions of the vocational track being a second-best option compared to general secondary or tertiary education.
Relevance. Technical and vocational education and training ��which can last anywhere from six months to three years�� can give young people, especially women, the skills to compete for better paying jobs. Nevertheless, more needs to be done in terms of engaging local employers to ensure that the curriculum and delivery of these programs responds to labor market needs.
Efficiency. Challenges related to governance, financing, and quality assurance also impact the efficiency of skills development programs. The resulting unnecessarily high costs can limit opportunities for disadvantaged youth and adults to access these programs. The good news is that the evidence on what works and what does not in skills development, and for whom, is growing. At the World Bank Group (WBG), we support governments around the world in collecting data and designing, implementing, and learning from reforms and programs aimed at addressing the most fundamental challenges of skills development.

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Last Updated: Feb 20, 2024

ľ��ӰԺ (WB) is working with countries and multilateral development partners to ensure that individuals have access to quality education and training opportunities, while also supporting employers to locate the skills they need. It provides financial and analytical assistance to governments in a wide range of areas, from system and institutional development to more focused training programs. The WB is also engaged in program and policy research and analysis to improve skills interventions and measurement.

At present, the World Bank is developing a set of global public goods:

ActiVaR: the WB supports country teams in designing, implementing, and evaluating training using XR technologies for skills and workforce development. With support from the Government of Korea, with a grant from the Korea World Bank Partnership Facility, the WB launched the in Ecuador. ActiVaR is developing an XR training program to train young fishermen in the Caribbean to develop their blue economy productively and sustainably with top-of-the-art fishing and navigation technology. ActiVaR also promotes using to create more engaging hybrid learning experiences in the metaverse. The ActiVaR program has the potential to scale up globally. See more in Results.
Digital Skills for Africa (DS4A): Set of tools to assess the demand and supply for digital skills, with a focus on Agrotech, post-secondary students, teachers, and healthcare workers. To assess the supply of digital skills, tools include not only assessments on digital skills, but also assessments on literacy and numeracy, and socio-emotional skills. On the other hand, the team is developing a set of data collection tools to assess the demand of digital skills in different sub-sectors of the economy, notably wage employment, small firms and informal workers, and agricultural workers.
ETRI-VET: Adaptation of the EdTech Readiness Index �Ca WB tool that collects and reports information on institutions�� and systems�� readiness to use Edtech and conduct Hybrid for instruction�C to assess the readiness of formal TVET and higher education institutions to skills and reskill youth in a time of digital transformation.
TEACH-VET: Class observation instruments and pedagogical support for VET systems. These tools are intended to be used for formal TVET institutions and designed to help countries collect data on teaching and training practices to improve the quality of TVET systems.

To better understand skills development challenges and prioritize solutions, the WB also developed other effective tools:

The : it is a simple conceptual framework to help policymakers, analysts, and researchers think through the lifecycle approach to skills development (cognitive, socioemotional, and job-relevant skills) and to design programs that enhance productivity and promote economic growth. The program uses household-based and employer-based surveys to facilitate collection of policy-relevant data to enable a better understanding of skill requirements in the labor market.
The Systems Approach for Better Education Results (SABER) Workforce Development program helps countries strengthen their workforce development systems. The SABER Workforce Development (WfD) Policy Intent tool serves to benchmark country��s policies and institutions that affect the supply of and demand for skills, focusing on three functional dimensions: (a) strategy; (b) system oversight; and (c) service delivery.
The (TAP) is a survey tool that builds upon the SABER-WfD conceptual framework to assess and compare the readiness of training systems and institutions to prepare workers to find meaningful and relevant employment.

Last Updated: Feb 20, 2024

Recognizing the importance of skills in the global economy, the World Bank (WB) supports skills development through financing, policy advice, technical support, and partnership activities at the country, regional, and global levels. ľ��ӰԺ is the most significant external financier of tertiary education and skills, with a close to $7 billion active lending portfolio invested in over 50 developing countries.

Some recent results include the following:

Virtual and XR Laboratories: With support from the Government of Korea, with a grant from the Korea World Bank Partnership Facility, the WB launched the in Ecuador to support country teams in designing, implementing, and evaluating training using XR technologies for skills and workforce development. ActiVaR has helped six technical universities in Latin America develop virtual laboratories for workforce development, benefiting over 600 students annually. ActiVaR supported the creation of two new immersive training programs in and . ActiVaR is developing an XR training program to train young fishermen in the Caribbean to develop their blue economy productively and sustainably with top-of-the-art fishing and navigation technology. ActiVaR also promotes using to create more engaging hybrid learning experiences in the metaverse. The ActiVaR program has the potential to scale up globally. of the ActiVaR program indicate that by fostering student engagement and motivation and reducing . Moreover, the team has recently published a to inform decision-makers of the potential of using virtual and XR laboratories to enhance the learning experience of students participating in workforce development program.
Studies and activities on digital skills: As part of the Digital Economy for Africa (DE4A) Initiative, the WB has developed a set of resources to support the . Publications include two methodological guidebooks to help countries in Africa prepare a Digital Skills Country Action Plan for higher education and technical vocational education (TVET). Other initiatives include the study on ��, from the International Finance Corporation (IFC).

In 2016-2020, the WB committed around 2 billion dollars to support this agenda. Some examples include:

STEP Skills Measurement Program: The WBG has supported implementation of household- and employer skills surveys in 17 countries, including , , , Bosnia and Herzegovina, , , , Kenya, , , Macedonia, , Serbia, , , and the .
SABER-Workforce Development (WfD) tools: Policy Intent tool has been implemented in more than 25 countries around the world. The has been implemented in Albania, Kenya, and , and is currently being implemented in several countries in and Europe and Central Asia.
Dominican Republic: In the Dominican Republic, the WBG and the Inter-American Development Bank successfully implemented a Youth Training and Employment Program that provided vocational and life skills training and on-the-job internships to poor, at-risk youth. An impact evaluation of the program showed that graduates, particularly women, were more likely to have a formal job and earn a higher income. Teenage pregnancy rates were also lower among participants. More than 38,000 at-risk youth, half of them women, benefited from the program, which was awarded Best Practices in Youth Policies and Programs in Latin America and the Caribbean by the WBG and the United Nations Development Program.
Kenya: In Kenya, where youth unemployment is high, the is helping an estimated 280,000 young Kenyans develop in-demand skills and expand their opportunities. The project includes results-based contracts conditional on youth placement in internship and then employment, to encourage engagement of training providers with private sector employers. The project also supports self-employment by financing and training micro-enterprises as well as young firms with high growth potential, improves access to labor market information, and strengthens youth policy development.
Afghanistan: The WB supported Afghanistan��s TVET Authority in the development of an Alternative Learning Plan to ensure its 60,000 students can stay connected to the TVET system during the COVID-19 pandemic. The plan, supported under the , adapted many of the global good practices to the Afghan context �C emphasizing simplicity for quick roll out, localized solutions to account for realities on the ground, and provision through multiple modalities to reach and meet the needs of heterogeneous, hard-to-reach student groups.
Bangladesh: The $190 million for Bangladesh supported selected public and private training institutions to improve training quality and employability of more than 700,000 trainees, with special considerations for learners from disadvantaged socioeconomic backgrounds. Importantly, the project achieved almost universal program completion, doubling it from the initial 50%, boosted female enrollment from 5% to 32%, and raised the pass rates of disadvantaged students for project-sponsored diploma programs from 55% to 92.5%.
Liberia: The helps empower poor and vulnerable youth to improve their income-generating potential. Over 10,000 youth, half of whom are women, have so far received training in entrepreneurship and life skills (such as socioemotional skills, health and hygiene, and money management), improved agriculture techniques, as well as labor subsidies to engage in communal farming. The beneficiaries are mostly located in hard-to-reach rural parts of the country. This support has allowed these youth to have productive employment, engage in other income-generating activities, and contribute to the development of their communities.
East Africa: The $293 million project aims to increase the access and improve the quality of TVET programs in selected Regional Flagship TVET Institutes in Kenya, Tanzania, and Ethiopia, and to support regional integration in East Africa. Overall, the project aims to benefit close to 60,000 students, with female students making up at least 30 percent of the enrollment. More than 300 staff will benefit from industrial attachment programs and over 200 staff will benefit from foreign exchange program.

Last Updated: Feb 20, 2024

Tertiary Education and Skills (TES) Multi-Donor Trust Fund. The TES Trust Fund aims to prepare youth and adults for the future of work and society by improving access to relevant, quality, equitable, and resilient education, and training. The TES program seeks to reframe, reform, and rebuild tertiary education and skills to prepare the workforce for the digital and green transformation and transition.

The TES program draws on the proven in-country experience, evidence, and knowledge of World Bank Formal Technical and Vocational Education and Training (TVET), Youth and Adult Learning, and Higher Education to identify, innovate, and mitigate global skills and learning crises. TES program activities fall under two components: global public goods to develop analytical and diagnostics tools that help address gaps and reform opportunities of TES-related systems and institutions (World Bank-executed); and targeted country support to design, implement, and evaluate TES-related policies and programs (World Bank- or Recipient-executed). The activities financed will be guided by five cross-cutting themes (TES Themes): (1) Advancing 21st Century Skills and Employability; (2) Promoting Research, Innovation, and Adaptation; (3) Prioritizing Equity and Inclusion; (4) Ensuring Strong Institutions; and (5) Leveraging Transformative Technologies (EdTech).

to prepare youth and adults for the future of work and society.

The WB continues to foster global partnerships to improve skills development around the world. Some recent examples include:

During the COVID-19 pandemic, the World Bank partnered with the (ILO) and on understanding the responses of TVET providers, policymakers, and social partners as well as enterprises and sharing lessons learned. Building on this effort, the three organizations are currently engaged in an inter-agency initiative to gather evidence on how to build better TVET systems.

ľ��ӰԺ also engages with the organization, which works to raise the profile and recognition of skilled people, and show how important skills are in achieving economic growth and personal success.

Given the importance of measuring knowledge and skills, the World Bank is partnering with , and , , and to explore how learning can be measured through the lifecycle by integrating short modules into multi-topic household surveys. This is also building on the history of collaboration between the World Bank and OECD on aligning the literacy measures of the to those of OECD .

is a multi-stakeholder global program housed in the Jobs Group of the Social Protection and Jobs Global Practice of the World Bank. It focuses on curating and learning from new innovations and ��solutions�� in the design of youth employment programs, with a focus on technology, gender and private sector. S4YE��s partner network includes over 40 private companies (S4YE Private Sector Advisory Council), a network of 44 high-potential and innovative youth employment projects (S4YE Impact Portfolio), a group of 17 talented and enterprising global youth (S4YE Youth Advisory Group) that provide youth voice on the design of youth employment programs of S4YE and the World Bank; and a network of 150 World Bank youth employment projects in 69 countries, led by different Global Practices.

Last Updated: Feb 20, 2024

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