On Aid Part 4: Skills that Matter in a Globalized World

From Trump to Brexit, the world seems an immensely terrifying place to exist these days, particularly if the values espoused by Trump and Brexit and their followers seem out of touch with the reality in which we live. This neoliberal, more or less realist, globalized, digitized world of competition and the constant need for the skills to adapt and thrive.

But that’s our reality.

For the Trumpeteers and Brexiters and those that share similar outlooks, there world IS a terrifying place to exist. The world has changed so much in 30 years, and changes so rapidly almost on a daily basis, that they don’t know where they fit. They are, in reality, on the outside looking in on our digitized bubble (and I say bubble because even if people get it, it’s still a struggle and a challenge to adapt. I mean, I have been lobbying for years to get my parents to switch to a smartphone, but you know, why would they need that? And yet, how come they don’t receive the same photos and updates as my siblings from me?). And, although difficult to admit, people like my parents are not an exception – in many countries, they are the majority. (Read this excellent article by Jeffrey Sachs for more insight)

Why? Well, when the world became ‘global’ and then began to rapidly digitize, many people didn’t have the skills to adapt. My mother admitted to retiring from her job because she struggled to adapt to a computerized environment. I’m certain she is not the only one. In fact, Stephen Roach does an excellent job explaining the impacts of hyper-globalization here, while Jorge G. Castañeda gives a very good overview of the adverse impacts of globalization and the rise of Brexit and Trump:

“The main problem in the US has been the type of jobs that filled the gap after manufacturing jobs migrated elsewhere. This was missed by policymakers concerned with macroeconomic outcomes. But it was not missed by people in their fifties or sixties who lost a $30-per-hour job with health care and retirement benefits, and had to settle for employment at half the previous wage and few, if any, benefits.

Policymakers didn’t care about the victims of globalization, because they didn’t believe they had to care. The market would sort everything out on its own. It didn’t. But that hasn’t taught policymakers a lesson.”

There was a very interesting article by Dani Rodik (“The Abidication of the Left”) in which he states “globalization accentuates class divisions between those who have the skills and resources to take advantage of global markets and those who don’t.” It really doesn’t get more cut and dry than that. The rise of Trump and the Brexit movement, along with the increasing trend in protectionist and nationalist policies the world over, is in large part because globalization started out as something that would be great for economic growth, but quickly developed a life of it’s own and was beyond the control of individual governments. Rather than work to improve services and programmes to ensure citizens can adapt to globalization, those that understand what globalization is in its current form have resorted to saying ‘trust us’.

Because there has been a lot of talk of ‘trust us’ and not a lot of critical action, it’s no wonder the phrase ‘people are tired of experts’ gained traction. The way I see it, governments are still operating on the original theory underpinning globalization, that ‘countries that engage in free trade will find new channels for growth in the long run, and workers who lose their jobs in one industry will find employment in another.’ And yet, that has obviously proved to be incorrect, because, as pointed out by Martin Baily and James Manyika, ‘the process [of globalization] is messy and protracted. Workers in a shrinking industry may need entirely new skills to find jobs in other sectors, and they may have to pack up their families and pull up deep roots to pursue these opportunities.’ There are few people who really want to do that, and who are scared to do that. So they are left behind.

Which brings me to the main point of my article: if the impacts of globalization have so dramatically impacted large swaths of the population in ‘developed’ countries because education and training policies have failed to keep pace with a digitized global economy, what are we learning in the development community?

Have development theories around local economic development and skill building tried to adapt to the automated and digitized world? I am doubtful. We still see so many programmes on ‘skill building’ in developing countries that focus on home-based industries: sewing, handicrafts and small-scale catering. Although sectors like agriculture are adapting, if only because climate change is forcing it to, other industries continue to develop as though we all live in a 1980s economy. Education policies aren’t keeping pace and therefore necessary skill sets in relation to the type of jobs the present day economy needs are not being developed.

It means that the development community is failing least developed and developing countries in terms of preparing not for the future but for the here and now. We, as development practitioners, are not explaining what globalization really is, why traditional skill sets and economic activities have little chance of forging a path out of poverty, and leading youth to opportunities in which they can adapt and flourish in a global and digital economy.

As noted by the OECD, “in countries where large shares of adults have poor skills, it is difficult to introduce productivity-enhancing technologies and new ways of working, which stalls improvements in living standards.” Thus, if development organizations aren’t providing the skill sets that matter for today’s global economy, just what are we doing? It’s a challenge and perhaps one we feel daunted by.

I’ve written previously that the process of engaging the private sector in development – traditional development activities like government capacity building and budget support – will be challenging and an uphill battle. However, when it comes to economic development and skill-building, this is an excellent entry point for the private sector.

First, the private sector can tell us what types of skills are needed – not just university graduate skills, but the day-to-day skills needed to lift a local economy into a position where it can capitalize from globalization. This type of advice can translate into effective and proactive government policies and programmes for implementation at both national and local levels. These policies need to be developed or adapted across many sectors: education, technology, communications and business development, just to name a few.

Second, the private sector can be engaged to actually help build the skills that are needed – including adult-education programmes or in-school tuition. Private sector expertise and practical experience in the day-to-day application of new technologies and how they can work to build business at the local level (and, importantly, in rural areas) can make something overwhelming meaningful in the day-to-day. How to use social media to link local handicraft markets to international buyers, or using improved communications technology to bring help-desk style employment services to rural areas. It’s not groundbreaking, but it demonstrates how to adapt traditional economies to the global marketplace.

When it comes to ensuring that we are ‘leaving no one behind’ we have to remind ourselves that we need to learn lessons from developed countries alongside those that we learn through our programmes in developing countries. What worked in 1985 may still work now, but is it really what is needed in 2016?

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