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Disconnect between youth and industry

We have missed the industry-for- jobs train, trying it now would leave us missing the industry-for- productivity train as well

Disconnect between youth and industry

How to channelise the promise that the youth offer? Planning for youth in Pakistan mostly remains limited to providing a situation analysis in response to the question raised above.

We know that Pakistan is a country with 64 percent of its population below 30 years of age. 15 to 29 year-olds, form 29 percent of its population. So channelising the promise the youth offer can greatly contribute to the progress of Pakistan. Do we have a strategy for that? Unemployed youth can also be a serious problem for a county if they are ignored by the policymakers.

Having a young population has two sides: the supply side and the demand side. Each of the aspects has the quantity side and quality side. The debate in Pakistan on youth has been mainly limited to the supply side. It has also focused exclusively on the quantity aspect, ignoring the perspective of quality.

At present, the discussion on youth seems also limited to getting them employed at any cost. It is all about producing jobs. But let’s not forget that youth needs jobs according to their qualification, not just any job. Some jobs require technical skills, the skills that demand intermediate education along with technical training. Harnessing the potential of youth for economic growth, therefore, must be based on productive jobs. This needs an assessment of the factors limiting the youth’s potential.

What has led to the present situation? Five key issues can be highlighted. First, low social mobility in Pakistan led to a disconnect between education and market opportunities. Opportunities of education and employment, whatever available, were clustered around socio-economic status of the family. For instance, my income depends largely on the income of my father, my family.

Studies show that a child born to rich parents is likely to earn 48 percent more as compared to the son having similar capacities but born to poor parents. This has left a majority of the youth coming from the poor segment of society unable to access quality education and acquire skills necessary to land quality jobs.

Economic growth in Pakistan can be characterised as consumption-led. Roughly, 94.8 percent of economic growth in FY 2018-19 came from consumption. Growth-led by consumption, by its very nature, is job-inelastic. It produces fewer jobs. Two, almost 60 percent of the GDP is coming from the services sector. The share of industry is around 19 percent. In India, the share of industry is about 30 percent. This has led to low demand for skills.

Pakistan moved from an agricultural economy to the services economy without consolidating the industrial sector. As a result, unemployment for the population with middle and higher skills increased. Also the youth were left with only the option to be employed in low-productivity elementary occupations. Services sector demands higher skills but the demand is very limited.

Discussion on youth seems limited to getting them employed at any cost. It is all about producing jobs. But let’s not forget that the youth need jobs according to their qualification, not just any job. Some jobs require technical skills, the skills that demand intermediate education along with technical training.

Pakistan has always had a sharp-faced faced bifurcation between skill development and education sector. Resultantly, Pakistan has two distinct groups of young people: those who have education but no technical skills and those who have skills but no education. The former are unemployable and the later have the option only to accept unproductive jobs. One’s chances of unemployment in Pakistan increased as the education level improved.

While the skill development sector is focused on providing elementary skills, the education system continues to produce job-seekers. Totally isolated from skills development sector, the education system continues producing unemployables. It has failed to foster an environment of innovation, research and development.

Employment in elementary occupations has become the last resort for the unemployed.

Informal employment, characterised by poor working conditions, low earnings and little or no social protection, has flourished. Growth in informal employment has been ten times the formal employment. The number of low-skill workers has grown.

It is in this context that the debate on harnessing the potential of youth needs to change its focus from elementary jobs to middle skills jobs, from number of jobs to quality jobs, and from employability to productivity. What can be done to increase the input of youth in the economy? There can be many answers. But a comprehensive youth policy is the first step.

Pakistan needs to maintain a sustained high level of economic growth. Much of the unemployment and other issues in Pakistan come down to the low growth trajectory. Pakistan must realise that while industrialisation can create jobs, it is now time for industrialisation for productivity. It is the world of industrialisation 4.0 coming up. It’s about productivity, not quantity of jobs. We have missed the industry-for-jobs train, trying it now would leave us missing the industry-for-productivity train as well. Focus on industry for productivity, focus on entrepreneurship for jobs.

Pakistan must revisit curricula. It must improve quality of education in the public as well as private sector. The education system needs to produce entrepreneurs. It needs to produce innovators, people who create jobs. A balanced mix of producing entrepreneurship and employment is essential. This will multiply the productivity and production of quality jobs. More focus is required for science and technical education at tertiary level. In 2016, out of 100 children eligible for enrollment in tertiary education, only 9.73 percent enrolled. An overwhelming majority enrolled in humanities.

Technical Education and Vocational Training Authority (TEVTA) in the Punjab and other skills-imparting institutions need to focus on middle skills. We need to focus on skills for productivity, skills for competitiveness rather than skills for employability.We need a coherent youth employment policy — a policy compatible with economic, and social policies.

It should be well integrated with the industrial policy and with employment policy. For effective planning, the country needs to have a labour market information system. This should enable the government to monitor demand and supply of skills.

The quality of vocational training programmes in the public sector must be improved by raising the standards at TEVTA. A new model of federal and provincial partnership is needed in order to rationalise the structure and systems at the TEVTA. Required skills must also be imparted through the private sector so that Pakistan becomes competitive globally.

We need to shift to an investment-based economy and continue expanding manufacturing capabilities, investing in high-impact sectors, such as hospitality and information technology, and building up the infrastructure. Presently, the share of manufacturing in the GDP is 12.8 percent which is nearly the same as 1960s’ 12.6 percent. At the same time, policies must be designed to educate the rural youth. Only this can help effectively using the youth for economic growth.

 

The writer is Research Fellow and heads Policy Solutions Lab at Sustainable Development Policy Institute (SDPI)

Dr Sajid Amin

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