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NEWS UPDATES Asean Affairs     14 October  2011                       

Skills gap in Philippines labor force

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The World Bank on Thursday cited skills gaps as serious bottlenecks for innovation and productivity among Filipino companies.

In a report titled, “Putting Higher Education to Work: Skills and Research for Growth in East Asia,” the Washington-based lender said skills gaps in the Philippines are particularly large in the service industry, export sector, and technologically intensive sector. The report said employers and employees find these gaps to be particularly severe in creativity, leadership, and problem solving skills.

“Many firms face the challenge of hiring higher education graduates who simply do not have the right skills, and these skills mismatches have been widening between firms and employees at all employment levels,” the report said. Given this, the report highlighted the importance of shifting investments towards building the country’s research capacity, particularly in higher education institutions.

“Quality research enables universities to produce ideas for the business community and contribute to technology upgrading in firms, generating knowledge and technological innovation,” Emanuela di Gropello, World Bank lead economist and lead author of the report said. “Low spending in research and development, low number of licenses, and low number of patents all indicate a low capacity for research and innovation,” di Gropello said.

For the Philippines to grow faster and achieve continued technological deepening, the government should address skill gaps by maintaining coverage and improving the quality of higher education graduates, and increasing research relevant to economic needs in a few universities or departments.

The government should also increase education spending in relation to gross domestic product, improve the use and allocation of public resources and complete the process of granting autonomy to universities while strengthening the role and functions of university boards.

The report added that the Philippines—along with other low- and middle-income countries in the East Asia and the Pacific Region—has started climbing the technology ladder and assimilated important technologies by becoming more open, developing infrastructure and improving its manufacturing industry.

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