Definitions
1. This research paper is based upon the two reports from a research project undertaken by The Staff College (since April 1995 part of the Further Education Development Agency) for the Overseas Development Administration (ODA) in 1994-95. The project examined ways in which labour market signals and indicators are being and might be used to identify needs which might be met through national vocational and technical education and training (TVET) systems.
2. A central economic development problem throughout the world is that of improving the linkages between training providers and their clients in business and industry. Economic development demands that the labour market is supplied with new skills as the economy grows and industry is re-structured. This places demands on the public and private sector organisations responsible for skill development. Cost-effective technical/vocational education and training requires both understanding of and involvement with local business and industry. There is now considerable dissatisfaction with the payback on the enormous investment in the development of technical and vocational education and training systems over the past two decades. At the heart of the criticisms is the inability of enterprises to invest in training and of training providers to make significant tangible contributions to economic progress. The lack of responsiveness to industrial and commercial needs is a major characteristic of these complaints. Throughout the world, in both industrialised and developing countries, the complaint is heard that training providers do not deliver the skills required by business and industry.
3. The central thesis addressed in this paper is that established, highly quantitative approaches to the collection of LMI for manpower planning purposes have failed to provide the evidence by which TVET systems might be made more responsive to the needs of the labour markets and the local, regional and national economies within which they operate. An earlier report to the ODA, focusing on cost reduction in technical and vocational education (Gray et al 1993), recommended that attention be paid to simple, locally applied approaches using labour market signals and indicators as a basis for steering TVET reform. This drew upon the volte face by the Population and Human Resources Department at the World Bank in the early 1990s, when in a highly influential policy paper (World Bank, 1991) it rejected the manpower planning approaches it had been advocating for three decades as a pre-requirement for aid programmes, and supported the use of labour market signals and indicators (see Middleton, Ziderman & Van Adams, 1993).
4. The research project tested three aspects of that change:
- are labour market signals and indicators now being used in place of traditional manpower planning approaches;- are there infrastructures in place to collect and make use of such signals and indicators; and
- how might developing countries make more effective uses of such indicators in planning and reforming TVET systems?
5. This paper tries to recognise both the complexity of labour market information and the multiple purposes to which it can be applied. TVET is only such purpose, although the prime focus of this research. Within TVET there are many potential users with very different needs. Civil servants, college managers, employers, professionals within donor agencies and NGOs, as well as students, trainees and unemployed workers all require labour market information for different purposes. The extent to which such data is both available and useful varies considerably from country to country. This paper attempts to recognise these multiple users and uses, and to extend its analysis to the commonly neglected informal sector of the economy. In doing so it focuses on some common issues found in four countries with far more differences than commonalities, in terms of their greatly contrasted cultures, sizes, geographical locations and stages of economic development.
6. The paper comprises an initial literature review (Chapter 2), followed by a review of the methodology employed in four national case studies (Chapter 3) and those case studies (Chapter 4). A summary of their key findings in (Chapter 5) is followed by some key lessons from the research (Chapter 6), and some conclusions on ways in which labour market signals and indicators might be used more effectively to improve the effectiveness of technical and vocational education and training systems. Appendices provide an overview of recent developments in the United Kingdom (using the Training & Enterprise
Councils as vehicles for economic regeneration linking training providers and the employment market), as well as details of the research approaches.
7. There is little precision in the terminology employed in the literature on labour market analysis and manpower planning. Current thinking demonises 'manpower planning', when it is only long-term manpower needs forecasting in over-ambitious detail (specifying the numbers of plumbers or architects needed ten years hence) which has been demonstrated as unworkable. Paradoxically, it is often the lack of detail, as for example in the knowledge and skill components of particular occupations such as plumbing and architecture, which makes these long-term forecasts unusable. Planning per se is not the problem, but is the logical purpose of and outcome from the processes of data collection and analysis.
8. The project team felt it would be useful to attempt some definitions of the key terms as they are used throughout this report, which demonstrate these distinctions.
Labour market signals: discrete pieces of raw evidence, whether quantitative or qualitative.Labour market indicators: several signals, which, when processed together, imply a trend or direction.
Labour market intelligence: 'soft' data, derived from word of mouth, the media, etc. Contrasted with both statistical data and research-based evidence.
Labour market information (LMI): the total package of labour market signals, indicators and intelligence.
Labour market information system (LMIS): labour market information concerning all levels of manpower inclusive of unskilled and crafts people, technical and professional staff and managers, organised for a specific purpose. Its components are defined more fully in Chapter 6 below.
Labour market analysis: the processes whereby labour market information is reviewed, manipulated and related to other sources of information in order to identify trends, directions and needs.
Manpower planning: the planning activities which use the findings of labour market analysis and other sources in order to determine policies for industrial location and change; training and educational provision; determining labour force skill and qualification needs; and the management of labour recruitment and reductions, migration, working conditions and wages levels.
