Skills gaps are one of the leading social and economic issues of our time. In Latin America and the Caribbean (LAC), more than in any other emerging region, companies are not seeing their skills needs being met. According to the World Bank Enterprise Surveys, 36% of firms say they struggle to find an adequately qualified work force, a percentage higher than in any other region in the world, compared to a global average of 21% and an OECD average of 15%.
Addressing the human capital and skills gaps has very high development returns because human capital and skills are a vector connecting five of the key interrelated challenges facing the region: sluggish productivity growth, low innovation rates, inequality, informality and social exclusion.
The skills challenges in LAC should not be considered in isolation, but against the background of the new global geographies of talent. The expansion of highly educated, highly competent workforces in a number of emerging countries, including but not limited to China and India, means LAC is competing not just with low-skilled, low wage-labour, but with highly-skilled talent pools in the rest of the world. The reason this is crucially important is that skills-intensive industries grow faster in countries with a more skilled workforce. In a very real sense there is a global race for education and training to capture investment flows and accelerate technological progress.