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Human Capital and the National
       Innovation Strategy for
              Competitiveness
                             The case of Chile


                                   Hernán Araneda
      Head, Centre for Innovation in Human Capital
                                    Fundación Chile


                        Santiago, April 26th, 2010
About Fundación Chile


    Who we are:
    Fundación Chile is a non-profit, privately owned
    corporation, created in 1976 by an agreement between
    the Chilean Government and ITT Corporation (U.S.A.).In
    2005 BHP Billiton became a co founder.




    Our Mission:
    To increase the competitivity of human resources and
    productive sectors and services, by promoting and
    developing high impact innovations, technology transfer
    and management for the country.
“There are three proven models worldwide that are
examples for emerging economies: The
industrialization model of China, The outsourcing
model of India and the model of Fundación Chile”
(OECD)

“…by 1982, Fundación Chile had its first salmon farm
up and running. Seven years later it sold it to a
Japanese company for $22 million” (Businessweek)


“In 2004, its first year, the laboratory turned out 1.7m
partially fattened lilly bulbs, using up-to-date
biotechnology. Vitro Centre is a joint venture between
local investors, Fundación Chile and a Dutch firm… (The
Economist)
Strong Brand Name Recognition
Chile’s background
16 million people, native language spanish
Upper Middle income country, per capita GDP US$ 12.000
(purchasing power parity)
Average GDP Growth 1990-2005: 5,5 %
Global Competitive Index 2007: 26
Significant progress in poverty reduction: 44% to 18%
(1986-2006).
Unemployment rate: 7.3 (best in 8 years)
High coverage in primary and secondary education
Participation in Tertiary Education has tripled in the last
15 years.
Chile is performing fine in several
                    rankings…

                  GDP : Annual Growth                                POVERTY                 1987       2006
                     Rates Selected                                  % of population          44%        18%
                   Countries: average                                                  Source: ECLAC
                       1990-2005
        China                                                        9.0
    Singapore                                                  6.1
  South Korea                                                  5.9
         Chile                                           5.5
    Indonesia                                      4.5                       Corruption Perception
       Mexico                                3.1                                     Index Ranking
       Poland                          2.6
        OECD                          2.5
                                                                            Among Latin                1st
    Argentina                         2.4
         Brazil                 2.0                                         American
     Hungary              1.3                                               Countries
                                                                            Overall                    20th
Czech Republic      0.6
                                                                            Ranking Among
                                                                            146 Countries
                                                                              Source: Transparency International
                                                                              (www.transparency.org), 2005
But…
Percapita income still lacks behind the OECD (40% of
OECD average income level)
Unequal income distribution (0.55 Gini; 0.75 excluding
the highest income decile)
Economy too dependent on commodities: more R&D
investment required
Relatively low labour productivity
Low quality of learning outcomes across the education
system (Simce, TIMMS, PISA, IALS)
Uneven distribution of opportunities in higher education
and training
Low participation of women in the labour force
The country’s most important goal:
 doubling percapita income in the next 15
  years to become a developed country

                               IMF: per capita GDP
                               (US dollars, Sept. 2006)

                                                            USA (43,236)
                                                          Canada (35,779)
                                                              Hong Kong
                                                                 (35,396)
                                    Singapore
                                      (29,743)
                               Taiwan (29,244)
                                Spain (27,542)
                                                           Finland (32,822)
                                   N. Zealand
                                                          Australia (32,127)
                                      (25,655)
                                                                UK (31,585)
                                                          Sweden (31,264)
                                                           France (30,150)
           Estonia (17,802)
CHILE    Lithuania (15,443)
                  Argentina
                                      Slovenia
                                      (23,159)
                    (14,838)    Korea (21,887)
             Latvia (13,875)
                                                 … and this is a major
         Malaysia (11,915)
                                                 challenge. Only once in our
                                                 history have we managed to
                                                 double our per capita GDP in
                                                 16 years: 1988-2004.
Business as usual is not sufficient; We must decisively
      move towards a Knowledge Based Economy


Growth depends less on capital and labour
accumulation than on efficient use of these factors
(Total Factor Productivity).

We need to move from static comparative advantages
linked to natural resources to a stage where the
incorporation of more knowledge into products and
services is crucial.

In brief - the capacity to transform knowledge into
wealth, the capacity to INNOVATE.
Are we prepared?
        Over the last decade TFP contribution has fallen
        dramatically…and forecasts are frightening.
        TFP would account for less than 25% of Chile’s growth
        in the 2007-2011 which compares poorly with the figure
        for competing economies (40% to 50% according to The
        Economist Intelligence Unit)    TFP contribution to growth 2007-2011




            Growth     TFP     Capital   Labour
1984-         7.1      2.8      2.1       2.2
1997
1998-         3.6      0.9      2.4       0.4
2005
                                                                                                   Selected
                                                                   CHILE
                                                                                                  countries*
                                                  * Bálticos, Europa del Este y países de rápido crecimiento de Asia.
Three decisions to move forward
              Innovation

1. Increasing public funding to support the strategy
   (new mining tax).

2. R & D tax incentive for companies.

3. Creation of a National Innovation Council for
   Competitiveness – National Innovation Strategy
      To propose a roadmap for a development process based on
      competitiveness supported by human capital and knowledge.
      To look after policy coherence
      Defining strategic objectives
      Defining the roles of agents
      Resource allocation aligned with the strategic priorities
INNOVATION STRATEGY
HUMAN                BUSINESS              R&D
CAPITAL              INNOVATION            strategycally
                     (value creation)      oriented


EFFICIENT INSTITUTIONALITY                                 COMPETITIVENESS
(long term vision, “accountability”, regionally focused)

SELECTIVITY
Focus on economic clusters
Selectivity: focus on clusters
                                                                                     Serv.medio                     Outsourcing
                        0.17                                                           ambiente
                        0.16
                                      Crecimiento PIB en 10 a ños                                                   Industrias
                        0.15                                                                                         creativas

                       0.14                      1 billón de pesos
                    Alto                                                                Alimentos                                    Acuicultura
                       0.13                     Sectores que se
                                                                                    procesados de
                                                                                 consumo humano                       Servicios
                        0.12                    destacan                                                             financieros

                        0.11                                                                      Vitivinicultura                                        Fruticultura
crecimiento (%)




                                                                                                                                Plástico                   primaria
  Potencial de




                        0.10                                                                                        Comunicaciones
                                                       Horticultura             Plataforma de negocios para LA
                        0.09
                                                        primaria                                                                               Porcicultura y avicultura
                                                                                                    Educaci ón superior
                      0.08                                                               Medicina                                                   Minería no met álica
                  Medio                                             Farmac éutica    especializada          Logística y
                                                                                                                                                        Construcci ón
                      0.07                                                  Consultor ía
                                                                                                             transporte
                                                                                                 Bovino Alimentos proc. para
                        0.06                                                                     y ovino                                                      Comercio minorista
                                                                                                               consumo animal

                        0.05                                                                                 Industria      Lácteo                                Miner ía del
                                                                                                              química                                             cobre y
                        0.04                                                                                              Productos Turismo 1                     subproductos
                                                                                                                          de madera                Silvicultura
                      0.03                                                                                                                Celulosa
                   Bajo                                                                                                                    y papel
                      0.02                            Metalurgia
                        0.01
                        0.00
                                Alto                                                         Medio                                                              Bajo
                               1.3 1.5         1.7     1.9     2.1     2.3     2.5     2.7    2.9 3.1          3.3       3.5       3.7   3.9       4.1    4.3    4.5
                                                                              Esfuerzo para lograr la
                                                                             competitividad necesaria

          (1)     Dentro del sector de Turismo fue considerado el   subsector de Turismo de Intereses Especiales, que tiene un dinamismo much       o mayor que el sector de Turismo
                  tradicional
Consolidate a business system aimed at the
               creation of value by means of innovation – in all its
BUSINESS       forms and aspects – as a competitiveness strategy
INNOVATION
               in global markets.


               Strengthen a platform for the creation,
               dissemination and application of knowledge
               in a permanent and consistent research
Science with
strategic      effort coherent with the country’s
orientation    productive and social problems.


               To establish an accessible and top-quality
               life-long-learning system which allows the
Human          country to rely on the relevant human
Capital        capital the Knowledge Economy requires
Nz




                        0
                            2
                                4
                                    6
                                        8
                                               10
                                                    12
                                                         14
            ea
              la
                   nd
           Ko
               re
Ch                 a
   ec Fin
     Re lan
       p           d
          Ch
               ec
        Ho a
             lla
                 nd
         Ire
              la
                 n
       Hu d
            ng
               ar
        G y
           re
                                                                                                        Human Capital Stock




               ec
      Ar           e
        ge
             nt
               in
                   a
            Ch
      M          ile
         al
                                        7,89




            ay
               sia
           Sp
                ai
        M n
           ex
                                                              Average years of schooling (ages 25-65)




      Co ic o
          lo
             m
                b
       P o ia
           rtu
               ga
                    l
           Br
               az
                   il
Tertiary education graduates in the
workforce

          Prof. and techn. as a % of the
                current workforce
  50
  40
  30
  20
  10
   0
                d




   Co re a
     ec d




    Hu in




                il
        Ko y




              ile
      I re d




     M ia
   Nz Re p
     Ho d




    M ic o

              ia


            az
   Ch lla n




           lan



            ar
             n
             n




             a




            b


          ys
         Ch
  nla




          la


         Sp




      lom
         ng




         ex




         Br
     ea




     ala
 Fi
Educational attainment
     of the adult population: the stock problem
                     Distribution of the Population aged 25 to 64 years by highest level of education completed, 2003

    100

    90

    80

    70

    60

    50
%




    40

    30

    20

    10

     0
          Thailand    Paraguay   Peru 2002 Brazil 2002 Indonesia    Jordan   Chile 2003 Argentina   Uruguay   Malaysia    Russian    OECD     WEI mean
          2003/04       2002                            2002/03    2002/03                2002       2002      2002      Federation mean 2003  2003
                                                                                                                          2002/03

                         Primary      Lower secondary       Upper secondary       Tertiary (type B) education     Tertiary (tipe A) education


                 Source: Education Trends in Perspective – Analysis of the World Education Indicators. UNESCO-UIS/OECD 2005
Basic competence (prose):
50% of the population in performance level 1

             Adult Functional Literacy Survey (1998)

     100%
      90%
      80%
      70%
      60%                                              PERFORMANCE LEVEL
      50%
      40%
                                                            Level 4/5
      30%
                                                            Level 3
      20%
                                                            Lever 2
      10%
       0%
                                                            Level 1
           y



                               es




                                             ile
                              en




                                            a ry
                                             lic




                                                l
                               m




                                            ga
        an




                           do




                                         ub
                                         Ch
                           tat
                           ed




                                        rt u
                                        ng
        rm




                        ing




                                       ep
                       dS
                        Sw




                                     Po
                                     Hu
      Ge




                                    cR
                   dK
                    ite




                                       e
               Un

                ite



                                    Cz
             Un
% of Enrollment in Higher
             Education

90
80
70
60
50                                                            1991
40                                                            2004
30
20
10
 0
     Chile   S.Korea   Estonia   Ireland   Latvia Lithuania
Primary & Secondary Education: high
                    coverage, low quality of learning outcomes
                    (TIMSS, PISA, SIMCE).
                     PRIMARY EDUCATION COVERAGE BY INCOME QUINTILE, 1990 - 2003

                     95,6 98,5     96,9 99,1      97,7 99,5        97,5 99,5              98,9 99,5
              100
               90
               80
               70
Percentages




               60
               50
               40
               30
               20
               10
                0
                         I            II              III             IV                      V
                                               Income Quintiles

                                                  1990      2003                          SECONDARY EDUCATION COVERAGE BY INCOME QUINTILE, 1990 - 2003

                                                                                                                                                           96,9          98,8
                                                                                    100                                  92,0             94,2                    94,5
                                                                                                      87,7                                          87,1
                                                                                     90
                                                                                                                                   80,8
                                                                                     80                      77,2
                                                                                           73,9
                                                                                     70
                                                                      Percentages




                                                                                     60
                                                                                     50
                                                                                     40
                                                                                     30
                                                                                     20
                                                                                     10
                                                                                      0
                                                                                                  I                 II                 III             IV                V
                                                                                                                                Income Quintiles

                                                                                                                                   1990      2003
Tertiary education enrollment by
         income quintiles
 80,0
 70,0
 60,0
 50,0
 40,0
 30,0
 20,0
 10,0
  -
            1990   1992   1994   1996   1998   2000   2003   2006
      I     4,4    7,9    9,1    8,8    8,7    9,6    14,7   19,8
      II    7,7    9,8    10,2   15,4   13,3   17,7   21,4   25,1
      III   12,4   13,0   17,4   21,5   23,2   31,7   33,1   33,3
      IV    22,0   23,9   32,1   35,2   38,9   43,0   46,9   47,2
      V     40,7   41,2   54,8   60,0   65,4   67,4   73,6   67,1
Participation in training

                                 ADULT PARTICIPATION IN TRAINING
                                       (15 to 60 years people)

               16
                          13,9                                           13,6
               14
               12
  Percentage




               10                                  9,1

                8
                6
                4
                2
                0
                    CASEN Survey 1998       CASEN Survey 2000      CASEN Survey 2003
Most participants in training come from big
               companies…
                   PARTICIPATION RATE IN TRAINING PROGRAMS BY ENTREPRISE SIZE

       45,0
       40,0                                                                     38,6

       35,0
       30,0
                                                                   26,0
       25,0
Rate




       20,0                                     18,3

       15,0
       10,0
                         6,0
        5,0
        0,0
                        1 to 9                 10 to 49          50 to 199   200 or more
                                                    Number of workers



              Source: SENCE and CASEN Survey 2003
LLL drivers and issues (1)
 High coverage in initial education but low quality of
 learning outcomes (TIMMS, PISA, etc.)
 A significant % of adult population without initial
 education lacking basic skills
 Students lacking academic and employability skills for a
 friendly school-to-work transition
 Increasing demand for post-secondary learning
 opportunities: education seen as the vehicle for social
 mobility (high private returns, etc.)
 Expansion of the market of post-secondary ed. and
 training providers (esp. private universities) but no public
 information about graduates labor market outcomes
 Concern about quality and relevance of programs,
 accreditation frameworks still to be piloted
LLL drivers and issues (2)

 Disjointed “systems” providing LLL and training
 opportunities,
 Public effort on training limited to a tax incentive for
 companies; no funding arrangements for individual
 workers.
 Vocational education not well funded by government: poor
 quality and relevance for industry
 A significant amount of (competent) workers without
 formal recognition for their skills
 Lack of a shared vision and agenda among ministeries
 relevant for LLL: education, labour, economic
 development.
LLL drivers and issues (3)

 Adult education, technical-vocational education,
 workforce training and career guidance systems
 seen as missing pieces in the 90’s reforms
 Learning outcomes and not only “inputs” and
 “processes” as the best approach once universal
 coverage is achieved
 Lack of a coherent public policy on vocational
 education (both secondary and postsecondary)
Strategy

 Main purpose: design and piloting new arrangements,
 capacities and funding mechanisms supporting LLL
 Multisectorial: Min of Education; Min Labour & Social
 Affairs; Min of Economic Development; Industry
 Associations; companies
 Combination of remedial actions; learning innovations;
 institutional innovations; ”demostrative projects”
 Diverse clientele:
  adults with low educational attainment (unemployed
  / bad jobs);
  young people attending VE;
  Workforce
A systemic view from
the National Competency System

                                           Labour Market
                                          Intermediation /
                                             Information
                                               Services




                                   Industry            Competency
  HR Management                   Endorsed             Assessment &
  (recruitment, selection,                                                 National
                                 Competency            Certification
   performance appraisal,                                              Training System
 training, sucession plans,       Standards               System
        rewards, etc.)


                              NATIONAL LABOUR COMPETENCY SYSTEM



                                            Technical
                                       Vocational Education
                                           (secondary,
                                         postsecondary)
Where we stand
                                            15 industry specific associations, 150
                                            leading companies
                                                                                 500 occup
                                         MOBILIZE
                                     2.STAKEHOLDERS
                                       Movilizar Actores DEFINE
                                                                                 standards, +
     15 economic                         Claves       OCCUPATIONAL               employability skills
     sectors                                         3.Definir Estándares
                      SELECT AND
                     1.Seleccionar e
                                                    AND EMPLOYABILITY            models (8
                                                          SKILLS
                        IDENTIFY
                    Identificar Sector                  STANDARDS                competencies) +
                       INDUSTRY
                       Productivo                                                entrepreneurship
                                                                                 skills
                                             UPDATE
                                       8. Actualizar Estándares     VALIDATE
                                             STANDARDS
                                            según Necesidades      STANDARDS
                                              AS NEEDED
                                                                    4.WITH
                                                                      Validar
                            PROMOTE                               STAKEHOLDERS
                                                                    Estándares
-Web site competency
                               AND                                 con Actores
standards                 7.Promover y
                           DISSEMINATE       KEEPING               Claves
-New regulation             Difundir       MANTENIENDO LA
                                               THE
                                               VENTAJA
                                           COMPETITIVE
-Media coverage                              COMPETITIVA
                                               EDGE

                                                      ADAPT CURRICULA
                                EVALUATE AND       5.Adaptar Currículum y
                                                      AND TRAINING TO
                              6.Evaluar y Certificar Formación según
                              CERTIFY WORKERS /          STANDARDS          Methodology
                                 Trabajadores
                                  STUDENTS              Estándares          transfer to
   40.000 workers certified                                                 300 VET
   Employability skills for                                                 providers
   7.000 students
A case of best practice in Competency
                  Development: the chilean Mining Sector
                                                         ESTUDIO DE
 CREACIÓN ÁREA                                       IMPACTO ECONÓMICO
 COMPETENCIAS                                         CERTIFICACIÓN DE
   LABORALES                                           COMPETENCIAS EN
FUNDACIÓN CHILE                                            MINERÍA
                                                                                                               PROMULGACIÓN LEY
                                                                                                               DE CERTIFICACIÓN DE
  Gerencia de                                         Depto. Administración
                                                                                                                  COMPETENCIAS
 Capital Humano                                       Universidad de Chile


     1998          1999         2000           2001           2002            2003                                     2008      2009

                                                               GIRA
                  Acuerdo                                                                  EXPERIENCIAS DEMOSTRATIVAS
                                                           TECNOLÓGICA
                                                                                         EN EMPRESAS PRIVADAS Y PÚBLICAS
             Fundación Chile
                                                       España - Inglaterra
              Consejo Minero                                                                        Codelco Chile
                                                           – Francia
                Bid-Fomin                                                                               Enami
                           INTEGRACIÓN                   Consejo Minero                              Collahuasi         LANZAMIENTO CATÁLOGO
                             EMPRESAS                    Fundación Chile                          Barrick – Zaldivar        COMPETENCIAS
                          (Estandarización)                 Collahuasi                             Anglo American         SECTOR MINERO 2009
                                                            Escondida
                               Codelco                       Codelco
                              Collahuasi               Antofagasta Minerals
                              Escondida
                               Barrick

                                                                      INTEGRACIÓN
                                             PILOTO
                                                                     GUBERNAMENTAL
                                           EVALUACIÓN
                                                                         Chilecalifica
                                              1371 Trab.
                                                                           Sence
                                               Codelco
                                              Collahuasi
                                              Escondida
Where do we stand against the LLL
agenda?

 Several pilots and demostrative projects articulating
 supply and demand at a regional level. Impact
 evaluation going on (WB).
 Some of the regulations needed in place or in final
 stage of approval (ie National Competency System)
 Competency “movement” underpinning curriculum
 development in most higher institutions across the
 country. “Modules” and “Competency Based VET
 Programs” being developed.
 National Agenda for Innovation and Competitiveness,
 a new driving force for LLL in the country, as far as it
 supports human capital in strategic economic clusters
Current issues
 Competing policy agendas still a problem: M.Education
 too busy with the unfinished school reform and
 M.Labour with the pension reform and persistent youth
 unemployment
 A new policy for secondary and postsecondary TVET
 Qualifications framework informing pedagogical
 innovation and new learning materials
 Quality framework for QA and accreditation
 Diversifing funding mechanisms for learners beyond
 initial education
 Innovation in education & training.

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Human Capital and the National Innovation Strategy for Competitiveness / The Case of Chile

  • 1. Human Capital and the National Innovation Strategy for Competitiveness The case of Chile Hernán Araneda Head, Centre for Innovation in Human Capital Fundación Chile Santiago, April 26th, 2010
  • 2. About Fundación Chile Who we are: Fundación Chile is a non-profit, privately owned corporation, created in 1976 by an agreement between the Chilean Government and ITT Corporation (U.S.A.).In 2005 BHP Billiton became a co founder. Our Mission: To increase the competitivity of human resources and productive sectors and services, by promoting and developing high impact innovations, technology transfer and management for the country.
  • 3. “There are three proven models worldwide that are examples for emerging economies: The industrialization model of China, The outsourcing model of India and the model of Fundación Chile” (OECD) “…by 1982, Fundación Chile had its first salmon farm up and running. Seven years later it sold it to a Japanese company for $22 million” (Businessweek) “In 2004, its first year, the laboratory turned out 1.7m partially fattened lilly bulbs, using up-to-date biotechnology. Vitro Centre is a joint venture between local investors, Fundación Chile and a Dutch firm… (The Economist)
  • 4. Strong Brand Name Recognition
  • 5. Chile’s background 16 million people, native language spanish Upper Middle income country, per capita GDP US$ 12.000 (purchasing power parity) Average GDP Growth 1990-2005: 5,5 % Global Competitive Index 2007: 26 Significant progress in poverty reduction: 44% to 18% (1986-2006). Unemployment rate: 7.3 (best in 8 years) High coverage in primary and secondary education Participation in Tertiary Education has tripled in the last 15 years.
  • 6. Chile is performing fine in several rankings… GDP : Annual Growth POVERTY 1987 2006 Rates Selected % of population 44% 18% Countries: average Source: ECLAC 1990-2005 China 9.0 Singapore 6.1 South Korea 5.9 Chile 5.5 Indonesia 4.5 Corruption Perception Mexico 3.1 Index Ranking Poland 2.6 OECD 2.5 Among Latin 1st Argentina 2.4 Brazil 2.0 American Hungary 1.3 Countries Overall 20th Czech Republic 0.6 Ranking Among 146 Countries Source: Transparency International (www.transparency.org), 2005
  • 7. But… Percapita income still lacks behind the OECD (40% of OECD average income level) Unequal income distribution (0.55 Gini; 0.75 excluding the highest income decile) Economy too dependent on commodities: more R&D investment required Relatively low labour productivity Low quality of learning outcomes across the education system (Simce, TIMMS, PISA, IALS) Uneven distribution of opportunities in higher education and training Low participation of women in the labour force
  • 8. The country’s most important goal: doubling percapita income in the next 15 years to become a developed country IMF: per capita GDP (US dollars, Sept. 2006) USA (43,236) Canada (35,779) Hong Kong (35,396) Singapore (29,743) Taiwan (29,244) Spain (27,542) Finland (32,822) N. Zealand Australia (32,127) (25,655) UK (31,585) Sweden (31,264) France (30,150) Estonia (17,802) CHILE Lithuania (15,443) Argentina Slovenia (23,159) (14,838) Korea (21,887) Latvia (13,875) … and this is a major Malaysia (11,915) challenge. Only once in our history have we managed to double our per capita GDP in 16 years: 1988-2004.
  • 9. Business as usual is not sufficient; We must decisively move towards a Knowledge Based Economy Growth depends less on capital and labour accumulation than on efficient use of these factors (Total Factor Productivity). We need to move from static comparative advantages linked to natural resources to a stage where the incorporation of more knowledge into products and services is crucial. In brief - the capacity to transform knowledge into wealth, the capacity to INNOVATE.
  • 10. Are we prepared? Over the last decade TFP contribution has fallen dramatically…and forecasts are frightening. TFP would account for less than 25% of Chile’s growth in the 2007-2011 which compares poorly with the figure for competing economies (40% to 50% according to The Economist Intelligence Unit) TFP contribution to growth 2007-2011 Growth TFP Capital Labour 1984- 7.1 2.8 2.1 2.2 1997 1998- 3.6 0.9 2.4 0.4 2005 Selected CHILE countries* * Bálticos, Europa del Este y países de rápido crecimiento de Asia.
  • 11. Three decisions to move forward Innovation 1. Increasing public funding to support the strategy (new mining tax). 2. R & D tax incentive for companies. 3. Creation of a National Innovation Council for Competitiveness – National Innovation Strategy To propose a roadmap for a development process based on competitiveness supported by human capital and knowledge. To look after policy coherence Defining strategic objectives Defining the roles of agents Resource allocation aligned with the strategic priorities
  • 12. INNOVATION STRATEGY HUMAN BUSINESS R&D CAPITAL INNOVATION strategycally (value creation) oriented EFFICIENT INSTITUTIONALITY COMPETITIVENESS (long term vision, “accountability”, regionally focused) SELECTIVITY Focus on economic clusters
  • 13. Selectivity: focus on clusters Serv.medio Outsourcing 0.17 ambiente 0.16 Crecimiento PIB en 10 a ños Industrias 0.15 creativas 0.14 1 billón de pesos Alto Alimentos Acuicultura 0.13 Sectores que se procesados de consumo humano Servicios 0.12 destacan financieros 0.11 Vitivinicultura Fruticultura crecimiento (%) Plástico primaria Potencial de 0.10 Comunicaciones Horticultura Plataforma de negocios para LA 0.09 primaria Porcicultura y avicultura Educaci ón superior 0.08 Medicina Minería no met álica Medio Farmac éutica especializada Logística y Construcci ón 0.07 Consultor ía transporte Bovino Alimentos proc. para 0.06 y ovino Comercio minorista consumo animal 0.05 Industria Lácteo Miner ía del química cobre y 0.04 Productos Turismo 1 subproductos de madera Silvicultura 0.03 Celulosa Bajo y papel 0.02 Metalurgia 0.01 0.00 Alto Medio Bajo 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7 2.9 3.1 3.3 3.5 3.7 3.9 4.1 4.3 4.5 Esfuerzo para lograr la competitividad necesaria (1) Dentro del sector de Turismo fue considerado el subsector de Turismo de Intereses Especiales, que tiene un dinamismo much o mayor que el sector de Turismo tradicional
  • 14. Consolidate a business system aimed at the creation of value by means of innovation – in all its BUSINESS forms and aspects – as a competitiveness strategy INNOVATION in global markets. Strengthen a platform for the creation, dissemination and application of knowledge in a permanent and consistent research Science with strategic effort coherent with the country’s orientation productive and social problems. To establish an accessible and top-quality life-long-learning system which allows the Human country to rely on the relevant human Capital capital the Knowledge Economy requires
  • 15. Nz 0 2 4 6 8 10 12 14 ea la nd Ko re Ch a ec Fin Re lan p d Ch ec Ho a lla nd Ire la n Hu d ng ar G y re Human Capital Stock ec Ar e ge nt in a Ch M ile al 7,89 ay sia Sp ai M n ex Average years of schooling (ages 25-65) Co ic o lo m b P o ia rtu ga l Br az il
  • 16. Tertiary education graduates in the workforce Prof. and techn. as a % of the current workforce 50 40 30 20 10 0 d Co re a ec d Hu in il Ko y ile I re d M ia Nz Re p Ho d M ic o ia az Ch lla n lan ar n n a b ys Ch nla la Sp lom ng ex Br ea ala Fi
  • 17. Educational attainment of the adult population: the stock problem Distribution of the Population aged 25 to 64 years by highest level of education completed, 2003 100 90 80 70 60 50 % 40 30 20 10 0 Thailand Paraguay Peru 2002 Brazil 2002 Indonesia Jordan Chile 2003 Argentina Uruguay Malaysia Russian OECD WEI mean 2003/04 2002 2002/03 2002/03 2002 2002 2002 Federation mean 2003 2003 2002/03 Primary Lower secondary Upper secondary Tertiary (type B) education Tertiary (tipe A) education Source: Education Trends in Perspective – Analysis of the World Education Indicators. UNESCO-UIS/OECD 2005
  • 18. Basic competence (prose): 50% of the population in performance level 1 Adult Functional Literacy Survey (1998) 100% 90% 80% 70% 60% PERFORMANCE LEVEL 50% 40% Level 4/5 30% Level 3 20% Lever 2 10% 0% Level 1 y es ile en a ry lic l m ga an do ub Ch tat ed rt u ng rm ing ep dS Sw Po Hu Ge cR dK ite e Un ite Cz Un
  • 19. % of Enrollment in Higher Education 90 80 70 60 50 1991 40 2004 30 20 10 0 Chile S.Korea Estonia Ireland Latvia Lithuania
  • 20. Primary & Secondary Education: high coverage, low quality of learning outcomes (TIMSS, PISA, SIMCE). PRIMARY EDUCATION COVERAGE BY INCOME QUINTILE, 1990 - 2003 95,6 98,5 96,9 99,1 97,7 99,5 97,5 99,5 98,9 99,5 100 90 80 70 Percentages 60 50 40 30 20 10 0 I II III IV V Income Quintiles 1990 2003 SECONDARY EDUCATION COVERAGE BY INCOME QUINTILE, 1990 - 2003 96,9 98,8 100 92,0 94,2 94,5 87,7 87,1 90 80,8 80 77,2 73,9 70 Percentages 60 50 40 30 20 10 0 I II III IV V Income Quintiles 1990 2003
  • 21. Tertiary education enrollment by income quintiles 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 - 1990 1992 1994 1996 1998 2000 2003 2006 I 4,4 7,9 9,1 8,8 8,7 9,6 14,7 19,8 II 7,7 9,8 10,2 15,4 13,3 17,7 21,4 25,1 III 12,4 13,0 17,4 21,5 23,2 31,7 33,1 33,3 IV 22,0 23,9 32,1 35,2 38,9 43,0 46,9 47,2 V 40,7 41,2 54,8 60,0 65,4 67,4 73,6 67,1
  • 22. Participation in training ADULT PARTICIPATION IN TRAINING (15 to 60 years people) 16 13,9 13,6 14 12 Percentage 10 9,1 8 6 4 2 0 CASEN Survey 1998 CASEN Survey 2000 CASEN Survey 2003
  • 23. Most participants in training come from big companies… PARTICIPATION RATE IN TRAINING PROGRAMS BY ENTREPRISE SIZE 45,0 40,0 38,6 35,0 30,0 26,0 25,0 Rate 20,0 18,3 15,0 10,0 6,0 5,0 0,0 1 to 9 10 to 49 50 to 199 200 or more Number of workers Source: SENCE and CASEN Survey 2003
  • 24. LLL drivers and issues (1) High coverage in initial education but low quality of learning outcomes (TIMMS, PISA, etc.) A significant % of adult population without initial education lacking basic skills Students lacking academic and employability skills for a friendly school-to-work transition Increasing demand for post-secondary learning opportunities: education seen as the vehicle for social mobility (high private returns, etc.) Expansion of the market of post-secondary ed. and training providers (esp. private universities) but no public information about graduates labor market outcomes Concern about quality and relevance of programs, accreditation frameworks still to be piloted
  • 25. LLL drivers and issues (2) Disjointed “systems” providing LLL and training opportunities, Public effort on training limited to a tax incentive for companies; no funding arrangements for individual workers. Vocational education not well funded by government: poor quality and relevance for industry A significant amount of (competent) workers without formal recognition for their skills Lack of a shared vision and agenda among ministeries relevant for LLL: education, labour, economic development.
  • 26. LLL drivers and issues (3) Adult education, technical-vocational education, workforce training and career guidance systems seen as missing pieces in the 90’s reforms Learning outcomes and not only “inputs” and “processes” as the best approach once universal coverage is achieved Lack of a coherent public policy on vocational education (both secondary and postsecondary)
  • 27. Strategy Main purpose: design and piloting new arrangements, capacities and funding mechanisms supporting LLL Multisectorial: Min of Education; Min Labour & Social Affairs; Min of Economic Development; Industry Associations; companies Combination of remedial actions; learning innovations; institutional innovations; ”demostrative projects” Diverse clientele: adults with low educational attainment (unemployed / bad jobs); young people attending VE; Workforce
  • 28. A systemic view from the National Competency System Labour Market Intermediation / Information Services Industry Competency HR Management Endorsed Assessment & (recruitment, selection, National Competency Certification performance appraisal, Training System training, sucession plans, Standards System rewards, etc.) NATIONAL LABOUR COMPETENCY SYSTEM Technical Vocational Education (secondary, postsecondary)
  • 29. Where we stand 15 industry specific associations, 150 leading companies 500 occup MOBILIZE 2.STAKEHOLDERS Movilizar Actores DEFINE standards, + 15 economic Claves OCCUPATIONAL employability skills sectors 3.Definir Estándares SELECT AND 1.Seleccionar e AND EMPLOYABILITY models (8 SKILLS IDENTIFY Identificar Sector STANDARDS competencies) + INDUSTRY Productivo entrepreneurship skills UPDATE 8. Actualizar Estándares VALIDATE STANDARDS según Necesidades STANDARDS AS NEEDED 4.WITH Validar PROMOTE STAKEHOLDERS Estándares -Web site competency AND con Actores standards 7.Promover y DISSEMINATE KEEPING Claves -New regulation Difundir MANTENIENDO LA THE VENTAJA COMPETITIVE -Media coverage COMPETITIVA EDGE ADAPT CURRICULA EVALUATE AND 5.Adaptar Currículum y AND TRAINING TO 6.Evaluar y Certificar Formación según CERTIFY WORKERS / STANDARDS Methodology Trabajadores STUDENTS Estándares transfer to 40.000 workers certified 300 VET Employability skills for providers 7.000 students
  • 30. A case of best practice in Competency Development: the chilean Mining Sector ESTUDIO DE CREACIÓN ÁREA IMPACTO ECONÓMICO COMPETENCIAS CERTIFICACIÓN DE LABORALES COMPETENCIAS EN FUNDACIÓN CHILE MINERÍA PROMULGACIÓN LEY DE CERTIFICACIÓN DE Gerencia de Depto. Administración COMPETENCIAS Capital Humano Universidad de Chile 1998 1999 2000 2001 2002 2003 2008 2009 GIRA Acuerdo EXPERIENCIAS DEMOSTRATIVAS TECNOLÓGICA EN EMPRESAS PRIVADAS Y PÚBLICAS Fundación Chile España - Inglaterra Consejo Minero Codelco Chile – Francia Bid-Fomin Enami INTEGRACIÓN Consejo Minero Collahuasi LANZAMIENTO CATÁLOGO EMPRESAS Fundación Chile Barrick – Zaldivar COMPETENCIAS (Estandarización) Collahuasi Anglo American SECTOR MINERO 2009 Escondida Codelco Codelco Collahuasi Antofagasta Minerals Escondida Barrick INTEGRACIÓN PILOTO GUBERNAMENTAL EVALUACIÓN Chilecalifica 1371 Trab. Sence Codelco Collahuasi Escondida
  • 31. Where do we stand against the LLL agenda? Several pilots and demostrative projects articulating supply and demand at a regional level. Impact evaluation going on (WB). Some of the regulations needed in place or in final stage of approval (ie National Competency System) Competency “movement” underpinning curriculum development in most higher institutions across the country. “Modules” and “Competency Based VET Programs” being developed. National Agenda for Innovation and Competitiveness, a new driving force for LLL in the country, as far as it supports human capital in strategic economic clusters
  • 32. Current issues Competing policy agendas still a problem: M.Education too busy with the unfinished school reform and M.Labour with the pension reform and persistent youth unemployment A new policy for secondary and postsecondary TVET Qualifications framework informing pedagogical innovation and new learning materials Quality framework for QA and accreditation Diversifing funding mechanisms for learners beyond initial education Innovation in education & training.