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[IWS] OECD/ECLAC: LATIN AMERICA ECONOMIC OUTLOOK 2015: EDUCATION, SKILLS, AND INNOVATON FOR DEVELOPMENT [9 December 2014]
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Institute for Workplace Studies-----------------Professor Samuel B. Bacharach
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16 East 34th Street, 4th floor--------------------Stuart Basefsky
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Economic Commission for Latin America and the Caribbean (ECLAC)
OECD Development Centre
Development Bank of Latin America
LATIN AMERICA ECONOMIC OUTLOOK 2015: EDUCATION, SKILLS, AND INNOVATON FOR DEVELOPMENT [9 December 2014]
[read online, 189 pages]
[full-text, 18 pages]
The Latin American Economic Outlook is the OECD Development Centre’s annual analysis of economic developments in Latin America. It is produced in partnership with the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) as well as CAF, the development bank of Latin America. Each edition includes a detailed macroeconomic overview as well as analysis of how the global context is shaping economic performance in the region. The Latin American Economic Outlook also takes an in-depth look at a special theme related to development in Latin America, taking into account future strategic challenges and opportunities. The 2015 edition focuses on the role of education, skills and innovation for development, taking stock of the current situation in the region, identifying the main challenges and opportunities in these fields, and presenting a series of policy areas where action is needed to impulse Latin America’s development.
Press Release 9 December 2014
Better education and skills are key to shift the economy up a gear, says latest Latin American Economic Outlook
Latin America’s GDP growth rate has slowed down in 2014, dropping below 1.5%. This is
the first time in a decade that the region grows less than the OECD average, according to
the OECD Development Centre, the Commission for Latin American and the Caribbean (UNECLAC)
and the development bank for Latin America (CAF). Given the projections in the
past weeks, any recovery in 2015 is likely to be challenging.
In their jointly produced Latin American Economic Outlook 2015, the three organisations call
for action to address this slowdown, focusing on the role of education and skills, and noting
that despite some recent progress, more needs to be done to raise educational standards
and address persistent and substantial socioeconomic inequalities.
“If we want to avoid a decade of low growth in Latin America, we must improve education
standards, enhance skills in the workforce and boost innovation. Policymakers need to
undertake ambitious efforts to unleash higher and more equitable growth”, OECD SecretaryGeneral
Angel Gurría said while launching the Outlook at the Ibero-American Summit in
Veracruz on 9 December.
Structural change - such as the diversification of the economy towards knowledge-intensive
sectors - is needed to supply the increasing demand for skilled workers. As noted by Alicia
Bárcena, Executive Secretary of ECLAC, “without the transformation of the production
structure there will be a link missing in the chain that connects education, productivity and
Such a link has important implications for income distribution. Diversification implies the
creation of quality, better-paid jobs, which in turn entails less informality and
underemployment - and hence less inequality. Policies for learning and diversification should
be at the top of the agenda in the coming years in Latin America and the Caribbean.
“In the absence of an exceptionally favourable external environment, the region needs to
deepen regional integration and address the structural challenges of development, to
support its growth potential, primarily in the areas of innovation and production patterns, and
education and technical capacities that these require”, said Enrique García, CAF President
and Chief Executive Officer.
The Outlook notes that, on average, the gap in education performance for a student in
secondary school in Latin America relative to an OECD student is still quite high: the
equivalent of 2.4 additional years of schooling. Furthermore, socioeconomic inequalities
strongly influence both access and education outcomes in the region. Only 56% of students
in the poorest quarter of the population attend secondary school, versus 87% of students in
the wealthiest quarter.
Limitations in the quality of education are also reflected in the skill shortages and
mismatches in the labour market, severely impacting the competitiveness of Latin American
companies. The region’s businesses face greater challenges in finding appropriately skilled
employees than any other region in the world. The Outlook shows that the probability of a
Latin American firm facing obstacles in finding staff with the adequate capabilities is three
times higher than a similar firm in South Asia and 13 times higher than a firm in Pacific Asia.
The issue is particularly prevalent in key sectors such as the automotive industry and
To tackle these acute skills shortages, targeted policies are needed in pre-primary,
secondary, technical and professional education. Policymakers need to provide more and
smarter investment in pre-primary education, where important soft-skills development takes
place, such as socialisation and learning perseverance, which are of critical importance in
the labour market. Policies are also needed to ensure that resources are redistributed to
reduce socio-economic inequalities. Classroom practices need adaption to ensure better
performance, including tutoring, managing teacher expectations and student motivation.
Increasing the quality of teaching also relies on monitoring and evaluation, and better
Finally, government and the private sector should work together to better connect technical
and vocational training with the demand for skills in a changing world economy.
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