SEOUL – Asia is facing a human-capital challenge. Over the last three decades, significant gains in workforce size and quality helped Asia to become a hub of global supply chains – and thus to sustain rapid progress toward advanced-economy income levels and living standards. But with workers increasingly unable to meet the demands of the labor market, the region’s remarkable development success could be derailed.
Asia has plenty of educated young workers. But, at a time of industrial upgrading and ever-increasing technological sophistication, the knowledge and skills gained in school are often insufficient. As a result, youth unemployment, underemployment, and job dissatisfaction are on the rise.
Throughout Asia, a significant share of workers feel they are over- or under-educated for their jobs, while employers often lament a lack of qualified graduates. A Manpower Group survey shows that 48% of employers had difficulty filling vacancies in Asia in 2015, compared to 28% in 2006. Meanwhile, many university graduates – including a whopping 45% in South Korea – are struggling to find jobs.
Despite variations among countries in Asia, some weaknesses in policies and systems designed to boost skills development are endemic. Among the most damaging is the inability of many countries to impart the right skills through pre-employment and on-the-job training.