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Annex VIII Skills Development Working Group Report

Following the creation of the BBC on the occasion of the Fifth BRICS Summit held in Durban in March 2013, five sectoral working groups were established  to address sector or industry-specific issues relating to the objectives of the BBC to “strengthen economic, trade, business and investment ties amongst the business communities of the five BRICS countries.” The five working groups were: infrastructure, manufacturing, financial services, energy and the green economy, and skills development. In Brasilia Midterm Meeting, in February 2015, the Agribusiness Working Group was created.

As the Brazilian Chapter assumed the presidency of the BBC in July 2014, the leadership of the Skills Development Working Group was passed on to Brazil’s National Service for Industrial Training.

As the Group’s dialogue on work priorities evolved in 2014, interests converged on two lines. Firstly, the development of a joint vision on skills development to facilitate cooperation among the BRICS countries on this domain. In line with this objective, the Working Group is also promoting a permanent exchange of knowledge on foresight and forecast methodologies intended to enable BRICS countries to anticipate future trends in technologies and to prepare their workforce accordingly.

Following up on the objective to work out a common BRICS vision, the Skills Development Working Group will hold a conference during the 43rd WorldSkills in São Paulo in August 2015 with the title “BRICS: Creating a Joint Vision on Skills Development”. The objectives of the conference will be: (i) to facilitate a better understanding of the current thinking and trends on the role of skills development in BRICS countries; (ii) to propose a reference framework to guide policy making for skills development;   and   (iii)   to   identify   entry   points   for   discussion   with   the   New

Development Bank for the establishment of an agenda for the promotion of skills development.

The second priority agreed upon was the establishment of a skills development fund under the NDB with a view to promoting investment in BRICS countries to improve the quality and access to technical, vocational education and training (TVET). This funding mechanism would provide a technical cooperation platform for sharing of knowledge and lessons learned on improving systems and responses to evolving demands on TVET in BRICS and emerging/developing economies.

A concept note describing the Fund’s objectives, size, governance and oversight structure, among other aspects, was prepared with the help of a senior consultant with a long multidisciplinary experience working across sectors and practices, with a significant experience in skills development and South-South cooperation. The concept note was thoroughly discussed and approved by the members of the Skills Development Working Group during its monthly teleconferences in 2015. A copy of the document is appended to this report.

Concept Note

Skills Development Fund

  1. Background

Since the first BRICS summit held in Russia in 2009, significant progress was achieved by the five countries on practical steps to showcase their political commitment to reshape the global development landscape dominated by the traditional international financial institutions (IFIs), in particular the Bretton Woods Institutions (World Bank and the International Monetary Fund). Despite criticisms about the meager chances of five divergent nations to create a development finance institution, common political and economic drivers that unite these five nations could be enough to allow for the accomplishment of their established commitments. Heads of state of the BRICS countries have confirmed their interest in gaining decision- making power on global issues based on their weight and contributions to the world economy during recent years, promoting a more horizontal world order, traditionally dominated by Europe and the United States. They committed to build channels for South-South cooperation through the exchange of knowledge, ideas, and new approaches for social and economic development, boost trade and increase investments in infrastructure in their countries and in other emerging economies and growth poles in the global south.

The agreements to establish a new multilateral development bank, the BRICS Bank (now called the New Development Bank-NDB) and a Contingency Reserve Agreement emerged from the Sixth BRICS Heads of State Summit held in Fortaleza, Brazil in 2014. While the details of the governance structure are currently under consideration, the initial funding for the NDB and the contingency fund were announced. The initial capital for the NDB will be US$50 billion (Each BRICS country will start with the same share of US$ 10 billion while members are allowed to subscribe additional shares) and US$100 billion for the Contingency Reserve Agreement. The NDB headquarters will be in Shanghai and the first regional office will be in Johannesburg. The NDB is expected to bring an innovative approach to lending with new operational procedures, moving away from the neoliberal blueprint policy of the World Bank group and the Regional Development Banks, known as the ‘Washington Consensus’, which frames development as economic growth through deregulation,

market-liberalization and privatization1.

  • SCHABLITZK, Jan. The BRICS Development A New Tool for South-South Cooperation? BRICS Policy Brief. BRICS Policy Center. Rio de Janeiro, Brazil, December 2014.

In 2013 at the Fifth BRICS Heads of State Summit, held in Durban (South Africa), the BBC was established through a joint declaration signed by the heads of state of the BRICS countries. The overall objective of the BBC is to function as a platform to facilitate regular exchanges among private sector actors from the BRICS countries. The Business Council will act as the key mechanism to promote trade, investments and ties among the business communities of the five BRICS countries. According to the joint declaration, “the business council will ensure that there is continuous dialogue between the business communities of the BRICS nations and the governments of the BRICS countries. The Business Council will also identify problems and bottlenecks to ensure greater economic, trade and investment ties amongst the BRICS countries and

recommend solutions accordingly”.2

During the Business Council meetings, the core objectives of the Council were agreed upon:

  1. Identify concrete areas of cooperati The Council has so far agreed on the following as initial priorities: infrastructure, mining, iron ore processing, energy, pharmaceuticals, agribusiness, services (such as financial, ICT, transport, healthcare and tourism) manufacturing development, small, medium and large enterprise development, sustainable development, skills development, technology transfer and knowledge sharing;

  1. Identify priority areas of cooperation with countries from the global growth poles (Africa, Asia and Latin America);

  1. Exchange best practices and lessons-learned;

  1. Promote public-private partnership

The recognition of the role of the private sector has become prominent in the past years among development practitioners and multiple stakeholders. As such, the BBC will play a pivotal role in implementing the development cooperation and investment priorities of the NDB.

The BBC carries out meetings on a regular basis to discuss status of agreed activities in line  with the  Business Council Terms of  Reference  and priorities. The official representatives to the BBC are 25 members from private sector companies from each of the BRICS countries. For a complete list of members go to: http://www.brics-info.org/about-the-brics-business-council/

Brazil assumed the Chairmanship of the BBC represented by the CEO of Brazilian company Marcopolo in Fortaleza.3 Russia assumed leadership of the BBC in April 2015 with the Chairmanship of the President of the Russian Chamber of Commerce.

  • Annual Report 2013-2014 BRICS Business Council.
  • http://www.marcopcom.br/marcopolo_sa/en

The Business Council established six working groups4:

  1. The infrastructure working group (railroads, highways, ports and airlines).
  2. The manufacturing working group, which includes pharmaceuticals, healthcare, and generic drugs, high technology, processing and value added, steel mills and agro-processin
  3. The financial services working group, which includes banking, insurance, investments
  4. The energy and green economy working group (renewable energy, solar power, natural gas, oil and hydropower).
  5. The skills development working grou
  6. The agribusiness development working group.

The Skills Development Working Group (SDWG) is now led by the National Service for Industrial Apprenticeship from Brazil (SENAI). A Russian representative will lead the working group as of June 2015. Among the activities to be undertaken by the BBC relevant to the SDWG are “promoting cooperation on skills development and technology transfer” as  well as “support skills  development in Africa”. More specifically, each of the BRICS countries identified areas in which skills development should be prioritized and supported by the BBC5.

TABLE 1: Skills Development Priorities of BRICS Countries

BRAZIL6 CHINA7 INDIA8 RUSSIA9 SOUTH

  • *The deregulation working group [to be effective].
  • BRICS Business Council Annual Report 2013 –
  • Brazil has also identified the following areas as priorities for skills development: design of new

educational technologies, elaboration of education methodologies and curriculum design; creation of institutional management models; training of trainers; technical and pedagogical support (technology aid for skills development); laboratory services; design and operation of technical education and vocational training centers and the creation of a fund for international cooperation to foster joint programs on skills development.

  • China has also identified the following areas as priorities for skills development: carry out cooperation

between Chinese colleges, training schools and their counterparts in BRICS countries for Africa; invest in

internet connectivity especially in rural areas to enhance the outreach and effectiveness of e-learning; invest in logistics, transportation and courier businesses; nurture skilled worker to enhance the reach and effectiveness of on-line shopping businesses; establish equivalent levels between different standards in BRICS countries by working with standard setting agencies.

  • India has identified following areas as priorities – Developing transnational skills standards,

Recognition of certificates among BRICS nations, sharing of best practices on mobilization, industry engagement, assessment and training programs of scale and size. BRICS nations can share methodology on private sector led skills development programs and inputs on entrepreneurship linked skill development programs. The partnership also need to address the design of skill programs which can be rolled out in price sensitive market without depending on grant, it includes invocative credit mechanisms and innovative VET business models. India can share its experiences on designing skills eco system and creating private sector led VET models.

  • Russia has also identify following priorities for skills development: design and implementation of new

educational technologies and skills transfer methodologies; development of skills for new and emerging industries with high share of skilled technology-intense labor (including industrial robotics, unmanned automotive vehicles, drones, and vessels, additive technologies and new materials, etc. – for priority markets indicated in the National Technology Initiative).

        AFRICA
Mineral

technologies

Infrastructure Automotive     and

auto components

Strengthening

collaboration among                    BRICS Universities

Infrastructure
Micro electronics High                 end

manufacturing and                 high

technology fields

Banking,                  ,

insurance         and financial services

Partnerships

and  knowledge exchanges   on technical vocational education                        and training

Health care
Logistics Internet,

information  and communications

Building             and

construction industry

Portability   and

transferability of qualifications among                    BRICS countries

ICT
Biomass Transportation and logistics Chemicals         and pharmaceuticals   Mining
Electro-chemistry Medical care Education         and

skills development services

  Financial

Services

Laser technology Education      and

training

Electronic,

hardware

  Engineering
Embedded

systems

Energy            and

environment protection

Food processing   Artisans
Manufacturing

systems

Financial

services

Gems and jewelry   Specialized

welders

Integrated

solutions in metal mechanics

Electronic

information

Health               care

services

  Project

Management

Polymer

engineering

Communication

engineering

ITES  or  software

services/products

  Mathematics

and              Science teachers

Construction

technologies

Bio-technology Leather             and

leather goods

  Nursing
Renewable

energy

Pharmaceutical

industry

Tourism,

hospitality        and travel trade

  General

management

ICT Automobile manufacturing Construction   Finance
Welding Logistics management Agriculture       and Food Processing   Exchange                         of know-how

and     capacity development for       further education and training   (FET) colleges             in

        order to uplift standards
Production Automation

systems

Composite material      
Surface

Engineering

Enterprise

management

     
Metallurgy      and

Special Alloys

Marketing      
Extra High Electric

Power

International

finance

     
Virtual

production systems

       
Applied

Chemistry

       
Ceramic

engineering

       
Biotechnology        
Micro-

manufacturing technology

       
Oil and gas        
Health care

(and safety)

       
Wellbeing            at

workplace

       

Source: BRICS Business Council Report, 2013-2014.

II.                   Some key considerations about the BRICS countries

The demographic divide enjoyed by BRICS countries compared to aging populations in more industrialized nations is an asset that will benefit them in the near future. Urban population is rising and the child-dependency ratio is falling, pointing to a rising share of the working age population. The increasing labor force shows the huge demand-and-supply potential in the BRICS economies. They account for more than 40 percent of the global population, nearly 30 percent of the land mass, and a share in world GDP (in PPP terms) that increased from 16 percent in 2000 to nearly 25 percent in 2010, with forecasts for continuous growth in the coming years.

Table 2. Total Population (million) and Unemployment rates (2013)

Total   Urban   Rural   Unemployment

Rate (% of total population)

China   1357   731   629 4.1
India   1224   373   851 5.3
Brazil   201   171   29 6.1
Russia   143   106   37 5.5
South Africa 51 (2011)   n/a   n/a 25.1

Prepared by the author. Source: BRICS Joint Statistical Publication. IBGE. BRICS 2014. Fortaleza, Brazil

China, which has a land area of about 9.6 million sq. km, is the third-largest country in size after Russia and Canada. Russia accounts for around 20 percent of the world’s oil and gas reserves, while China has about 12 percent of the world’s mineral resources. In terms of agricultural land, Russia has about 121.5 million hectares of arable land. Brazil covers 47 percent of South America and is the fifth-largest country in the world (8.5 million square km), surpassed only by Russia, Canada, China, and the United States of America. Brazil is extremely rich in natural resources such as coffee, soybeans, sugar cane, iron ore, and crude oil, with around 60 million hectares of arable land, which is only7 percent of its land area, but with an agricultural area of 31.2 percent of the total land area. Russia is known for its massive deposits of oil, natural gas, and minerals. India is a strong service provider with a rising manufacturing base, while China is seen as the manufacturing workshop of the world with a highly skilled workforce and relatively low wage costs. South Africa is the 26th largest economy in the world, with a GDP of US$ 357 billion. It is a medium-sized country with a total land area of slightly more than 1.2 million sq. km and around 12 percent of arable land area. It is the world’s largest producer of platinum and chromium and holds  the world’s  largest  known  reserves  of  manganese,  vanadium,  and  aluminum-silicates.

South Africa generates 45 percent of Africa’s electricity and provides the 4th cheapest

electricity in the world.

In the 2014 Human Development Index, India was ranked 135 and South Africa 118; both are considered to be at a medium human development stage. China is ranked 91, Brazil 79 and Russia 57, all three with a high Human Development Index. Among the five countries, South Africa faces one of the highest youth unemployment rates, around 25 percent. Seventy three percent of the unemployed are under the age of 35. Access to quality education and skills development in South Africa remains limited.

According to a recent Organization for Economic Cooperation and Development (OECD) report10, 2012 graduation rates for vocational training programs (in relation to all upper secondary graduates) in Brazil were 10% for men and 14%for women; in China 60% for men and 59% for women. No data was available for South Africa, India or Russia.

The BRICS economies face different challenges for achieving a sustainable economic growth path. The need to improve social and economic inclusion is common to the five countries. As their middle classes grow, the demand for quality basic services such as health and education increases. Governments are faced with the need to increase social spending, advance policy reforms in health care, pension and education systems, as well as provide support to rural and marginalized areas. Some recent changes in their productive sectors showed great potential for the BRICS. Increased technology-intensive investments and a higher supply of human resources

  • OECD. Education at a Glance. OECD Indicators 2014. http://www.oeorg/edu/Education-at-a- Glance-2014.pdf

propelled growth in the services sector, which, in turn, led to higher productivity in the BRICS economies.11.

“Sharing experiences among the BRICS would be of great benefit. BRICS economies boast some of the largest private sector conglomerates in the emerging market economies. Many of these have been active players in the international market through collaboration and acquisitions abroad. There is scope to learn from the experience of these countries to take the private sector forward in other BRICS and emerging economies. There is also scope for drawing valuable lessons from the experience of encouraging private entrepreneurship in some countries, which have excelled in the high-technology sector. Pooling of expertise and collaboration in such areas could contribute to an improvement in skills and technologies, leading to higher growth of the BRICS economies. BRICS economies have some of the best engineering, architectural, medical, scientific, and management institutes that cater to the specific requirements of emerging market economies. Their expertise lies in the fact that the faculty and students develop niche understanding of emerging economy requirements and business conditions”12.

Equally, cooperation among BRICS institutions through knowledge and skills transfer could help improve the quality of technical education, the cornerstone for industrial and technological development. Setting up campuses in other BRICS countries will bring benefit and economies of scale. Promoting shared curriculums; faculty and student exchanges will create opportunities for enhancing human capital.

III.                  Skills development as a catalyst for economic growth

Developing human capacity and providing the necessary skills, allowing working age population to access the job market should be a policy priority for BRICS countries.

In 2013, Ministries of Education of the BRICS countries met at UNESCO’s headquarters in Paris, to discuss for the first time, opportunities for joint cooperation in the education sector. 13 In addition to agreeing to strengthen their mutual collaboration to promote better quality and access to education in their countries, they agreed that strengthening professional education and vocational training is an outmost priority to ensure inclusive and sustainable development.

Sustained economic growth requires the implementation of solid, long-term training, and skills development strategies. Skills requirements are evolving at a fast pace, because of increasing technology innovation and sophistication of labor markets. Training institutions need to be adequately equipped to respond to changing demands and to offer on a regular basis, access to the right skills. According to the International

  • BRICS REPORT.
  • UNESC BRICS, Construir uma Educação para o Futuro. Prioridades para o Desenvolvimento Nacional

e Cooperação Internacional, 2014.

Labor Organization14, “the cornerstones of a policy framework for developing a suitably skilled workforce are as follows: “broad availability of good-quality education as a foundation for future training; a close matching of skills supply to the needs of enterprises and labor markets; enabling workers and enterprises to adjust to changes in technology and markets; and anticipating and preparing for the skills needs of the future”.

Evidence suggests that a combination of good education and high quality training relevant to the labor market: (a) Empowers people to develop their full capacities and to seize employment and social opportunities; (b) Raises productivity, both of workers and of enterprises; (c) Contributes to boosting future innovation and development; (d) Encourages both domestic and foreign investment, and thus job growth, lowering unemployment and underemployment; (e) Leads to higher wages; (f) Expands labor market opportunities and reduces social inequalities.

During the past decade, dramatic changes in the world economy were spread headed by the fast changes in technology and the knowledge economy. Positive impacts include the creation of 900 million non-farm jobs in developing countries15. At the same time, emerging imbalances are resulting in skill shortages in largest world economies, while other developing countries are facing increasing  unemployment rates among the youth. Employers face growing shortages of high-skill workers required to raise productivity and sustain GDP growth.16

In China for example, the shortage of high-skilled workers could deter high economic growth rates. There is an increasing mismatch between skills that employers demand and those that could be offered by workers.

Box 1: Workers’ qualifications in China and India: development challenges

China rates just 4 per cent of its workforce as highly qualified. Only 36 per cent of workers have a lower secondary-school qualification. The remaining 60 per cent have little or no skills and regarded as “elementary workers”; these include some 200 million migrants from rural to urban areas. Four out of five German enterprises in China consider the lack of qualified workers the biggest obstacle to growth and competitiveness. However, estimates show that one-third of all secondary vocational education graduates are unable to find appropriate jobs, and about a third of university graduates fail to find work during their first year after graduation.

Key elements of the “Opinion on Further Strengthening Efforts on Highly Skilled Workers Cultivation”, issued by the Government in 2006, include: encouraging a broader variety of providers to supply training while also improving curricula and assessment; incentives to employers to hire more highly skilled workers; special remuneration schemes targeting higher-skilled workers; increased training for migrant workers and for business start- ups; and increased investment in training centers’ facilities and in the teaching profession. In

14INTERNATIONAL LABOR ORGANIZATION. Skills, Knowledge and Employability. http://ilo.org/global/topics/skills-knowledge-and-employability/lang–en/index.htm

  • MCKINSEY GLOBAL INSTITUT The World at Work: Jobs, Pay and Skills for 3.5 Billion People, June

2012.http://www.mckinsey.com/insights/employment_and_growth/the_world_at_work

India, employment growth is almost exclusively concentrated in the informal economy, where more than 90 per cent of India’s workers are employed at low levels of productivity and income. Half of the country’s population over the age of 25 has had no education and an additional third have at best primary schooling. Four out of five new entrants to the workforce have never had any opportunity for skills training. While enrolment in technical education institutions has increased (from 2.1 million in 2000 to some 3.8 million in 2005), there is a very high dropout rate in these institutions. There is a huge shortage of teaching faculty in engineering colleges. At the same time, significant skills shortages are reported throughout the formal economy. In the information technology sector alone, the current deficit in engineers is estimated to be around half a million. In order to address these challenges, India adopted an ambitious National Skills Development Policy in 2009. Its main aim, in the words of the Union Minister for Labor and Employment, is to empower all individuals through improved skills, knowledge and internationally recognized qualifications to give them access to decent employment and to promote inclusive national growth. It is envisaged, among other things, to increase vocational training capacity to 15 million students over the 11th Five Year Plan period (2007-12).

Source: THE BRICS REPORT

Latin America is the region with the highest talent shortages as reported by industries. Countries in this region on top of the list of skills shortages are Peru (67%), Brazil (63%), Argentina (63%), Panama (58%) and Colombia (57%). In India talent shortages amount to 61%, in China 36% and South Africa 6%. The global average is 35%17.

In order to build pipelines of workers with the right skills for the 21st-century global economy, collaboration with industry would need to become more systematic as for example in crafting curricula that are more relevant to industry’s needs, in building more schools and in training  teachers. Retaining mid-carrier workers will require vocational training to be strengthened as well as the possible links with secondary education. These actions could facilitate the transition for those students that will not be moving on to university.18

BRICS countries are making an effort to build links between industries, vocational training and labor markets. Public -private partnerships between vocational training centers and industries are essential in order to allow teachers to update their skills and make education more relevant to labor market needs. For example, public policies in China and Brazil facilitate internship programs in firms for vocational and technical trainees. These policies aim to allow students to gain practical experience in addition to classroom training, allowing them to be better prepared to access the job market after graduation.

The Brazilian “S System” is comprised of a network of institutions for vocational and technical training. The system is financed from contributions paid by industries

17MANPOWER GROUP. 2013 Talent Shortage Survey. Research Results. http://www.manpowergroup.com/wps/wcm/connect/587d2b45-c47a-4647-a7c1- e7a74f68fb85/2013_Talent_Shortage_Survey_Results_US_high+res.pdf?MOD=AJPERES

18   MCKINSEY GLOBAL INSTITUT. Op.cit.

and has centers throughout the country. It counts with eleven training institutions geared to service key sectors for the strengthening of the country’s economy. The “S System” could be a good example for the other BRICS countries.

Table 3: Brazilian “S System

National           Service           for            Industrial

Apprenticeship (SENAI)

Industrial     apprenticeship,     technical      and

technological assistance to industries

Social Service for Industries (SESI) Promotes the improvement of the quality of

life  of  workers  and  their  families  through actions in health, education and leisure.

Euvaldo Lodi Institute (IEL) Provides    entrepreneurial    and     leadership

training  as  well  as  technological  innovation

for industrial development.

National          Service          for          Commercial

Apprenticeship    (SENAC)

Technical   training   in   the   commerce   and

services sectors.

National Social Service for Commerce (SESC) Promotes  better  quality  of  life  for  workers

from the commercial sector

National  Service  for  Rural  Apprenticeship

(SENAR)

Professional and vocational training for rural

workers

National     Service    for     Apprenticeship    in

Transport (SENAT)

Technical   training   for   workers   from   the

transport sector

National     Service    for     Apprenticeship    in

Cooperatives (SESCOOP)

Professional  training  for  administrative  and

technical sectors from cooperatives

Brazilian Service for Small and Medium Size

Enterprises (SEBRAE)

Provides technical training for SME’s.

IV.                The Skills Development Fund

a.                   Objectives

During recent meetings of the Skills Development Working Group of the BBC, there was consensus on the need to establish a funding mechanism under the NDB, to promote investments in BRICS countries for improving the quality and access to technical, vocational education and training (TVET) and to strengthen projects implemented with support from the NDB. This funding mechanism will provide  a technical cooperation platform for sharing of knowledge and lessons learned on improving systems and responses to evolving demands on TVET in BRICS and emerging/developing economies. A Skills Development Fund (the Fund) will therefore be set up by the NDB following the proposal from the Skills Development Working Group. The Fund is to be established as a pilot initiative to promote collaboration among technical and vocational training institutions from BRICS countries. The Fund is expected to become operational in 2015, aligned with the setup of the NDB. The fund will be initially set up for five years to allow for the implementation of joint pilot initiatives among the technical, vocational training and learning institutions from BRICS countries.

Drawing from the experience of institutions from the BRICS countries, the key objectives of the Skills Development Fund will be to:

  1. Support the sharing of lessons learned on the design and implementation of robust skills development and training policies and sy (Exchange of best practices, competitions among BRICs countries and promotion of events including the creation of World Skills BRICS competition.

  1. Enhance programs/technical tools for anticipating skills needs through targeted consultations with enterprises and workers in existing and emerging industri

  1. Develop and promote new financing mechanisms in education and skills develo

  1. Strengthen monitoring tools and evaluation systems to assess the economic and social outcomes of skills development and traini

  1. Provide seed funding for the set-up of skills development programs and training centers, either independently or as joint initia

  1. Support initiatives that will increase access to skills development and training in marginalized areas of BRICS coun

  1. Carry out learning events on innovation in learning and skills transfer and coordinate the development of a shared vision for the future of new learning and skills development meth

  1. Support the exchange of students and instructors among BRICS countries, TVET institutions, as well as from other emerging and developing countries, clients of the NDB.

  1. Promote skills development and training in areas relevant to the other working groups of the BBC.

  1. Support the development of blended learning programs and enhance the use of technology for e learnin

  1. Support the enhancement of labor market information systems as well as develop the capacity to foresight future labor markets and skills needs (jobs of the future).

  1. Promote social dialogue aimed at shaping national skills development strategi

  1. Set up peer-review mechanisms for the establishment and implementation of standardized curriculu

  1. Promote stronger links with industries through job internships for vocational training students from BRICS countries.

  1. Implement initiatives to promote gender equality in vocational training and access to jo

  1. Creation of  a  BRICS  Skills  Development  Institute,  as  a  platform  for coordination on joint skills development program

  1. Support research and data collection on skills gaps in BRICS countries and propose remedial action

  1. Act as a catalyst to engage with  other emerging economies  in regions considered as “global growth poles” like Africa and Latin

The prioritization of Fund’s activities, based on the assessment of immediate and anticipated needs for skills in BRICS countries, will be developed during the next meeting of SDWG in Moscow on 5-7 July 2015.

The fund should provide financial support through the provision of grants and loans were relevant, for a mix of stand-alone technical assistance initiatives, policy implementation support activities and investments in professional education infrastructure. The Fund should have six main components: (1) policy implementation to improve the quality and access of TVET; (2) training and exchange of teachers and students; (3) sharing of knowledge and best practices; (4) set up of TVET centers; (5) implementation support, communications; (6) monitoring and evaluation; (7) capacity building of institutions/stakeholders.

b.                   Duration

The Fund should be established on a pilot basis for a period of five years by a dedicated team to support the set-up, resources mobilization and management of the fund. The administrative and financial management procedures for the Fund should follow the NDB established procedures.

c.                   Size of the Fund

The size of the fund for its initial “pilot stage” of five years will be determined based on consultations to be accrued out by members of the SDWG in their respective countries.

At the early stage, the Fund will attract direct contributions from government & private sector institutions; when NDB is fully established, it will provide the financial resources for  the Fund. Private  sector foundations, individuals and  other  bilateral partners both from outside the BRICS will also be able to contribute, with previous approval from the Steering Committee. The fund will prioritize proposals that are streamlined with skills development, vocational and technical training, along with demands for tertiary education and professional development where necessary and

identified in collaboration with the other working groups, rather than stand-alone activities.

d.                   Implementation

The Fund’s Steering Committee will determine the total number of grants to be allocated per fiscal year to institutions form the BRICS. Grants to other  countries (clients of the NDB) could also be considered by the Steering Committee. Grants will be monitored by the Fund’s management team in line with fiduciary and procurement regulations established in consultation with the NDB. A grant request form, monitoring and evaluation as well as both programmatic and financial reporting will be developed upon official establishment of the Fund.

e.                   Governance and Oversight Structure

The Fund will be governed by the principles of mutual accountability, transparency, full disclosure of financial and programmatic reports and commitment to support vocational training, skills development and technical training. The Fund’s management team will carry out regular consultations and reporting to donors. The proposed governance structure is as follows:

f.                    The Trustee

Upon the full operation of the Fund, the NDB will be the trustee of the Fund and responsible for the set-up and maintenance of proper records and accounts on donor contributions. Financial resources will be allocated through grants. Operational procedures (procurement, financial management) selection criteria, monitoring and evaluation guidelines for each grant will be drafted. The Fund management team will be responsible for the shortlisting (pre-selection) and the processing of grants upon approval by the steering committee. Only after approval by the steering committee of grants request, will the trustee be able to process disbursements of the financial resources.

g.                   The Steering Committee

The Fund will be governed by a Steering Committee consisting of representatives from the BRICS governments, industries and learning institutions. The Steering Committee will be co-shared by a high-level representative from the BBC and from a major donor. The Steering Committee will make decisions by consensus. In the absence of common agreement, decisions will be made in line with rules and regulations of the Steering Committee (to be drafted).

The Steering Committee will be responsible for (1) clearance of pre-selected grant submissions; (2) provide strategic guidance and direction to the Fund’s management team; (3) review and clear financial and programmatic reports to donors. The Steering Committee will meet on a yearly basis to discuss progress made by the Fund, guide on strategic resources mobilization and other issues that might seem

relevant. Location for the meetings will be decided on a yearly basis. Meetings could also be held by video conference.

h.                   The Management Team

A management team should be comprise of representatives from the BRICS countries. The team will be set-up to coordinate all activities related to the Fund. Such activities will include: (a) communicating priorities for skills development and training in BRICS countries to potential applicants; (b) providing guidance to the grant applicants; (c) maintaining institutional relations with grantees; (d) developing a monitoring and evaluation framework including deliverables and desired outcomes; (e) drafting regular financial and programmatic reports to be submitted to the steering committee; (f) responding to requests from donors; (g) developing a dissemination and communications strategy and ensuring its implementation; (h) extracting lessons learned from the implementation of the grants and; (i) disseminating best practices.

The management team will also coordinate the Steering Committee’s annual meeting, prepare background documentation and handle logistics in preparation for the meetings.

i.                     Resource Mobilization Strategy

Members of the SDWG will carry out a mapping of potential donors to the Fund in their respective countries. They will introduce the concept of the Fund, and share with them the rationale and strategic importance of its establishment as a mechanism promote skills development among BRICS countries. Based on initial consultations in each of the BRICS countries, a coherent and coordinated resource mobilization strategy will be developed during the next meeting of the SDWG in Moscow (Russia) on July 5-7, 2015.

j.                     Monitoring and Evaluation

Monitoring and evaluation (M&E) activities related to the Fund will be carried out the management team. A M&E framework will be developed and approved by the Steering Committee. M&E related to the grants will be the responsibility of the grantee. These activities could be implemented by regular staff of the grantees (with technical assistance) or by contracting out these functions with specialized agencies/institutes when appropriate. Each grant will have its own set of objectives, targets, benchmarks, and key performance indicators (according to its particular situation and capabilities) to monitor progress and to report results in accordance with the established policies for the Fund. Monitoring the progress of the Fund and the achievement of objectives will entail a process for reviewing continuously and systematically the various project implementation activities. The purpose of M&E is to:

(i) measure input, output and outcome indicators; (ii) provide information on progress towards achieving results and facilitating reporting to the Fund’s management team;

(iii)   alert   the   Fund’s   management   team   to   actual   or   potential   problems   in

implementation so that adjustments can be made; (iv) determine whether the relevant

stakeholders are responding as expected and intended by the grant; and (v) provide a process whereby the grantee could reflect and improve on their performance. The results of relevant M&E activities will be reflected in the mid-term and final evaluation reports.

k.                   Information and Communications Strategy

An information and communications strategy will be developed upon approval of the Fund. The strategy will be instrumental for creating awareness among the other working groups of the crosscutting nature of skills development and of the importance of the Fund as a mechanism to support skills development across sectors. The strategy will also support continuous communication and dissemination of information and updates to be shared with a wider audience.

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