Budget 2015: Education allocations must target youth unemployment and labour productivity

The 2015 Budget speech of the President included a commitment to increase the number of students entering universities to 100,000 by 2020 and also to allocate more funds for vocational training.
The current intake to Government universities is around 25,000 per year. Nearly 60% (150,000) of the students, who sit for the exam satisfies the minimum requirement, cannot enter the universities.
While this proposal is certainly a positive move, the challenge however would be to improve the teaching quality and the curriculum of the Government universities. To teach four times as many undergraduate students, would require additional faculty and high quality investments to build better infrastructure.
If the pool is unchanged, curriculum not revised and facilities not modernised, the increased demand will result in lower-quality faculty being hired and the education system would deliver poor quality graduates.
Faculty quality is the principal determinant of university quality. Therefore, the Government needs to create career opportunities to attract, develop and retain good academics.
In a competitive global world, if a nation does not continually improve its system of higher education, its relative performance will decline. In the medium term this is likely to show up in reduced economic competitiveness.
Sri Lanka’s public expenditure on education stands around 3%; therefore by increasing this spend and disbursing it effectively, the country can improve its labour productivity.
Sri Lanka’s current labour productivity is low compared to many industrialised countries. For example, US labour is five times more productive. Research suggests that there is a direct positive relationship between the amount spent on education and the level of productivity.
Total funding of higher education as a percentage of GDP is highest in the United States and Korea followed by Canada, Chile, Malaysia and Saudi Arabia.
Competitiveness
Therefore, there is little debate about the need to improve the quality of university education in Sri Lanka.
According to official data, a majority of the graduates in the Arts stream are unemployable. Their career path is that of conducting street protests and then getting absorbed into Government service.
The key to improving labour market competitiveness in the economy lies in raising human resource capabilities; that is, to make appropriate investments in human capital through higher education and professional training in order to more efficiently generate and manage new technologies to create wealth.
In this new era of intensified globalisation and international competition, we can no longer rely on cheap labour to gain competitiveness. We must continue to invest in our human resource, since the high growth industries of the future such as the Information Technology (IT) and biotechnology industries, require an increasingly skilled labour force.
Lessons learned from other successful countries in attracting FDI indicate that the ability to create a skilled human resource base is crucial for multinational companies to relocate firms and world class high-tech plants to new markets.
In Sri Lanka we are often told that the trained talent we have in the country is not sufficient to meet the local demand although it may be just sufficient at the moment for some sectors in the domestic market. The three main reasons for this emerging situation are,
a) because the education system in the country is not delivering the volume and quality desired
b) we are losing our highly trained talent to other developed markets
c) the existence of stringent labour market regulations limits training opportunities for young people to learn and grow new skills.
The areas of growth for the Lankan economy in the future according to the 2015 Budget statement would be in the services and knowledge sectors. Therefore given the current development of the BPO and tourism industry as well as skilled opportunities in foreign countries, there is now a need to revamp our education and training infrastructure according to the job market and lure back some of our brightest people back to strengthen our talent pool.
Budget 2015
Today the most mobile people are the skilled, and they are sought after. Most governments are easing restrictions on the entry of qualified people.
For a start, the Government should focus on wooing our highly-skilled professionals working abroad by making it very attractive for them to come back. The Government’s move to offer dual citizenship, duty free permits and also other benefits could entice back some of our top Sri Lankan expatriates who have gone abroad to make their money but still feel the tug of their home country to return.
Therefore we need to be more imaginative about attracting our trained talent abroad and developing and retaining our skilled talent that we have in Sri Lanka. To achieve that, we need a framework to strengthen the overall governance in the country, a framework that provides a way of looking at the skills and abilities of our people, and how these can be used successfully to create wealth and finally bring all education and skills training interventions under one roof to ensure alignment with country’s development goals.
Budget 2015 addresses some of these HR issues, but as Senior Minister Dr. Amunugama pointed out some time ago, simply increasing public spending on education would not serve any purpose, if the country does not change its curriculum to suit a modern economy.
(The writer is a thought
leader in HR.)