OECD outlines need for adaption of National Skills Strategy

Ireland will need to build adaptability into the National Skills Strategy if it is to keep pace with a rapidly evolving labour market.

Ireland has achieved relatively strong skills performance in many areas. Youth are achieving high levels of skills performance; the tertiary attainment level among young adults is among the highest across the OECD; and Ireland performs better than the EU average in terms of digital skills, with strong growth in recent years. Ireland also does a good job at activating people’s skills in the labour market, and their skills contribute to high levels of innovation.

However, Ireland still faces a number of important skills challenges. A challenge raised by the OECD is that many Irish adults do not have the skills to succeed in economies and societies of the future, and participation in lifelong learning lags behind top European Union (EU) performers. Skills imbalances in the labour market are also relatively high, and workplaces could be better designed to stimulate the use of workers’ skills. Furthermore, the governance of Ireland’s skills system is complex and requires strong collaboration and co-ordination across government and with stakeholders.

The OECD Skills Strategy Ireland: Assessment and Recommendations, published in 2023, identifies four priority areas for action and provides tailored recommendations for improving Ireland’s skills outcomes.

These four priorities are:

1. securing a balance in skills through a responsive and diversified supply of skills;
2. fostering greater participation in lifelong learning in and outside the workplace;
3. leveraging skills to drive innovation and strengthen firm performance; and
4. strengthening skills governance to build a joined-up skills ecosystem.

Securing a skills balance

In the context of rapidly changing skills needs, the OECD states that it will be essential for Ireland to develop a skills system that helps to secure a balance between skills demand and supply.

“Ireland needs to ensure that its skills system is flexible and responsive to address skills shortages and mismatches as they emerge and plan for future skills needs. A diversified supply of skills is also needed to build adaptability and resilience in the face of societal and economic change.”

To better secure a balance in skills in Ireland, the OECD makes three recommendations for the Government:

1. improve information and guidance for individuals on learning and career pathways;
2. strengthen learning and career pathways over the life course; and
3. make education and training provision more responsive to changing skills needs.

Lifelong learning

The report asserts that encouraging a culture of lifelong learning is “crucial to ensuring that individuals actively engage in adult learning after leaving the compulsory education system”.

“In turn, participation in different forms of adult learning results in a wide range of benefits, including higher wages for individuals, higher productivity for firms, and higher levels of social trust. Across countries, there is a growing need to upskill and reskill regularly over the life course to adapt to labour market and societal developments.”

To foster greater participation in lifelong learning in and outside the workplace, the OECD states that Ireland should:

• strengthen incentives to participate in lifelong learning for individuals;
• strengthen incentives to participate in lifelong learning for employers; and
• make lifelong learning more flexible and accessible.

Leveraging skills

“Optimally using people’s skills is associated with higher wages and job satisfaction for employees, high rates of productivity and innovation within firms, and stronger growth of the economy,” the OECD states.

The organisation further asserts that better leverage of skills will be central to supporting economic growth, promoting resilience to global megatrends, and ensuring Ireland can achieve its aims of digital leadership and a just transition.

To better leverage skills to drive innovation and strengthen firm performance, the OECD recommends that the Government:

• better utilise Ireland’s research talent and public research and innovation system to drive innovation within firms;
• promote the continuous improvement of leadership and management skills within enterprises; and
• incentivise and enable enterprises to make better use of the skills of their workers through innovative workplace solutions.

Strengthening skills governance

Outlining that well-functioning skills governance arrangements are the bedrock of a “joined-up” skills ecosystem, where skills policy design, implementation, monitoring, and evaluation are impactful, mutually reinforcing and rooted in an extensive and robust evidence base, the OECD outlined the importance of recognising “complexity associated with skills policies, compounded by the uncertain and rapidly changing environment in which skills policy decisions are made, makes strong skills governance essential”.

To strengthen skills governance for a more joined-up skills ecosystem, the OECD states that the State should:

• promote a whole-of-government and strategic approach to skills policy;
• support effective engagement with stakeholders throughout the skills policy cycle; and
• strengthen the collection, exchange, and use of skills information.

Speaking at the time of the publication of the report, OECD Secretary General Mathias Cormann said: “A strong focus on skills has been central to Ireland’s strong economic performance and improvements in wellbeing.

“However, there are significant challenges ahead with labour shortages, slowing productivity growth and the need to successfully navigate the skills implications of the green and digital transformation of our economies, while dealing with the impact of population ageing.

“Ireland can and must build on its strengths by better balancing skills demand and supply, by fostering greater participation in lifelong learning, leveraging skills to drive innovation, and strengthening skills governance.”