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Canada’s Productivity Plunge: Time to Upskill Canadians

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Understanding Labour Productivity

Judging by recent headlines there are cries of concern over the fact that Canada’s labour productivity has stalled over the past eighteen months. But statistics released by the Organization for Economic Cooperation and Development (OECD) indicate Canada’s labour productivity growth has been lagging behind the United States and other G7 countries since at least the the 1980’s.

What is labour productivity and why should Canadians be concerned? Labour productivity is a broad measure of real gross domestic product (GDP) by hours worked across the economy. According to economists the measure is a key indicator of whether quality of life in Canada is improving or not. In the words of Pedro Antunes, chief economist at the Conference Board of Canada: “What it really boils down to is a sense that if we are able to generate more income with each hour worked, then we’re better off for it.”

The Complexity of Canada’s Productivity Problem

According to BMO chief economist Doug Porter the issue is complex and there’s no easy solution for Canada’s productivity problem: “If there was a straightforward formula to dealing with Canada’s perennial productivity problem, it would have been long since unleashed.”

Immigration and Productivity

One of the foremost ways Canada’s policy makers have tried to address this problem has been to import new workers to sustain output. But the majority of these same new workers end up employed in the least productive sectors of the economy- retail, food and accommodation, rather than filling growing skills gaps. As evidence, a recent Statistics Canada report cited the fact that nearly 60 percent of Canadians working in the growing food delivery and ridesharing sector are landed immigrants. With a greater investment in skills training and development these workers could work in jobs in demand and with higher productivity.

Enhancing Skills Training for Adults

As part of turning this slide in productivity around, the OECD says Canada needs to take a look at its current adult learning system and questions whether it is ‘well equipped to deal with the pressing challenges associated with changing demand for skills.’ Not only new workers could benefit from enhanced skills training and development but also workers currently in the labour force whose careers have stalled or whose skills have become obsolete due to technological change and automation. The OECD suggests that ‘Canada’s adult learning system should equip adults with the foundational skills needed to weather evolving changes in skills demand including, social skills, verbal, reasoning and quantitative abilities’.

We need to help workers become more productive by providing upskilling opportunities to respond to growing skills gaps that are hampering economic growth. The OECD points to a key challenge being how to engage older and low-skilled workers who traditionally have low access to adult learning opportunities. The answer they say lies in ‘a sharper focus on flexibility, guidance, financing and the impact of training’.

A Call to Prioritize Skills Training

While not the only solution to our plunging productivity woes, a long overdue examination of our skills training system and our investment in training by both public bodies and industry are both attainable and in the long-term, beneficial to economic growth and wellbeing.

It is evident that to date our skills training efforts have not improved labour productivity. In fact our current approach may actually be impeding it. If we are to heed the guidance of the OECD and other economic experts we need to shift and accelerate our skills training efforts. We need to embrace the fact that our collective skills development efforts represent a single dynamic ecosystem. This requires collaborating and acknowledging that no single entity alone can address the multi-faceted challenges we face. We should be striving to create a shared approach that emphasises skills development and work-integrated learning and maximize the synergies that exist between formal education, on-the-job training and retraining opportunities.

By making skills development a higher priority, integrating real-world application of skills, and re-thinking our credentialing systems we can enhance and accelerate our efforts to address shifting demographics, labour markets and skills gaps to drive economic growth and productivity as well as enhance social inclusion.

How Do We Build a Skills Ecosystem for a Future Economy?

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Embrace the Concept of a Skills Ecosystem

The first step to building a resilient skills training system in Canada is to embrace the concept that all our collective skills training endeavours comprise a skills ecosystem, that is a dynamic and interconnected framework that encompasses the efforts of industry, government, higher education executives, and economic development policymakers as they relate to skills development. The purpose of this interdependent and interconnected system is to cultivate, develop, and harness the diverse range of skills needed to thrive in a changing economic landscape. The defining characteristics of a healthy skills ecosystem are collaboration, innovation, and an unwavering commitment to lifelong learning.

Addressing Global Workforce Development Challenges

Canada is just part of a global economy facing daunting challenges related to navigating the complexities of workforce development, economic growth and advancement of society. Fundamental to achieving our collective economic and societal goals is building and supporting a skilled workforce. If we are to successfully address the challenges presented by shifting labour markets and bridge existing and emerging skills gaps we will need to rethink our approach to and support for skills development, that is our skills ecosystem.

The Importance of Collaboration

By recognizing that our collective skills development efforts are a single dynamic ecosystem we emphasize not only the importance of skills development but also the interconnectedness of its various stakeholders. This includes industry leaders and government bodies – from the policy developers to the higher education executives.

The success of our collective endeavours rests on our commitment to collaboration. In order to create and sustain a robust skills ecosystem, we must first acknowledge that no single entity alone can address the multifaceted challenges we face. State agencies, industries, individual firms, and educational institutions must come together and pool their diverse and substantial resources, expertise, and insights. This shared approach will ensure that skills development efforts are not only aligned with the needs of the economy but also tailored to the specific requirements of society, industry, and region.

Work-Integrated Learning and Lifelong Learning

These collaborative efforts need to be supported by an approach that emphasises skills development and work-integrated learning, and by adopting an integrated model recognizing the importance of lifelong learning and the synergy between formal education, on-the-job training, and retraining opportunities.

Work-integrated learning initiatives, such as cooperative education programs and partnerships with industry leaders, serve as the vital bridges between theoretical knowledge and practical application. By providing high quality work-based learning opportunities, we enhance students’ employability and equip them with the skills necessary to navigate real-world challenges.

Aligning with Future Economic Growth

It is paramount that our skills development initiatives be aligned with future economic growth. Effective workforce planning and development are essential for shaping the economic trajectory of regions and industries. A skilled workforce not only drives economic stability and innovation but also fosters greater social cohesion. By enhancing regional and sectoral understanding of the current workforce landscape and anticipating future needs, we can help focus our efforts on areas for growth and development.

A Skills-First Approach to Hiring and Talent Development

Realizing the full potential of our skills ecosystem calls for a transition to a skills-first approach in hiring and talent development. This paradigm shift puts a greater priority on competencies rather than formal qualifications. It is a much more democratic approach to ensuring broader access to employment opportunities and to increasing labour market efficiency. Implementing this approach requires close collaboration between CEOs, policymakers, and HR teams.

The Role of Higher Education Institutions

Higher education institutions (HEIs) also play a pivotal role in this ecosystem by integrating real-world application of skills into their curriculums. By providing work-based learning opportunities, co-developing curriculum and forging new partnerships with industry leaders, HEIs enhance students’ job readiness and career prospects. Strong social ties among students, faculty, and employers enable easily navigable pathways for students’ careers, making sure they are equipped with the latest skills demanded by the market.

Successfully navigating the changing nature of work also requires a ‘credentials rethink’ within higher education. Micro credentials are just one possible enhancement. They offer a flexible and diverse approach to upskilling and training and they can align with the needs of both learners and employers. HEIs also need to develop transparent standards and assessments that validate competency-based skills as a means of paving the way for alternate degree pathways that cater to the demands of the labor market

Collaboration is Key

Collaboration among industry executives, government officials, policymakers, and higher education executives is not just desirable – it is indispensable. Building a resilient and adaptable skills ecosystem is not only possible through strategic planning and increased investment in training and upskilling our workforce – it is imperative.

Micro-Credentials: A Strategic Approach to Modern Education

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In the face of unprecedented changes in the workforce, education systems must evolve to provide relevant, agile, and accessible training. Micro-credentials have emerged as a key strategy in this evolution, offering a flexible and targeted approach to skill development. The collaboration between industry and post-secondary institutions in crafting these credentials ensures they meet the highest standards of quality and relevance.

The imperative for continuous upskilling is evident as technological advancements reshape the economic landscape. Vulnerable groups, including young workers, low-wage part-time employees, women, immigrants, and Indigenous youth, are particularly affected by these changes. Governments and educational bodies are increasingly adopting micro-credentials to address these needs effectively.

Countries such as Australia, New Zealand, and members of the European Union have made significant strides in incorporating micro-credentials into their education systems. Reports from organizations like the World Economic Forum, OECD, and Future Skills Council highlight the necessity for adaptive education ecosystems that can respond to the shifting demands of the workforce.

The interest of the private sector in micro-credentials further underscores their potential. Studies from RBC and the Business Council of Alberta demonstrate the economic advantages of upskilling and stress the importance of partnerships between industry, education institutions, and government. Learners today encounter numerous obstacles, including limited access to education, inflexible programs, and rising costs. Micro-credentials offer a pathway to relevant, flexible, and career-enhancing education and training.

Governments recognize the need for diverse and inclusive learning paths to support a broad spectrum of students. Micro-credentials provide opportunities for targeted skill development, enhancing the adaptability and inclusiveness of education. By integrating global best practices and adapting them to local contexts, we can effectively implement micro-credentials, ensuring they fulfill the needs of both learners and the workforce in a dynamic economic environment.

The Imperative of Up – Upskilling Action Plan for Canada
Part 3 of a 3 part series

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As a means to effectively address Canada’s growing need for upskilling, we support the development of an all encompassing and robust skills ecosystem, one that is built on ongoing collaboration among all learning providers (including public and private post-secondary institutions, union training systems, and corporate training programs), learners, and employers. This dynamic ecosystem will serve as a framework for aligning the training our education system offers with the evolving needs of the job market and for promoting continuous skills development for our whole workforce.

A Skills-First Approach to Learning

We need to emphasize learning that is directly applicable to specific jobs or industries. The focus of our upskilling and reskilling initiatives should be to equip workers with the competencies they’ll need to thrive in their chosen field. By emphasizing practical skills acquisition we can help ensure that learners are better prepared to meet the demands of the modern workplace.

The success of this skills ecosystem relies on four key pillars: applied learning experiences, customized and flexible learning, competency-based assessment and recognition, and high quality data.

Applied Learning Experiences

Applied learning experiences are the key to complementing theoretical knowledge with practical application. Applied learning encompasses work-integrated learning, cooperative education programs, and on-the-job training. By immersing learners in real-world settings, their experiences will enable them to apply their skills in authentic contexts, which in turn will enhance both their employability and readiness for the workforce.

Customized and Flexible Learning

An effective skills and training system must recognize and address the reality that individuals have diverse learning needs and preferences. By offering customized and flexible learning pathways, just-in-time learning, online learning modules, hybrid learning formats, and skill-based learning units we can better serve individual learners’ schedules, preferences, and skill gaps. This approach promotes a high degree of engagement and helps to ensure that learning experiences are tailored to meet the specific needs of learners and employers alike.

Competency-Based Assessment and Recognition

Competency-based assessment and recognition mechanisms are an essential component of effectively validating the competencies learners acquire through a wide variety of learning initiatives. By using micro-credentials, badges, and industry certificates learners and employers are provided with tangible evidence of an individual’s skills and accomplishments. Such credentials can enhance not only a learner’s credibility their marketability. Aligning assessment practices with industry standards ensures that learners’ achievements are recognized and valued by employers.

High Quality Data

High-quality data is crucial in the skills ecosystem as it ensures that decisions regarding curriculum development, resource allocation, and policy-making are based on accurate and reliable information. Using detailed and precise data to report and monitor student outcomes enables educators and employers to identify trends, gaps, and successes, facilitating targeted interventions and improvements. Furthermore, it supports a transparent and accountable framework where progress and challenges within the ecosystem can be effectively communicated, enhancing continuous improvement and trust.

Through expanded initiatives to: foster ongoing collaboration among learning providers, learners, and employers; embrace the principles of skills-first learning, applied learning experiences, customized and flexible learning; and by adopting competency-based assessment and recognition, Canada can build and sustain a resilient skills ecosystem, one that will help meet the evolving needs of its workforce and drive sustainable economic growth and prosperity.

The Imperative of Up – Upskills Lessons from Abroad
Part 2 of a 3 part series

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The global need for up-skilling and re-skilling

Our global economy is a rapidly evolving one and there has never been a more pressing need for up-skilling and re-skilling programs. As industries undergo transformative changes driven by technological advancements and globalization, it has become ever more essential for individuals to continually expand and enhance their skill sets in order to remain competitive in the workforce. These programs empower workers to adapt to the shifting demands of the job market and contribute to enhanced productivity and economic growth at the national level.

International success stories

Internationally, countries such as Ireland and Singapore have long recognized the critical importance of investing in up-skilling and re-skilling initiatives as a means of bolstering their countries’ economic competitiveness. As one example, Ireland’s government has implemented the Skillnet Ireland program, promoting and offering a wide range of up- skilling and re-skilling courses specifically tailored to the needs of their industries. By creating strategic partnerships with industry associations and educational institutions, Skillnet Ireland has been able to provide accessible and relevant training opportunities that will ensure their workforce is equipped with the necessary skills to succeed in a modern economy.

Similarly, Singapore has launched the SkillsFuture initiative, aimed at empowering their workers to develop their skills over the entire course of their working lives. By providing subsidies and support for training programs, SkillsFuture enables Singaporean workers to maintain relevant skills and be prepared to adapt to a rapidly changing job market.

Upskilling in a Canadian context

In the Canadian context, there have been some commendable efforts to promote up-skilling and re-skilling, but there exists a need for expanded strategic investment and a strengthened commitment to collaboration between public and private sectors. This is essential if we are to ensure Canadian workers are equipped with the evolving skills and workplace competencies they’ll need to thrive in our evolving economy. It will be through fostering a culture of lifelong learning and providing accessible, high-quality training opportunities, that Canada can harness the full potential of its workforce, and drive sustainable economic growth that provides prosperity for all.

This is part 2 of a 3 part series. Click here to read part 1: “The need for Upskilling in Canada“.

The Imperative of Up – The need for Upskilling in Canada
Part 1 of a 3 part series

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Increased investments in providing upskilling and further training opportunities for Canadian workers are not just a matter of choice. The reality of today’s shifting economy and workplace make them a strategic imperative if we hope to sustain economic growth and ensure our competitiveness in the global marketplace. There are three compelling reasons why Canada should prioritize such investments.

Individual Empowerment

Firstly, upskilling and further training can empower individuals enabling them to better adapt to the rapidly evolving demands of the modern workplace. Technological advancements and automation are reshaping industries at an unprecedented pace. Expanding opportunities for workers to acquire new skills and knowledge, will help Canadian companies and industries by ensuring our workforce is agile, resilient, and capable of meeting tomorrow’s challenges. Adaptability both enhances employability and fosters innovation and productivity, driving overall economic growth.

Social Inclusion and Equality

Secondly, upskilling and further training promote social inclusion and reduce inequalities. Equitable access to quality education and training is a cornerstone of socioeconomic advancement.  Strategic investments in the continuous development of their workforce, enables countries to create pathways for upward mobility and economic empowerment for their citizens. This is especially true for individuals from marginalized communities and disadvantaged backgrounds. Expanding training opportunities benefits individuals and families and also strengthens social cohesion and promotes a more equitable society.

Economic Prosperity and Competitiveness

Finally, upskilling and further training contribute to long-term economic prosperity and competitiveness. A skilled workforce is a key driver of innovation, productivity, and economic resilience. By investing in human capital development, countries will attract investment, stimulate entrepreneurship, and foster increased industry growth. By creating a highly skilled workforce a country also contributes to its global competitiveness, enabling it to position itself as a hub for talent, innovation, and high-value-added industries. In this increasingly interconnected world, those countries that prioritize upskilling and further training will be better positioned to thrive in the knowledge-based economy of the 21st century.

Investing in Canadians’ upskilling and further training is both a wise investment in human capital and a strategic imperative as we seek to secure our future prosperity and competitiveness. It is by empowering individuals, promoting social inclusion, and driving economic growth through expanded investments in workforce training that we will lay the foundation for a more resilient,  innovative, and prosperous society. It is well past the time for countries like Canada to recognize and prioritize upskilling and further training as one of the fundamental pillars of their economic and social development agendas.