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What is the role of local economies in supporting quality job creation and productivity?
By: Jonathan Barr, OECD Local Economic and Employment Development (LEED) Programme
15 February 2013

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The local economies that are recovering the quickest following the recent downturn are those that have a labour force that is adaptable to external trends and shocks. As the recent OECD Skills Strategy has highlighted, skills are the new global currency of the 21st century, with governments increasingly focusing on the need to boost skills as a means of returning to growth and supporting social inclusion. Indeed, skills are the great equalizer and a key route out of poverty for many individuals.

However, it is important to focus not only on developing skills through postsecondary and vocational education opportunities but also on their utilisation and deployment by employers. By ensuring that skills are utilized effectively, economies can become more productive and host better quality jobs, while simultaneously improving living standards and stimulating innovation. 

The OECD Local Economic and Employment Development (LEED) Programme looks at what might be done in order to put in place approaches to employment and skills that are better oriented towards the longer-term economic development needs of local communities and the competitiveness of national economies. Drawing on over three decades of research in local employment and economic development policy, the OECD LEED Programme has identified a series of priorities which should underpin such actions:

  • Better aligning policies and programmes to local economic development challenges and opportunities;

  • Adding value through skills by creating an adaptable skilled labour force, helping employers to better utilise skills in the local economy and supporting employment progression and skills upgrading;

  • Targeting policy to local employment sectors and investing in quality jobs, including gearing education and training institutes to emerging local growth sectors and responding to global trends; and

  • Being inclusive, so as to ensure that all members of the labour force can participate in, and contribute to, future economic growth.

Local stakeholders have an important role in developing skills approaches and our research has demonstrated the importance of partnerships on the ground, which are accompanied by mechanisms to promote flexibility in the national policy management framework. Local skills strategies are particularly important for certain at-risk groups, such as young people, who have been particularly hard hit by recent economic challenges. Tackling exclusion from the labour market is an area where employment and training organisations cannot work alone. In order to create real change, employment and training organisations need to adapt their own services and programmes, while also contributing to more strategic area-based initiatives to reduce the barriers that can act to exclude people from the labour force over generations. Vocational education systems can play a critical role towards improving the employability of young people by promoting soft skills, ensuring curriculum is responsive to employer needs, providing early and tailored career guidance on the local labour market, as well as linking people to the workplace through internship and apprenticeship opportunities.

Going forward, we have recently launched an international cross-comparative study, which builds on previous research by focusing on the role of local stakeholders in supporting job creation, as well as policy approaches which improve the resilience of the local economy, skills levels, and job quality.



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