Dir Lankan industries continue to incur immense economic costs due to the country’s inability create skilled workers by making the necessary education reforms, Dr. Nisha Arunatilake, Research Fellow at Institute Of Policy Studies of Sri Lanka says

The fertility rate of Sri Lanka has been in decline for decades, albeit a spike in recent years due to a number of reasons, which had led to a declining birth rate. On the other hand Sri Lanka's strong welfare system, including health, has increased life expectancy greatly. This has led to a rapidly growing ageing population and a declining work force, which will lead to a decline in productivity and economic output. Thus Sri Lanka needs to enhance the productivity of its labour force by increasing the skill levels of the workers. This is the only way to offset the declining output of the economy and ensure sustained economic growth.

According to Dr. Nisha Arunatilake the most efficient way to increase productivity is through education, training and up-skilling which will allow Sri Lankan workers to take advantage of latest technology.  An educated workforce will also assist the economy to move up the value chain by entering into advanced manufacturing, premium services and adoption of technology.

However a number of studies, including the IPS calculations based on Labor Force Survey data 2009, show that most of Sri Lankan workers who fill in as skilled workers are not formally qualified am that only 15% of individuals employed in the science and technology sector have a degree.

“We have a mismatch in labour supply and demand and the economic costs of this is immense,” Dr. Nisha Arunatilake added. “On one hand the number of workers over 40 have increased, from only 35% in 1990 to 52% in 2012, but also most employed as skilled workers do not have a degree. On the other hand we don’t have adequate science and technology-related training programmes.

Although labor shortages in certain sectors have driven the government to expand training opportunities in some sectors, as Sri Lanka produces insufficient numbers of science and technology related graduates and most of the AL students study arts, the demand for such training programmes is limited.

Realizing the challenges posed the Education Ministry has decided to introduce 26 new subjects by 2019 that are related to vocational training in a bid to meet the demands of the economy, Secretary to the Ministry of Education Sunil Hettiarachchi, said.

"The private sector always complaints that those who join the job market do not have the skills necessary. This is why we are attempting to introduce new subjects to fill the gaps," he said.

Hettiarachchi also stated that they will reintroduce the school inspector system to improve the quality of the education and the standards of teachers who for the most part do not possess university degrees.

However analysts question whether the introduction of vocational oriented subjects would be adequate to address Sri Lanka’s rapidly growing skill gap. Moreover even if Sri Lanka takes more transformative reforms to its education sector, what can the country do to address the immediate gaps in skilled labour?

Next article we will explore the perspectives of the industry about the skill gaps and the problems that are created by this issue.

The Ceylon Chamber of Commerce

Economic Intelligence Unit

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