Vietnam needs skilled labor to become an upper-middle-income economy by 2035: BM | Company
Hanoi (VNA) – Vietnam will need a skilled labor to transform into an upper-middle-income economy by 2035, the World Bank suggested in its recently released report, “Taking Stock: Educate to Grow.”
In its semi-annual report, the lender said, “Vietnam needs a workforce with 21st century skills to grow. As the economy shifts from one based on low-skilled, low-wage jobs in manufacturing and services to a more innovation-driven growth model based on higher value-added industries and services , the Vietnamese workforce will need to acquire higher and more relevant skills.
The Vietnamese government’s socio-economic development strategy for 2021-2030 says the same, aiming to use scientific, technological, innovative and digitally transformative knowledge and build quality human resources as key drivers for higher productivity. and future economic growth. To achieve these goals, Vietnam must reform its education system to improve quality and access, and thus provide the necessary skills to the people, he said.
This edition also highlights the transformation of the higher education system as the key to boosting the country’s productivity and achieving its development goals, in the context of the country emerging from the pandemic and in a difficult global environment.
Report co-author Dorsati Madani said that although Vietnam’s economic recovery has been relatively stable, not all sectors have experienced the same situation.
The impact on workers and households during the crisis has been severe and long-lasting, with around 45% reporting lower incomes in December 2021 than a year earlier.
The impact of the pandemic is still present with companies
reportwidespread labor shortages from March 2022, which were felt most acutely in services and manufacturing, as well as in the Ho Chi Minh City area.
This, in addition to slowing growth or stagflation in key export markets, further shocks to commodity prices, continued disruption to global supply chains, or the emergence of new variants of COVID- 19, hinders the full recovery of Vietnam.
Statistics revealed that Vietnamese people have an average of 10.2 years of schooling, second only to Singapore among the Association of Southeast Asian Nations (ASEAN) countries.
Vietnam’s Human Capital Index is 0.69 out of a maximum of 1, the highest among lower-middle-income economies.
However, the low skills relevance of university graduates places the country in the bottom third of the 140 countries listed in the 2018 Competitiveness Index on skills relevance of university graduates.
A World Bank Skills and Enterprise Survey released in 2019 also indicated that 73% of sampled Vietnamese companies report difficulties in recruiting employees with leadership and management skills, 54% with socio-emotional skills and 68% with job-specific technical skills.
Focusing on tertiary and higher education, the WB report recommends reforming the education system to improve quality and access, and thus provide the necessary skills to the population.
According to the report, reforms to Vietnam’s higher education system could help support development goals.
The rising financial costs of pursuing higher education and the perception of diminishing economic returns to pursuing higher education have weakened demand.
While efforts to improve the business environment are essential to enable job creation, policymakers should also take steps to reduce the skills mismatch and improve the quality of the Vietnamese workforce.
Carolyn Turk, World Bank Country Director for Vietnam, said: “To maintain economic growth at the desired pace, Vietnam needs to increase its productivity by 2-3% every year.
“International experiences have shown that it is possible to increase worker productivity by investing in the education system, as an important part of a basket of investments and reforms. A competitive workforce will generate much-needed efficiency to Vietnam long-term.”
In his report, the world Bank predict that Vietnam’s GDP growth will increase by 7.5% in 2022 and 6.7% in 2023, with resilient manufacturing and a robust rebound in services serving as engines of economic recovery./.