STATEMENT BY EROL KIRESEPI
AT G20 SHERPAS MEETING
11 May 2013
St. Petersburg
Ladies and Gentlemen,
I take great pleasure for becoming one of the speakers of this important meeting of the “G20 Sherpas” today and thank Russian Government for the possibility to participate in this meeting.
We as the “B20 Task Force on Job Creation, Employment and Investment in Human Capital” pursued an inclusive approach while developing our recommendations, which I will touch upon today.
Representing 50 members from companies and national employers’ federations of 31 countries as well as representatives from IOE, ICC and BIAC we have met two times during the process up till now: in December 2012 in Moscow and in March 2013 in Geneva. We were not satisfied only with meetings, thus we exchanged views with the help of technology to develop the recommendations further.
I would proudly underline that these recommendations that we are sharing with you today are not only the result of the negotiations among this core team but we also shared the draft version with 150 IOE Member Federations in 143 countries around the world. Consequently, what we are raising today is the voice of business including the non-G20 countries!
The B20 recommendations focus around three main policy areas, which we believe are essential on one hand, to open up opportunities topeople to find a job and fulfil their full potential and on the other hand,tocompanies to grow and employ people. These key areas are:
- Increasing the employability
- Creating an enabling environment for enterprises and entrepreneurship
- Mastering the demographic challenge
Let me start with the first priority:“Making employability a top priority in national education and training systems”
Skills and competencies are the key determinants of an individual’s place and mobility in the labour market. Thus, every strategy to increase the employability must start with the education systems.
A sound basic education lays the foundation for subsequent vocational training or university education. Sadly, 775.4 million people worldwide are illiterate, and therefore doomed to remain on the margins of labour markets. This is an important issue for both developed and developing countries. Across the OECD, nearly one in five young people lacks basic literacy skills, and more than a quarter of all adults are early school leavers, with below upper secondary education. Against this background states must become more active to ensure access to compulsory and high-quality education systems that secure proper acquisition and application of the core competences.
Secondly, vocational training and university education must be consistently aligned with labour market needs and practical requirements!Students shall complete their education process with required competences.
Too often, curricula are designed without sufficient involvement of business and employer organizations, with the result that they do not meet the needs of labour markets. Additionally, in many countries work-based learning systems are inadequate because of inadequate economic framework conditions such as, for instance, high upfront costs. A further problem is that work-based learning systems, such as dual learning and apprenticeship schemes, are in some cases limited to traditional vocations and do not encompass modern professions.Thus, states should;
-create regulatory frameworks that stimulate the establishment of work-based learning systems, through tax policies and other incentives,
-enhance cooperation and dialogues on curricula between business, employer organizations and VET institutions, as well as universities,
-ensure that work-based learning systems, such as dual learning and apprenticeship systems, are responding to the needs of new professions.
Thirdly, strategies to increase the employability have to focus on lifelong learning.
Lifelong learning is a shared responsibility. For companies, lifelong learning both increases the capacity of staff, and serves as an important retention tool by increasing their capacity and competitiveness. For workers, training means an increase in their employability and labour market mobility. Thus, it is important to boost the interests and commitment of both enterprises and individual workers and their organizations to on-going training and qualification. Moreover, it is important that training systems are structured to allow transferability. In particular, areas of vocational training and higher education should dovetail more closely.
These demands are not new. The ILO G20 Training Strategy, which was agreed upon and welcomed by the G20 Leaders Summits in Toronto and Seoul in 2010, addressed these issues in various ways. States must now follow-up on their commitments and resolutely implement the training strategy.At the G20 Labour Ministers’ Meeting in 2014, the G20 Labour Ministers should report what has been implemented at national levels from the G20 Training Strategy, as well as from the G20 key elements on Quality Apprenticeships, and identify the remaining gaps and challenges.
Let me come to the second priority:“Creating an enabling environment for enterprises and entrepreneurship”
It is companies which create jobs and sustainable business is the key to sustainable jobs! However, companies require a stable and attractive business-friendly environment at national and local level to be able to do so. An enabling environment for enterprises and entrepreneurship is not an end in itself, but the precondition for more employment. Labour Ministers shall coordinate with all related Ministers depending on the issue, in order to avoid having policies impacting the employment negatively. Analysis of the employment effect of new regulations of any kind shall be made before issuance.The B20 call on states to effectively assess the impact of regulation on businesses and job creation!
Flexible labour markets that offer a diversity of work contracts are an essential part of an enabling environment. A diversity of work contracts allows companies to react rapidly to market changes and quickly create jobs.
A joint study by Boston Consulting Group (BCG) and International Confederation of Private Employment Agencies (CIETT) reveals stunning results regarding temporary agency work. The research underlines that 62% of companies would choose internal flexibility solutions (such as overtime) or not to do the work if they had no access to agency work, resulting in a “no job creation” situation.Moreover, flexible forms of employment can often be stepping stones into full-time and permanent employment, especially for disadvantaged groups. Thus, states should promote open and dynamic labour markets through flexible labour law and a diversity of forms of employment.These are needed to give companies the most opportunities to hire as many people as possible. Prejudices and inaccurate information regarding non-traditional forms of work have to be rectified.
Countries must focus also much more on an enabling environment that promotes start-ups, and that is conducive to enterprise growth. Start-ups are a significant driver of economic growth. Moreover, especially young entrepreneurs not only bring vibrancy and innovation to world economies, they also typically hire other youth. This is particularly important in view of youth unemployment. Special emphasis should be therefore placed on youth entrepreneurship and entrepreneurship education.States should develop and implement ambitious support and growth strategies for young entrepreneurs at the national and G20 levels. They should set up support systems for start-ups through easily accessible and timely information and advice. Moreover, the registration of companies needs to be as easy as possible. This is also very important to ensure that jobs are created in the formal sector and not in the informal sector. It is ofcrucial importance to ensure greater access to a variety of funding sources for SMEs.Last but not least, enabling innovation-friendly framework conditions through adequate R&D spending as well as investments in post-R&D activities will create new ways of doing business and new companies.
Ladies and Gentlemen,
Enabling environments are not created overnight. They are created step by step, through structural reforms in the area of labour market policies, tax policies, competition policies, and research and innovation policies. However, countries have to start this journey now!The G20 Heads of State and Government should present at the 2014 G20 Leaders’ Summit comprehensive and ambitious national reform strategies with clear implementation timelines, which should be then discussed with the B20 and the L20. Reporting on implementation should be a fixed component of each G20 Leaders Summit.
The third priority is “Mastering the demographic challenge”.
It is very well known that the ageing of populations will deeply affect the economic and social systems in G20 countries. Over the next 50 years, life expectancy at birth is forecasted to increase by more than seven years in developed economies. In the EU, the average old-age dependency ratio will double: in 2050 every person in the labour force will have to support 1.5 persons. In China, the elderly (aged 60 and over) will increase from 11.3% of the population in 2007 to 27.9% in 2040. It is a positive development that people live longer. However, if governments are unable to adapt their employment, social, and immigration policies, the ageing of societies will: threaten the growth potential of many economies; have serious negative consequences for the supply of skilled workers and weaken the stability of social security systems.The B20 therefore calls on G20 states to;
- adjust retirement ages in ways that stabilise the old-age dependency rate, take into account life expectancy, and increase employment levels at older ages by reducing the incidence of early retirement.
- Promote diversification within the pension system through the development of sustainable, insurance-based private pensions systems.
- Adapt immigration policies in line with labour market needs to allow the immigration of the labour force, which is needed for the economy.
We believe that the G20 Task Force on Employment mandate should include the demographic challenge, anddevelop in partnership with the OECD and the ILO, key principles forpolicies to tackle the aging of societies. We recommend that the G20 heads of states at the G20 Leaders’ Summit in November 2014 should commit to these principles.
Securing the State adoptionof these recommendations, the most important stage lies with the implementation.
The B20 shares the ambition of the Russian Government to foster implementation of G20 commitments. Without such action, the G20 process risks losing its credibility and legitimacy. The G20 Leaders agreed on important recommendations during the previous Leaders’ Summit. However, there is no transparency so far about action taken at national level to implement G20 commitments. The G20 Leaders should report back at every G20 Leaders’ Summit on the state of implementation and its impact. We even do not have comparable data to benchmark countries performance. Thus, a first priority should be to ensure accurate and robust statistics with the same basis ofcalculation applied to all G20 countries.
We, as B20, plan to monitor national responses to G20 commitments and will jointly with national employer and business federations provide a report of its findings to the G20 summit in 2014. Specifically, the B20, IOE and BIAC, jointly with their national member federations, will:
- monitor national responses to these priorities, as well as G20 commitments related to job creation,
- produce a benchmarking report to the G20 Summit in 2014,
- work closely with the L20 in advancing the debates at national level to realise these outcomes.
Thank you for your attention.