Guadalajara: International Book Fair: Higher Education for the Future of Work

On 1 December 2019, Gabriela Ramos gave a keynote opening a panel entitled “Higher Education for the new future of work” at the Feria Internacional del Libro (International Book Fair) in Guadalajara, Mexico. The panel included Jaime Valls, Secretario General, Asociación Nacional de Universidades e Instituciones de Educación Superior, Pankaj Mittal, Secretaria General, Asociación de Universidades Indias, Ricardo Villanueva Lomelí, Rector General, Universidad de Guadalajara, Enrique Graue Wiechers, Rector, Universidad Nacional Autónoma de México, Francisco Marmolejo, Líder Especialista de Educación Superior, Banco Mundial, Raúl Beyruti, CEO, GinGroup.

Ladies and Gentlemen,

It is a great pleasure to be with you here today.

I want to thank the University of Guadalajara and Ricardo [Villanueva Lomelí, Rector General, Universidad de Guadalajara] for hosting this event.

Mexico has been a reform champion! The country has launched ambitious reforms in a broad range of areas, and of course that includes education, thanks to all of you here. But let’s keep moving – there is no room for complacency.  

Education holds key to almost all the social and economic problems we face today. Higher education is a key driver of inclusive growth.

And, this topic is very close to my heart, since I spearhead the OECD Inclusive Growth Initiative. In fact, before flying to Guadalajara, I hosted the annual OECD Global Strategy Group meeting in Paris where OECD members and key partners discussed the most topical issue of “ageing”.

Ageing is not just about older people, it makes us think seriously how important it is to take a life-course approach to the problems we face today in education and in the labour market.

How do we unlock the potential of older workers and how to empower them to stay active in the labour market? I believe that the solution lies in education, and I mean starting strong from early childhood education through to higher education.

Indeed, the number of young people with a higher education qualification is expected to surpass 300 million in OECD and G20 countries by 2030, and of course we should welcome this great progress in access to education.

But having more access is simply another  step forward. The most important mission for us is to ensure that the skills acquired by students in higher education could align well with the skills needed in the labour market. The time spent in education will otherwise be wasted.  

What are the challenges in higher education today?

It is all about skills! Challenges are:

  • Anticipating skills needs;
  • Meeting immediate skills needs;
  • And ensuring the skills it produces are effectively used later

Today, we face a high level of skills mismatch.  

  • Employers often complain that they cannot find workers with the required skills.
  • At the same time, large numbers of higher education graduates face difficulties in finding job opportunities matching their qualifications.

This challenge of skills mismatch is common in all OECD countries. And Mexico is no exception!

  • The results of the General Exit Exam for Bachelor’s Degrees (EGEL) confirms that more than half of the students cannot demonstrate the basic level of knowledge and skills required in their field of study by the time they complete their bachelor’s degree. 
    • Out of all subject areas, the highest failure rate could be found in the areas of education sciences. The failure rate increased from 36% to 51% between 2011 and 2016.

We have documented all our analysis in our report Higher Education in Mexico, launched this year.  

  • In Mexico, 44% of bachelor’s graduates are overqualified for their jobs.[1]
  • Generally, students have limited labour market information given to them when they choose their programme.
  • Now, more specifically on Mexico, we lack diversity in the programmes offered.
    • Higher education institutions tend to deliver programmes that are likely to attract high enrolments.
    • They also go for less costly programmes in terms of staff and infrastructure.
    • As a result, nearly half of higher education programmes are offered in social sciences, administration and law, and 71.9% are offered at the bachelor level.
    • On the other hand, the current innovation capacity is very limited in Mexico.
      • There are only 0.7 R&D personnel per 1 000 employees in Mexico, compared to 7.7 in OECD countries, 25% of whom work in business [61% OECD average]. 
      • Only 17% graduated from engineering and 8% from ICT programmes.
      • The OECD Skills for Jobs database identifies shortages in science and engineering professionals and ICT associate professionals.
  • So, the demand for these workers exceeds the supply!

What we need in higher education today is to offer a more diverse range of programmes in different fields of study.

  • Mexico could train master’s and doctorate students to increase R&D activities and drive innovation in the private sector, particularly in its strategic industries (e.g. energy, automobile and aerospace).
  • In addition, to build a solid high-tech entrepreneurship ecosystem, Mexico needs to provide students with entrepreneurial skills so that they can create and grow their own start-ups and eventually employ others.

And let’s not forget that we also need to adapt a more diverse student base and to provide support to students from less advantaged backgrounds to avoid drop-out.

Exactly what skills matter?

I will be launching the 2018 version of OECD PISA results in a few days here in the University of Guadalajara.

This assesses 15 year-old students’ performance in reading, mathes, science  and we are increasingly incorporating digital aspect to our assessment to reflect the changes represented by digitalisation.

The skills they need are not the same skills we (me and you) needed! Then the skills’ provider – educational institution – should also be held accountable to find solutions for the future.

The future demand for skills

Today, we cannot discuss anything without mentioning the huge impact rapid digitalisation has on our lives and economy.

  • And for good reason – digitalisation is transforming the way we work, where we work, what we do at work, as well as the skills needed if you want to remain in employment.
  • And not just whatever jobs, we need quality jobs.
  • Across OECD countries on average, we project that 14% of jobs are at high risk of automation, while a further 32% will likely change significantly due to technological change. 
  • In Mexico, the risk of automation is an urgent concern, particularly as the share of employment in the manufacturing sector is higher than the OECD average (17% vs 14%).

Meeting immediate labour market needs

Higher education institutions continue to face important challenges in meeting immediate labour market needs to ensure a smooth transition into the future of work.

Reaping the benefits of technological change requires managing inevitable disruptions. Our data shows that too many individuals in OECD countries lack even the basic skills to succeed in a technology-rich environment.

  • According to the OECD PIAAC, half of Mexican 16-65 year-olds lack basic literacy (OECD average 19.7%).
  • And 60% of them lack basic numeracy (OECD average 23.5%).
  • These proportions are among the highest observed in the PIAAC participating countries, and are similar to those found in Chile, Ecuador, Peru and Turkey.
  • This is worrisome! Many people are lacking the basic skills to thrive in the digital economy.
  • Even among tertiary-educated adults, only 26% demonstrated good problem-solving skills in a technology-rich environment in Mexico (OECD average 48%).
  • This means that holding a tertiary degree does not always guarantee a high level of skills.
  • Mexico needs to do much more to raise the quality of their education systems.

And as mentioned, we need to ensure that the skills produced by higher education are effectively used. This is the most challenging mission for Mexico as I said in the beginning.

  • Finding a good job can be more difficult for Mexican higher education graduates than for their peers in other OECD countries.
  • In addition to over-qualification and partly as a result of the skills mismatch, young workers with higher education degrees in Mexico face the challenge of informality.
  • Although the prevalence of informal employment is lower for young higher education graduates (26.7%) than for workers in the same age group who completed only upper secondary education (45.8%), more than one quarter of the most qualified workers in the country have no social security or pension coverage.  
  • At the same time, almost half (45.7%) of young higher education graduates work in a job for which no higher education qualification is required.
  • Over qualification brings the problem of increasing informality for young workers.
    • On average, 14.5% of young higher education graduates do not participate in the labour market [OECD average 10.7%].
    • This places Mexico in a disadvantaged position, as the skills of these graduates are not used.

Last but not least, let me highlight that women continue to be under-utilised. And education should provide answer.

  • In Mexico, although women represent 53.1% of first-time graduates, many women with a higher education degree do not participate in the labour market.
    • Their inactivity rate is three times higher than that of male graduates (21.3% vs 6.9%)
  • And there is a glass ceiling! I met with business women this morning to discuss exactly this!
    • In 2016, only 5.2% of Mexican women had a seat on the boards of the largest publicly listed companies (20% OECD average).
  • Highly skilled women who are not participating to their full capacity in the labour market present a particularly large untapped potential to boost Mexico’s economy.

Against this backdrop, the number of higher education graduates in Mexico is expected to increase, and recruitment for strategic and specialist positions is expected to get even more difficult.

So this is becoming an even more urgent mission for us.

How do we tackle these pressing challenges of skills misalignment with both the future of work and current labour market?

  • Only the joint efforts from stakeholders in higher education, employers, and governments can improve the alignment of skills and knowledge, and thus the contribution of higher education graduates to productivity and economic growth.

The report I highlighted earlier (“Higher Education in Mexico: Labour Market Relevance and Outcomes”) presents a set of recommendations in three key areas where government and higher education institutions can effectively collaborate to equip students with skills relevant for the labour market.

  • First, they must aligning higher education with the changing needs of the labour market.
    • With the rapid changes in skills demanded of workers, they will need more flexibility and the possibility to return to higher education at a later stage of their life.
    • Distance education and online education in Mexico are growing and can be key in this regard.
  • Secondly, we must help  students succeed in higher education and the labour market.
    • This means creating a better pathways into and across higher education and a greater emphasis on lifelong learning .
    • The OECD has created our HEInnovate (Higher Education Innovate) programme which allows higher education institutions to assess the extent to which they encourage and facilitate entrepreneurial and innovative spirit in their students.
    • Additionally, following the example of NiñaSTEM Pueden, which we launched in Mexico in 2017, we can bridge over- or underrepresentation of certain profession with role models. Connecting students with role models in less popular but necessary careers can change perceptions of these paths and encourage more students to enter these fields.
  •  Lastly, we need a whole-of-government approach to enhance labour market relevance and outcomes.

Ladies and Gentlemen,

We invite government authorities, leaders of higher education institutions and employers to continue working together to optimize the quality, equality and relevance of higher education in Mexico.

An first-class higher education system is essential to drive stronger, more inclusive and more sustainable growth.

Thank you very much.

[1] Higher Education in Mexico, OECD, 2019

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