Countries in developing Asia, including the Philippines, must improve their education systems to foster economic growth, the Asian Development Bank (ADB) said.
In a special chapter of its flagship annual publication, the “Key Indicators for Asia and the Pacific 2015,” the Manila-based lender noted that the average years of schooling in the region had doubled from 3.9 percent to 8 percent between 1970 and 2010, resulting in substantial gains in literacy and helping fuel growth.
This, however, has not been enough to produce sufficiently skilled workers to meet current or future demands. The report said skills remained weak in many parts of the region due to gaps in both the quantity and quality of education provided.
In some economies, as much as 90 percent of the high-skilled occupations in which a tertiary education is important is filled by people with high school degrees at most, the report said.
“Using labor force survey data, our analysis of Indonesia, Thailand and the Philippines suggests that it is high-skilled and a small set of middle-skilled routine occupations where specific technical skills are really necessary,” the report said.
This points to the need for continued efforts to expand the quantity as well as to improve the quality of education. For education to be growth promoting, the ADB said it must build cognitive skills.
“Addressing this problem can be an important source of growth. Per capita income in a typical developing Asian economy can more than double in a 20-year period if cognitive skills can progressively reach levels seen in more advanced economies,” it said.
The report used a data set of indicators from 67 economies, including 23 from developing Asia and the Pacific.
The ADB said that improving skills—especially cognitive ones that capture writing, reading, numeracy and problem-solving capabilities —could substantially increase a country’s growth prospects.
While governments in developing Asia spent over $1.2 trillion on education in 2014, the report noted that higher spending alone would not have the desired impact.
Improving the efficiency of spending is the key, it said, with rigorous evaluations and evidence-based policy decisions needing to be the cornerstones of reform efforts.
Better results are likely when public spending is aligned with private sector investment, when teachers are incentivized and when vouchers, subsidies and conditional cash transfers are targeted to needy and disadvantaged groups.
In addition, the ADB report said that while developing Asia had reaped substantial benefits from a manufacturing boom and the rise of modern services, changing work trends could halt further gains.
Up to 28 percent of existing jobs in some economies could be at high risk of disappearing as a result of technological changes, it noted.
New job opportunities will arise, but to make the most of these Asia’s workers will need a solid base of cognitive and non-cognitive skills – requiring communication and working in teams — to complement specific technical capabilities.