Economic Priority Areas, Jobs and Skills for Growth in Trinidad and Tobago

Transcription

1 Economic Priority Areas, Jobs and Skills for Growth in Trinidad and Tobago FINAL DRAFT by Sandra Sookram, Ph.d. (Econ.) ( ) SUBMITTED TO: President, NIHERST, Woodford Street, Newtown July 1, 2012

2 Table of Contents 1. Introduction Terms of Reference Background Purpose and Scope of Work Methodology Determining Priority Education Areas Demand and Supply Indicators What are the economic priority sectors? Macroeconomic and General Labour Market Context Growth and Employment Trends Productivity Sectoral Growth by Employment Enterprise Growth Growing and Contracting Sectors Exports Foreign Direct Investment (FDI) Key Characteristics of the Labour Force Age, Occupation and the Labour Force Education and the Labour Force Sectoral Analysis and Employment Prospects Projected Employment Change by Sector Emerging Sectors: New Industries, New Jobs Digital Export Agriculture Medical and Health Care Tourism Manufacturing Renewables (Solar Energy) (emerging) Creative Conclusion Bibliography... 57

3 List of Figures Figure 1: Steps for Determining Priority Areas... 7 Figure 2: Historic and Forecast GDP Growth for Trinidad and Tobago, Jamaica and Barbados Figure 3: Unemployment Rates Trinidad and Tobago, Jamaica and Barbados Figure 4: Productivity Growth: Figure 5: Main Drivers of Productivity Levels according to Industrial Sector Figure 6: Employment by Industry: 1995 and Figure 7: Employment Growth by Industrial Sector: 1995 and Figure 8: Historic and Future Exports of Goods and Services for the period Trinidad and Tobago, Jamaica and Barbados Figure 9: Exports from Selected Sectors for the period Figure 10: Foreign Direct Investment as a % of GDP Trinidad and Tobago, Barbados and Jamaica: Figure 11: Population Pyramid for Trinidad and Tobago Figure 12: Population Pyramid for Trinidad and Tobago Figure 13: Population Pyramid for Trinidad and Tobago Figure 14: Unemployed Individuals According to Level of Education Trinidad and Tobago Figure 15: Expenditure on Education and National Security Figure 16: Types of Skills Lacking in the Trinidad and Tobago Labour Force Figure 17: Category of Staff Most in Need of Training Figure 18: Use of to Communicate with Clients and Suppliers Figure 19: Establishments Use of Websites Figure 20: Tourist Arrivals to Trinidad and Tobago

4 List of Tables Table 1: Priority Educational Areas... 9 Table 2: Priority Areas International and National Table 3: Gross Domestic Product of Trinidad and Tobago (% contribution): Table 4: Enterprise Growth According to Industrial Sector Table 5: Growing and Contracting Sectors Table 6: Unemployment Rate According to Age Groups Table 7: Unemployment According to Occupational Groups Table 8: Funding the GATE Programme Table 9: Projections of Employment by Industry Group Absolute Levels and changes ( 00s) Table 10: Digital Opportunity Index: Selected Caribbean Countries and their Position in the World (2008) Table 11: Number of Bachelor Degrees Awarded and Projected to be Awarded: 2005 to Table 12: Number of Graduate Degrees Awarded and Projected to be Awarded: 2005 to Table 13: Major Traditional Agricultural Commodities produced Table 14: Contribution of the export agriculture sector to GDP at Constant prices (2000) (Millions of Dollars) Table 15: Employees in Export Agriculture Table 16: Types of Vacancies in the Agricultural Sector Table 17: Numbers of Undergraduate and Postgraduate Degrees Awarded and Projected to be Awarded at the Faculty of Agriculture: 2005 to Table 18: Comparison of Selected Medical Care Professions among Countries Table 19: Average Number of Human Resources in the Public Sector Institutions Table 20: Supply of Medical Personnel from Medical Faculty Table 21: Numbers of Undergraduate and Postgraduate Degrees Awarded and Projected to be Awarded in the Area of Tourism to Table 22: Programs Essential to Advanced Manufacturing at the Ph.D. Level Table 23: Programs Essential to the Renewable Energy Sector - Management Table 24: Programs Essential to the Renewable Energy Sector - Engineering Table 25: Exports of Creative Goods for Selected Countries Table 26: Selected Niches in the Music Industry... 53

5 1. Introduction 1.1 Terms of Reference This report evaluates the economically important sectors of the Trinidad and Tobago (T&T) economy which are presently, or have the potential to be, constrained by skill deficitsand provides recommendations as to the direction of Government Assistance for Tuition Expenses (GATE) funding over the medium-term. 1.2 Background There is an urgent need to identify the current and emerging national economic priority areas that would support the thrust to a knowledge-driven economy for T&T. The economic priority sectors were categorised into those sectors with the highest employment growth potential, those sectors potentially constrained by skill deficits, and emerging sectors that could deliver sustainable economic growth and jobs across T&T. The approach also allowed for a derivation of the type of skills set that is required to grow and develop the particular sector. These skill sets includemanagement and leadership skills, professional skills, technical and equivalent skills, and intermediate and higher level vocational skills. 1.3 Purpose and Scope of Work The Government of the Republic of Trinidad and Tobago (GORTT) is seeking to move the country away from its heavy reliance on the energy sector towards a knowledge-driven economy. It is therefore concerned with increasing the skills of its labour force to ensure that T&T is positioned on the path of sustainable development, the economy is diversified and that it becomes more globally competitive. A large part of this effort involves improving and expanding the skills and training of the labour force to meet current and projected job market demand. Over the past few years, and principally with the introduction ofgate in 2004, there has been a substantial increase in the demand for tertiary education both at the private and public tertiary level institutions. It is, therefore, expected that GATE will play a key role in the Government s drive to develop its human capital, diversify the economy and enhance global competitiveness. The focus of this study is primarily on tertiary level education in T&T. The objectives of the study are as follows: 1. Highlight key drivers of change in T&Tand the global economy, which may impact on growth, employment and skills over the medium-term. 2. Identify the national economic priority sectors for growth (including those sectors with the highest employment growth potential), the economically significant sectors potentially constrained by skill deficits, and emerging sectors expected to deliver sustainable economic growth and jobs across T&T.

6 3. Quantify the current and predicted future demand for skills in each of the identified economic priority sectors, with a focus on management and leadership skills, professional skills, technical and equivalent skills, and intermediate and higher level vocational skills. 4. Recommend economic priority areas for GATE funding. 1.4 Methodology This research involves a literature and statistical review to identify the economically important sectors to the T&T economy with regard to employment, productivity, exports, foreign direct investment and the current and likely emerging educational needs necessary for sustainable development. The basic steps involved in the mixed methodological approach are as follows: I. Review and analysis of the relevant literature on global economic forces impacting higher education and the domestic policy agenda. II. III. IV. Research on the programme strategy of relevant agencies in the higher education sector including UWI, UTT, COSTAATT, ACTT, NIHERST and the NTA. Review of the literature and the relevant statistical data to identify the national economic priority areas in terms of employment, productivity, exports, foreign direct investment and the existing and prospective emerging future skill needs which will arise as the economy develops. Quantitative analysis and econometric forecasting of potential job needs by economic priority areas. V. Ranking of economic priority sectors for GATE funding. Apart from the desk research on the various institutions outlined below, meetings will be held with senior management of key higher education institutions to identify the sectors that require new programmes and to determine their strategic response to evolving industry needs. Higher Education Institution NIHERST NTA ACTT Focus Area Foresight Sector Studies TVET Sector Studies National Qualifications & Credit Framework UWI UTT Draft Strategic Plans

7 COSTAAT Justification for New Programmes SBCS (representative of private institutions) Identification of the current and future demand for skills and the national economic priority areas for attention requires review and analysis of the following documents: 1. World Development Reports, World Bank 2. World Economic Outlook (2011), International Monetary Fund (IMF) 3. World of Work Reports, International Labour Office (ILO) 4. Skills for Sustainable Development Report, Department for Business, Innovation and Skills, UK 5. New Zealand Skills Strategy Report, Government of New Zealand 6. Global Economic Prospects (2011) Budget Statement, Ministry of Finance, Trinidad & Tobago 8. Medium-Term Policy Framework , Ministry of Planning & the Economy, Trinidad & Tobago The second phase of the research involves the identification of the educational priority areas and encompasses examining the: 1. The economic sectors with the highest forecasted employment growth taking into consideration regional and international indicators. 2. The emerging economic sectors which are expected to stimulate sustainable economic growth and encourage competitiveness at the global level. 3. The sectors thatare skill-deficient at present, but which are considered to be economically important to T&T s economy. The general methodological process for determining the economic priority areas which is employed in this research can be summarized in the following outline: Figure 1: Steps for Determining Priority Areas Employment: Jobs and skills Skills Mismatches Drivers of Change - Projections - Significant sectors and their skill deficiencies Key Sectors Key Occupations - Projections - Survey of Literature - Emerging Sectors Priorities for Action

8 Source: Adapted from Skills for Jobs: Today and Tomorrow The economic priority sectors would be categorised into those sectors with highest employment growth potential, those sectors potentially constrained by skill deficits, and emerging sectors that could deliver sustainable economic growth and jobs across T&T Determining Priority Education Areas Demand and Supply Indicators Various studies that measure skills deficits point to the fact that there is no single perfect measure to do so, since these deficits can assume a range of forms such as, employment changes due to the number of adequately skilled workers increasing or decreasing in the labour market or the rearrangement of supply and demand within particular occupations in the labour market. Skills demand can be assessed through changes in and/or predictions of changes in sectoral employment, information obtained directly from managers/firms based on their expectations of current and future skills demand or based on the return on wages to qualification levels or occupations. Measurement of supply can be undertaken through an examination of qualifications held by individuals or through the provision of training by firms. According to Greig et al (2008), the measurement of skill needs requires the use of several methods to achieve an adequate degree of accuracy. Additionally, this and other studies identified the best techniques as those that encompass the use of sophisticated forecasting econometric models to analyse both future demand and future supply, and combines these results with an evaluation of national demand and supply drivers. This methodology extrapolates future demand (and supply) based on historical and long-term data trends and are therefore not affected by marginal and insignificant movements in the labour market. A weakness of the technique is that it is not able to capture the effects of sudden shocks and resulting impacts to the economy and labour market (for example, the current global crisis). This study adopts the technique described above and employs an economic modelling process to identify present and futureskill needs by assessing the industrial sectors in the labour market to determine the demand needs of employers and usesgraduate data from the largest tertiary education institute in the region (The University of the West Indies) to study the skills being supplied on the labour market. See Appendix 2 for forecasting methodology. 2. What are the economic priority sectors? The desktop review of key tertiary education institutions with regard to future directions of the institutions yielded the information shown in Table 1.

9 Higher Education Institutions NIHERST Table 1: Priority Educational Areas Source Documents Present Priority Areas/Programmes Future Education Areas/Programmes Foresight Sector Studies Biotechnology & Agriculture 2011 Study Attached More information available at Health & Wellness website: Fashion ations/index.htm Business Models, Manufacturing & Value Chains Renewable Energy UWI Strategic Plan Strategic Plan Attached Other information may be at Website: fice/strategicplan.aspx Strategic Aim 3: Research and Innovation To become internationally recognized as a centre of excellence in research, knowledge creation and innovation on matters related to the Caribbean and Small Island Developing States Strategic Aim 4: Service to UWI-12 countries To create an Open Campus to enable the University to expand the scope, enhance the appeal and improve the efficiency of its service to the individuals, communities and countries which it services Strategic Aim 5: Transforming Leadership and Administration To develop and establish a people-centered, culture-change process To develop and establish peoplecentered standards for the functioning of the University and the service output Strategic Aim 1: Teaching and Learning Molding graduates that are career-ready, exceptionally well-rounded in their disciplines, articulate and in possessionof superior problem-solving and critical- thinking skills. Strategic Aim 2: Graduate Studies To make the UWI an internationally recognized centre of excellence for graduate education especially for: The delivery of first rate graduate programmes Its pre-eminence in Caribbean scholarship To reform the administrative structures and systems towards implementing and supporting the vision and aspirations of UWI for the planning period To strengthen the structure and process for University wide planning Its output of graduates who are at the cutting edge of contemporary scholarship, clinical skills, professional development and expertise Strategic Aim 6: Marketing and Branding To develop and implement a University-wide marketing and communications strategy Formulating a web-based strategy to project UWI effectively in terms of its different dimensions Strategic Aim 7: Funding the Enterprise Alter the modalities of funding from contributing governments to provide for greater predictably over the plan period, while allowing

10 for the flexibility of the University to respond to agreed changes. Ensuring that UWI has access to adequate funding to make regular investments in the renewal and expansion of capital infrastructure, plant and facilities needed to sustain highquality teaching and learning and research at the cutting edge. Strategic Aim 8: Strengthening Rationality Enhancing effectiveness through better integration of the institution Enhancing responsiveness and the impact of the University on regional development through effective dissemination activity and expanded communication links and dialogue with external stakeholders Developing links with tertiary level institutions and the private sector in order to build human capacity and foster development in the region Strategic Aim 9: Strengthening National Engagement Increasing UWI s impact on national policy making, analysis and evaluation within the national communities To identify and address undeserved educational and research needs in each contributing country Heightened awareness of UWI s contributions to national development and the dynamic relationship with regional character Strategic Aim 10: International Partnerships To strengthen and expand inter-institutional relationships to support regional development priorities through resource acquisition, capacity building and enhancement of the knowledgeinfrastructure COSTAAT Strategic Plan: Online documents (e.g. Transforming Lives) available at: a- centre/publications/transformin g-lives-volume-1-issue-1 Enhancing Organisational Effectiveness and Increasing Productivity Improving Institutional Visibility and Image Upgrading Physical Infrastructure Expansion of physical facilities with new campuses in Chaguanas and Sangre Grande scheduled for January 2012 Revised student governance structure Revised institutional governance structure to allow for greater participation by students, faculty and staff Commitment to systematically measuring institutional effectiveness through formal and Strengthening the Academic Enterprise Development and launch of new bachelor s degree programmes Curriculum reengineering to facilitate a comprehensive core curriculum to ensure the holistic development of students and workplaceready graduates Improving Student Success Broadening Access Increasing the number of on-

11 informal mechanisms and to use the findings to continuously improve programmes, policies, and services. line classes Increased full-time to parttime faculty ratio Greater investment in educational technologies (nursing simulation labs, upgrade of computer facilities, additional multimedia equipment, wireless access) Greater emphasis on co- and extra-curricular activities (career management, athletics programme, student development) NTA TVET Sector Studies Please also check labour reports available at: option=com_content&view=art icle&id=264&itemid=142 To develop, implement and maintain a National Technical and Vocational Education and Training (TVET) Plan that will create a workforce that is competent, certified, innovative, enterprising and entrepreneurial. To establish and maintain a National TVET System to harmonize, standardize, monitor and evaluate all formal and non-formal national training efforts in TVET Launch of student Plans for the implementation of the Caribbean Vocational Qualifications (CVQ) in all secondary schools by 2014 To continually assess and provide relevant information on TVET and workforce development, which includes the demand for and supply of human resources in collaboration with state and other agencies. To assist, support and encourage the development of training programmes designed to develop innovation, enterprise and entrepreneurship in the nation s human resources Providing career guidance To develop a structured and active system of communication and partnership with stakeholders to ensure continued relevance and value of the Agency's products and services. Collaborating with stakeholders to develop and administer a cohesive and coherent approach to implementing the National Life Skills Curriculum for Personal Development and Employability Enhancement Programme SBC ACTT Possible documents available at: Possible information from ACTT Newsletter available at: spx The institution s mission and purpose are appropriate for tertiary education and consistent with the policies and practices that guide its operations A summary of the economic priority sectors obtained from documents mentioned in the methodology section is shown in Table 2.

12 Sectors/Areas with highest forecast employment growth (International) Table 2: Priority Areas International and National Economically Significant Sectors Potentially Constrained by Skills Deficits Current Future Emerging Areas for Sustainable Economic Growth and Competitiveness in T&T* Renewable Energy Advanced Manufacturing Engineering construction Financial and Professional Services Computing Life Sciences Hotel and Catering Retailing Tourism and Hospitality Digital Hospitality Medical Personnel (doctors, nurses, biomedical) Light Manufacturing Agriculture Business Services Business Services (project managers, business managers) Health and Social Care Renewable Energy Advanced Manufacturing Natural Resource Management Agriculture Aquaculture/Fisheries Forestry Climate Change/Clean Technology Economics Infrastructure Planning Water and Sanitation Small and Medium Enterprise Development Disaster Prevention and Management Transport Safety Crime Prevention Health Management Health Services Maternal and Child Health Women and Gender Studies Disability Services Public Health Education and Training Human Resource Development Education Management Agriculture Agricultural Economics Food and Nutrition Biological Sciences Hospitality Information and Communication Technology Creative (fashion, film, entertainment, carnival) Light Manufacturing (chemicals and nonchemicals, downstream energy industries) *See Appendix 1 for classification according to key developmental issues in T&T 3. Macroeconomic and General Labour Market Context In this section of the study, a general overview of the T&T economy is presented along with comparisons among selected Caribbean countries in certain cases. For T&T to increase its

13 GDP Growth competitiveness the twin-island state must take the necessary steps to create an economy which will deliver and support the jobs of the future, as well as resolve issues related to productivity and sustainable development being experienced at present. 3.1 Growth and Employment Trends Over the last decade the T&Teconomy witnessed a period of strong economic growth before the onset of the global recession. Figure 1 shows historic and forecast data for T&Tand two other economies of the Caribbean: Barbados and Jamaica.All three economies witnessed a recession in 2009, and while all three countries started to show positive growth since , going into the future T&Tis expected to lag behind both Barbados and Jamaica. Figure 2: Historic and Forecast GDP Growth for Trinidad and Tobago, Jamaica and Barbados Barbados Jamaica Trinidad and Tobago Source: International Monetary Fund, World Economic Outlook Database, September 2011 Table 3 shows the GDP of T&T according to the percentage contribution of each industry for the period An examination of the start (2002) and end (2010) periods indicates that the main contributing sectors to GDP have remained as the Petroleum, the Construction and Quarrying, the Distribution and Restaurants, the Transport, Storage and Communications, and the Finance, Insurance and Real Estate industrial sectors. The Petroleum and the Construction and Quarrying sectors are the only two with a higher contribution in 2010, than Table 3: Gross Domestic Product of Trinidad and Tobago (% contribution): Industry Petroleum Industry Agriculture Export Agriculture Domestic Agriculture Sugar Food, Beverages and Tobacco Textile, Garments and Footwear Printing, Publishing etc Wood and Related Products Chemicals and Non-Metallic Minerals Assembly Type and Related Industries

14 Unemployment Rate Miscellaneous Manufacturing Electricity and Water Construction and Quarrying Distribution and Restaurants Hotels and Guest Houses Transport, Storage and Communication Finance, Insurance, Real Estate Education and Cultural Services Personal Services An examination of the unemployment rates indicates that, while the global recession caused a significant deterioration in employment in both Jamaica and Barbados, T&T had a slight increase in the unemployment rate to slightly above 5%,and this rate is not anticipated to rise further in the future (see Figure 3). Figure 3: Unemployment Rates Trinidad and Tobago, Jamaica and Barbados Source: International Monetary Fund, World Economic Outlook Database, September Productivity Figure 4 highlights productivity growth for T&Tduring the period The index shows clearly that, while fluctuating, growth in productivity has remained positiveduring the entire period. Figure 4: Productivity Growth: Barbados Jamaica Trinidad and Tobago Productivity Growth (%) Source: Central Statistical Office of Trinidad and Tobago

15 Productivity Index There are certain industrial sectors that drive productivity levels in T&T. These are shown in Figure 5, with the textiles, garments and footwear industrial sector having the highest productivity levels of the sectors shown during the period. Figure 5: Main Drivers of Productivity Levels according to Industrial Sector Drink and Tobacco Wood and Related Products Textiles, Garments and Footwear Assembly Type and Related Products Source: Central Statistical Office of Trinidad and Tobago 3.3 Sectoral Growth by Employment Figure 6 shows employment according to industrial sector for the years 1995 and 2010 to determine the key employment sectors in the T&Teconomy. The various industrial sectors are coded as follows: Industrial Sector Sugar (cultivation and manufacturing) Other Agriculture, forestry, hunting Petroleum and gas including production refining and service contractors Other mining and quarrying Other manufacturing (excluding sugar and oil) Electricity and water Construction Wholesale and retail trade, restaurants and hotels. Transportation and Communication Financing, insurance and real estate Community, Social and personal services CODE A B C D E F G H I J K Figure 6 shows that the employment structure is not well diversified and that of the eleven (11) sectors,only three (3) sectors employ most of the labour force in both time periods 60% in 1995 and 68% in 2010 as follows.in 1995, there were 431,400 individuals in employment and the major industries in terms of employment were the construction industry (10%),the wholesale and retail trade, restaurants and hotels (19%) and the community, social and personal services (31%). By 2010, total employment had increased by147,100 individuals to 578,500 but the major employer in terms industrial sectors remained the same;construction (16%), wholesale and retail trade, restaurants and hotels (19%) and community, social and personal services (33%).

16 % Change in employment Figure 6: Employment by Industry: 1995 and 2010 Number Employed (00) A B C D E F G H I J K Industrial Sectors (coded) Source: Central Statistical Office of Trinidad and Tobago Figure 7 shows growth in the number employed according to industrial sector for 2010 compared to As expected, due to the capital-intensive (and specialised) nature of the sectors, the Petroleum and Gas including production refining and service sector (16% increase) and the Electricity and Water (2% increase) sector had small increases in terms of employment. The highest increase in employment during the period was from the Construction sector which saw a 115% increase in the amount of persons employed in the sector. Other sectors with important growth increases in employment over the period were the Finance, Insurance and Real Estate and Business Services and Community (64%), Social and Personal Services (42%), Wholesale and Retail Trade, Restaurants and Hotels (36%), and Transport and Communications (25%) sectors. Of note is that the sectors associated with agriculture (Sugar cultivating and manufacturing and Other Agriculture, Forestry, Hunting) have employed considerably fewer individuals in Figure 7: Employment Growth by Industrial Sector: 1995 and A B C D E F G H I J K Source: Central Statistical Office of Trinidad and Tobago 3.4 Enterprise Growth Table 4 presents data on the number of enterprises according to industrial sector for the last decade. The sectors that show anincrease during the period (2010 compared to 2001) in the

17 number of establishments joining the industry were the Construction (118%), the Distribution (13%), the Finance, Insurance, Real Estate and Business Services (36%) and the Transport, Communication and Storage (27%) sectors. All of the other sectors show a decline in the number of establishments joining the sector, particularly towards the end of the decade. The largest decrease in the number of establishments joining the particular industrial sector throughout the period were from thetextiles, Garments, Footwear and Headwear (-30%), Miscellaneous Manufacturing (-26%), Assembly-type and Related Industries (-19%) and the Educational and Cultural Community Services (-15%) sectors. Table 4: Enterprise Growth According to Industrial Sector Industrial Sector Sugar Petroleum Industries Food Processors and Drink Textiles, Garments, Footwear and Headwear Printing, Publishing and Paper Converters Wood and Related Products Chemicals and Non- Metallic Minerals Assembly-type and Related Industries Miscellaneous Manufacturing Construction Distribution Hotels and Guesthouses Transportation, Communication and Storage Finance, Insurance, Real Estate and Business Services Educational and Cultural Community Services Personal Services TOTAL Source: Central Statistical Office of Trinidad and Tobago 3.5 Growing and Contracting Sectors To determine which of the sectors have shown the most growth and which have had slow or contracting growth during the last decade, three main metrics have been employed to undertake the analysis as follows: Output growth Employment growth

18 Enterprise growth. The fastest growingand contracting sectors across all three metrics are shown in Table 5. Table 5: Growing and Contracting Sectors Output Employment Establishments Fastest Growing Sectors Petroleum Community, Social and Personal services Petroleum Construction and Quarrying Construction and Quarrying Construction and Quarrying Distribution and Restaurants Distribution and Restaurants Distribution and Restaurants Transport, Storage and Communications Finance, Insurance and Real Estate Transport, Storage and Communications Finance, Insurance and Real Estate Transport, Storage and Communications Finance, Insurance and Real Estate Slowest Growing or Contracting Sectors Agriculture Agriculture Agriculture Miscellaneous Manufacturing Miscellaneous Manufacturing Miscellaneous Manufacturing Textiles, Garments, Footwear and Headwear Petroleum Textiles, Garments, Footwear and Headwear Wood and Related Products Electricity and Water Wood and Related Products Hotels and Guesthouses Other Mining and Quarrying Food Processors and Drink Source: Author s calculations As indicated in Table 5 the fastest growing sectors across all three metrics are: Construction and Quarrying Distribution and Restaurants Transport, Storage and Communications Finance, Insurance and Real Estate. The slowest growing or contracting sectors include the Agriculture and the Manufacturing sectors. This includes components of the manufacturing sector i.e. Textiles, Garments, Footwear and Headwear and Wood and Related Products, Food Processing and Drink and Hotels and Guesthouses. 3.6 Exports The capability of firms to compete internationally is accepted as essential to stimulating growth within an economy. The capacity of our firms to export is significant to the T&T

19 (000) TT Dollars (%) change in exports of Goods and Services economy since it provides these firms with access to larger markets and increased trade opportunities. Promoting export-led economic growth is one of the ways the economy can achieve sustainable growth and development.figure 8 illustrates that exports have fluctuated greatly in all three (3) countries shown in the figure during the period With respect to the forecast of the export of goods and services, the figure shows that for the entire period T&Texports are expected to contract and trail behind both other countries. Figure 8: Historic and Future Exports of Goods and Services for the period Trinidad and Tobago, Jamaica and Barbados Barbados Jamaica Trinidad and Tobago Source: International Monetary Fund, World Economic Outlook Database, September 2011 T&Thas three major exports: Mineral, Fuels and Lubricants; Chemicals and Manufactured Goods. Figure 9 shows the exports from some of the other main exporting sectors and includes Manufactured Goods as a comparator. The Machinery and Transport Equipment subsector, while fluctuating and lagging behind in certain periods, how shown a solid increase in exports since Figure 9: Exports from Selected Sectors for the period Food Manufactured Goods Beverage & Tobacco Machinery & Transp. Equip. Source: Central Statistical Office of Trinidad and Tobago 3.7 Foreign Direct Investment (FDI)

20 During the period , T&T had the highest percentage (of GDP) of FDI inflows among countries in Latin America and the Caribbean, and almost twice that of the country with the second highest FDI inflow Panama. The FDI flows tot&t havebeen primarily associated with the energy sector and in particular, natural gas. According to the fdiintelligence publication on Caribbean and Central American Countries of the Future (2011) (available at: Central-American-Countries-of-the-Future ?ct=true), T&Twas ranked as the third most attractive country (out of 31) in the region for foreign direct investment. However, while T&Tranked seventh for having the best FDI strategy and tenth for best infrastructure. It must be noted that the country did not place among the first ten for having the best human resources to attract foreign direct investment. Figure 10 shows that FDI to T&Twas at its highest during the latter part of the 1990s, and for the past few years FDI has seen a downturn, which is similar to the two other countries shown in the figure, i.e. Barbados and Jamaica. Of note is the fact that although both T&Tand Jamaica are rich in natural resources, Barbados has been attracting more FDI than both countries since Figure 10: Foreign Direct Investment as a % of GDP Trinidad and Tobago, Barbados and Jamaica: Source: Central Statistical Office of Trinidad and Tobago FDI_TT FDI_BRB FDI_JAM In order to create a diversified economy the sectors now being targeted for investment, both local and foreign direct investment, include information and communications technology, creative industries (fashion, film, carnival and animation), light manufacturing, transport and logistics (merchant marine specifically the creation of a modern dry dock industry) and clean technology. Other targeted sectors include printing and packaging, fish and fish processing, food and beverages, yachting and the service industry. 3.8 Key Characteristics of the Labour Force Age, Occupation and the Labour Force Table 6 presents data on the unemployment rate according to age-group in 5-year intervals for the last two decades. For the entire period the highest rates of unemployment have been

21 in the 15-19, and the age groups, while the employment rate for older people has largely been on the decline. Data for age profiles disaggregated according to industrial sectors is not available for T&T at present, but other studies show that employment according to different age-groups tends to be associated with different sectors (UKCES, 2010). Generally, those employed in the retail, hospitality and leisure tend to be relatively young (for example see, National Tourism Policy of Trinidad and Tobago, 2010, available at: while those employed in agriculture, transport and sectors requiring higher and further education have relatively older age profiles (UKCES, 2010). Years Table 6: Unemployment Rate According to Age Groups Age Group Source: Central Statistical Office of Trinidad and Tobago Table 7 presents the various occupational groups and the levels of unemployment prevailing in each group. Similar to information presented on the labour market in T&T, it can be seen that legislators and professionals, who would have at least tertiary level education, are rarely

22 unemployed and the literature is showing that these tend to be older employees.of note is that there are significant levels of unemployment in the craft, elementary, service and clerks occupational groups. Table 7: Unemployment According to Occupational Groups Year Legislators Professionals Technicians Clerks Service Agriculture Craft Plant Elementary p Source: Central Statistical Office of Trinidad and Tobago From the evidence provided it is clear that industrial sectors with an aging workforce would face a disproportionate level of replacement demand for labour as workers retire. This problem has the potential to be further compounded by the ageing population in T&T T&T has one of the lowest population growth rates in the region (-0.1%), and is predicted to be even lower as the country approaches 2020 (-0.2%). As evidence of T&T s aging population, Figures 11, 12 and 13 show population pyramids for the T&Tpopulation for three time periods: 1989, 2012 and 2020.During the 1980s and prior to that, the population structure of T&Tresembled a pyramid, which is typical of developing countries, with a broad base of younger persons and a small apex of older persons. Figure 11: Population Pyramid for Trinidad and Tobago Population Females Males Source: Data from United States Census Bureau International Program

23 One of the most pronounced global demographic trends of this century is population or demographic aging. While population aging is advancing rapidly in many developed countries, developing countries, whose fertility declines began relatively recently, are also experiencing rapid increases in their proportion of elderly people. At present, T&T s population pyramid has fundamentally lost its pyramidal shape (see Fig. 12) and its median population age is now closer to 30. With respect to the labour market, one of the impacts of an aging population is the vacancies that are created in the various sectors primarily populated by older persons. Figure 12: Population Pyramid for Trinidad and Tobago Population Females Males Source: Data from United States Census Bureau International Program Figure 13 illustrates the predicted population pyramid for the T&Tpopulation for It illustrates that the median age is now closer to 40 and by 2020 most of the baby-boomers are likely to be retired or close to retirement. The base of this pyramid is much reduced, while the apex is vanishing.the issue of T&T s aging population is one that has to be considered in the planning process that informs the economic priority areas in T&T so as to ensure replacement demand in the labour market. Figure 13: Population Pyramid for Trinidad and Tobago Females Population Males Source: Data from United States Census Bureau International Program

24 Unemployed (Hundreds) Education and the Labour Force Figure 14 presents data on the historical and present labour market situation in T&T as it relates to education of the labour force and unemployment. The figure shows that during the entire period ( ) persons with secondary level education make up most of the unemployed labour force. Individuals with university level education are more quickly absorbed in the labour force than individuals with any other level of qualifications. Figure 14: Unemployed Individuals According to Level of Education Trinidad and Tobago Primary Secondary University Source: Central Statistical Office of Trinidad and Tobago A further disaggregation of unemployed persons with secondary level education indicates that within this category, unemployment levels were generally on the decline for individuals with some form of further training in addition to their secondary level education. 4. Sectoral Analysis and Employment Prospects In this section of the study a sectoral analysis is undertaken to determine the education, type of skills and categories of staff, which are needed diversify the economy and put T&T on the path of sustainable development. The T&T government allocates a relatively large proportion of its budget to expenditure on education. Figure 15 provides information on government expenditure on education, with national security as a comparator, for the last nine (9) years for seven (7) out of the nine (9) years expenditure allocated to education has been higher than that of national security. Figure 15: Expenditure on Education and National Security ,000 2,000 3,000 4,000 5,000 6,000 Millions of TT$ National Security Education

25 Source: Central Statistical Office of Trinidad and Tobago A high proportion of the education budget goes towards funding the GATE program (Table 8). While different versions of funding for tertiary education were undertaken by various governments, the GATE programme in its present form was initiated in 2006 and was modified to cover the entire cost of undergraduate tuition for tertiary education programmes and up to 50% post-graduate tuition expenses. There are three (3) main aims of the GATE programme ( To make tertiary education affordable to all, so that no citizen of T&T will be denied tertiary education because of their inability to pay. To widen access to tertiary education that will support economic development and promote social equity. To build and strengthen a national quality tertiary education sector through both public and private tertiary level institutions. Table 8: Funding the GATE Programme Financial Year Cost of GATE Programme (TT$ Million) Source: Ministry of Finance Budget Statement (Trinidad and Tobago) 2010 With the large amount of government s expenditure going towards the education sector it is essential that funded programmes, such as GATE, be constitutedefficiently andtargeted towards educational areas that are of priority to T&T. To determine these priority education areas, a general examination of the landscape would be undertaken using micro level data obtained from a survey of firms operating in T&T, after which sectoral reviews will be undertaken. The World Bank undertook a survey of firms operating in T&T in 2010, i.e. The World Bank Enterprise Survey, to examine the many issues that have the potential to affect operational efficiency of the firm in T&T. While the survey yielded very important information regarding firms operating in T&T,it also provided an overview of some of the issues associated with the education and educational level of employees in firms operating in T&T. One of the general questions on education of the labour force yielded results which indicate that most employers found that an inadequately educated workforce was the major obstacle they faced in operating in T&T. Figure 16 provides results from anothersurvey question regarding the skills (social and technical) firms discovered most difficult to acquirein an employee when filling vacancies at

26 their establishments. Fifty percent (50%) of the firms found it difficult to obtain technical skills (foreign language, problem-solving, administrative and operational skills), while 48% found that potential employees lacked social skills (communication, customer handling and teamwork skills). Figure 16: Types of Skills Lacking in the Trinidad and Tobago Labour Force Don't Know Technical Skills Social Skills Source: Data from the World Bank Enterprise Survey in T&T (2010) The firms surveyed were also asked which of the groups (Professional and Managers or Technicians) employed by their organization required the most amount of training. The results shown in Figure 17 indicates that over 50% of the employers thought that both categories of staff required training, while 32% specified that their technicians required more training and 13% suggested that their Professional staff and Managers needed more training. Figure 17: Category of Staff Most in Need of Training Don't Know Both Categories Technicians Professionals and Managers Source: Data from the World Bank Enterprise Survey in T&T (2010) It is evident from the information emerging of the World Bank Enterprise Survey (2010), that there is a growing need for both technical and social skills (known as the softer skills) for good business performance.

27 4.1 Projected Employment Change by Sector Table 9 presents the results of projections of employment by industry group for the period 2012 to As expected there are significant sectoral variations in the amount of persons projected to be employed in the various sectors by Table 9: Projections of Employment by Industry Group Absolute Levels and changes ( 00s) Industrial Sector Levels Changes Agriculture Petroleum and gas including production refining and service contractors Other manufacturing (excluding sugar and oil) Electricity and water Construction Wholesale and retail trade, restaurants and hotels Transportation and Communication Financing, insurance and real estate Community, Social and personal services Source: Author s Projections Sectors where employment is expected to fall by at least 3,800 individuals Sectors where employment is expected to increase by at least 13,300 individuals Overall, expansion of employment is expected in 4 industrial groups, while contraction is expected in 5 industrial groups. The major growth industries in terms of jobs are: Community, Social and Personal Services Wholesale and Retail Trade, Restaurants and Hotels Financing, Insurance and Real Estate These growth industries already account for a large share of employment in T&T and of note is that they represent a mix of relatively high and relatively low skill sectors Emerging Sectors: New Industries, New Jobs The Government of Trinidad and Tobago has expressed a commitment to identifying and developing a number of key sectors in the economy. These sectors shall require a certain quality and quantity of skills and education. This section of the report draws together the major sources of evidence on current and likely future sectors of economic and jobs growth together with indicators of the supply of skills that these sectors need for future growth. Sector specific analyses shall be undertakenfor each of thesesectors,which were determined as important to the developmental needs of T&T, as follows:

28 Priority Sectors Digital Export Agriculture Medical and Health Care Tourism Light Manufacturing chemicals and non-chemicals; downstream energy products Emerging Priority Sectors Advanced Manufacturing food processing; machinery and transport equipment Renewables (solar energy, biofuel) Creative These eight sectors are viewed as being strategically important to T&T in terms of performance and employment and are also deemed to be significant as enablers within the wider economy, for example in creating green jobs and moving to a low-carbon economy. Some of the sectors are also classed as emerging since they are not directly aligned to existing industry classifications. While the size, value and maturity of the sectors vary, it is clear that there is a degree of interdependence among them with some of them featuring in the supply chain for other sectors or forming parts of larger industrial sectors. The interdependence of these sectors, and their interdependence with other sectors in the wider economy indicates that any economic growth in these sectors will resonate throughout the economy, making these sectors catalysts for growth. These skill needs of these eight sectors will now be examined in further detail Digital The digital economy comprises of two general areas: technology and content activities. Technology provides the infrastructure and platforms through which content is delivered. Content encompasses creative media (film, commercials, music, design etc). Apart from these core areas, the role of ICT in the non-it sectors isconsidered even more important since ICT may be key to T&Ts future competitiveness and prosperity. According to CARICOM s Draft Regional Information and Communication Technology (ICT) for Development Strategy (2010), three countries in the Caribbean have already begun to realize development gains from ICT: T&T, Jamaica and Barbados. Within the Caribbean region, T&Tstill has some way to go before it reaches the rank of Barbados, which is the highest ranked Caribbean country in the Digital Opportunity Index (DOI) (Table 10). Table 10: Digital Opportunity Index: Selected Caribbean Countries and their Position in the World (2008) Digital DOI Economy Rank Opportunity Infrastructure Use Score Korea

29 Singapore Barbados Bahamas Antigua & Barbuda St. Kitts & Nevis Jamaica Dominica Malaysia Trinidad and Tobago Source: Adapted from CARICOM s Draft Regional Information and Communication Technology (ICT) for Development Strategy (2010) Apart from the core ICT industries, there is considerable opportunity for more firms to adopt and exploit ICT. According to CARICOM (2010, p. 79), ICT can potentially benefit various sectors and areas in countries in the region as follows: Green ICT Any e-commerce or related activities which support sectors in which there is comparative country advantage, such as tourism and culture, sports (all countries), bauxite (Jamaica), petroleum services, steel, shipping (Trinidad), gaming (Antigua and Barbuda), and general services such as finance, heath and training Financial Services linked with services to provide consumer support to access financial resources Health Services - linked with other sectors like tourism, wellness and agriculture Consumer demand-driven technology and software applications consumer usage has begun to surpass business usage and this trend is expected to continue. Next generation technology that is more interactive and user-friendly, e.g. data applications with virtualization, is now being developed internationally Software and services that put the customer in control and support Social networking, e.g. Facebook, You Tube, Twitter, etc. Connected devices, e.g. mobile phones Solutions to industry concerns security, privacy, customizability, visibility and control, data accessibility, global reach, ease of provisioning, business agility, deployability and manageability. Trinidad and Tobago has a national ICT plan and national connectivity agenda which has some key objectives ( Provide all citizens with affordable Internet access Focus on the development of children, and adult skills to ensure a sustainable solution and a vibrant future Promote citizen trust, access, and interaction through good governance Maximise the potential within all citizens, and accelerate innovation, to develop a knowledge-based society.

30 Consistent with the information presented in Table 9, the ICT sector in T&Tis developing and has a small number of skilled IT workers (approximately 3000 in 2003 information available at: More recent information from firms (World Bank Enterprise Survey 2010) functioning in T&T indicates that ICT is becoming more important at the operational level of firms. Figure 18 presents the response of firms to the question of whether the establishment used to communicate with clients or suppliers a little over 87% of the firms indicate that was used. Figure 18: Use of to Communicate with Clients and Suppliers No 13% Yes 87% Source: Data from World Bank Enterprise Survey, 2010 Increasingly firms are recognizing the importance of employing websites for advertising and sales. Firms operating in T&T still have some way to go in making use of the available technology. AsFigure 19 shows,most firms do not have their own websites (over 64%). Additionally, the survey data revealed that establishments use the internet to make purchases (83.83%), deliver services to clients (76.39%) and to do research/develop ideas on new products and services (87.21%) Figure 19: Establishments Use of Websites No 64% Yes 36% Source: Data from World Bank Enterprise Survey, 2010 A broad disaggregation of the demand for ICT skills according to disciplines can be done as follows: Computing (including computing courses with a substantial business or audiovisual/multimedia component to them) Electronic engineering (including computer engineering and telecommunications engineering).