The Need for Human Capital Development

The strength of a nation is measured by and depends even more on the quality, rather than the number of its people. The potential capacity and capability of people are nation’s most precious possessions. Therefore, it is imperative to recognize the true value of human resources with regards to driving the development of an economy and the existence of a nation. It is bizarre that while Ethiopia is engaged in fast paced economic development, the role of human capital development (HCD) has been undermined. The quality of education has gone downhill. We are producing not only uneducated youth but mis-educated ones. I experience this almost every day by virtue of my job. Prime Minister Abiy Ahmed (PhD) has also mentioned the dire situation of our education system in one of his speeches, as his predecessor Hailemariam Desalegn does.

You might argue that the country has pushed past its limits to ensure the provision of basic education and to expand higher education across the spectrum. While it is important to celebrate these achievements, it is crucial take into account whether it was done in accordance with the country’s strategic human capital development needs.

The country has not done enough to continuously revise and adjust its human capital development strategy to make fit the pecking order. In fact, Ethiopia ranked 173 out of 189 countries and territories in human development index, according to the United Nations Development Programme. This has undermined the economic trajectory that the country achieved.

Thus, the purpose of my article is not to criticize the government for failing to address the HCD issues of the country, but rather to delve into what Ethiopia can learn from countries like Singapore to help leverage its human resources to ensure sustainable economic development.

Before going in to details I would like to answer why Ethiopia should take lesson from Singapore? Singapore is a fascinating case study for HCD. A tiny country with virtually no natural resources, the country has become one of the most developed countries in Asia primarily because of its strong emphasis on developing human resources and continuously making significant investments in human capital. The country keeps tweaking its HCD strategies in conjunction with other national strategic economic policies.

According to the World Economic Forum, Singapore has the most developed human capital in Asia. The report revealed that the country has been able to demonstrate significant strengths in the quality of its education system and staff training. Surprisingly, most people work in high – skilled and expertise – based occupations within a complex and diversified economy. That is why aerospace manufacturers such as Rolls – Royce headed to Singapore, as it offers among other things, a supply of qualified workers. About 90Pct of Rolls – Royce’s employees, for example, are local.

What did Singapore do differently?
In preparing its workforce, Singapore enables it to become agile by providing skills and knowledge not only for the present but also for the future. Fundamentally, Singapore stays ahead of the curve with regards to knowledge capital by enhancing the employability and competitiveness of employees and job seekers, thereby building a workforce that meets the changing needs of the economy.

Specifically, it sets up a national policy and HCD infrastructure that allows a tripartite approach; based on cooperation among employers, unions, government, and a multidepartment approach involving all relevant government agencies. This tripartite relationship ensures there is agreement over strategies and necessary steps required for national HCD strategies. An example is the Manpower 21 Report, launched on June 4, 1998, which was produced by a partnership among the government ministry, unions, and more than 100 participants from the private sector.

Another important tripartite institution is the Skills Development Fund (SDF), founded by the government and guided by a tripartite council. The fund is both a mechanism for financing employee training and motivating employers to upgrade their employees. The SDF was created because employers in Singapore were not normally inclined to spend money on training unless there was a scheme to incentivize them. All employers contribute one percent of the total wages of employees who earn Singapore dollars (SD) 1,500 or less (revised from SD1,000) a month or USD2 per employee (whichever is greater) a month to the SDF.

What’s more, Singapore’s education system is holistically linked to its HCD strategies. It is structured as ameritocracy and has a series of filters that stream each cohort of students into the relevant vocations and institutions. Above all, Singapore has an HCD board which is chaired by the prime minister. This board is responsible to set the agenda about the future of work and to look at how the country remains agile with regards to HCD.

What are the lessons?
Ethiopia needs leaders who live the mind set of ‘What Next’. I believe that the recent change in political leadership is a big opportunity for stakeholders to think about a bold, long – term vision about the role of HCD can play in the country’s sustainable economic development. To this end, it is imperative to put together a guiding coalition that includes the private sector to enable this vision to keep moving forward, and avoid a change of direction when there is a change in leadership.

The other lesson Ethiopia should take in to account is the alignment of the HCD strategy to economic development goals. There is a strong need to link education and economic development, to keep investment in HCD a central priority, and to help make education policies highly pragmatic. The Ethiopian education system seems cast in stone. Thus, having a forward – looking approach enables the country to keep education dynamic and agile. While it is not an easy task, it is crucial to bring together economic and policy makers, human capital advisors, business and education leaders to continually unpack changes in the economic landscape and how strategic human capital development creates value.

It is also imperative to build on what has been working so far and draw lessons from other economies. This, in turn, will help the country set the bar higher for its HCD, moving up the value chain and fostering a culture in which it never stands still. This international benchmarking recognizes the rapidity of change around the world and has the capacity and inclination to learn and adapt to ensure a global outlook.

In preparing our workforce for different growth trajectories, the government needs to establish a human capital development board with the aim of shaping HCD policies tailored to each phase of economic development , to provide strategic direction towards sharpening the four dimensions of human capital : knowledge capital , imagination capital , emotional capital and social capital. This board should also be vested up the responsibility of closing links between policy implementers, researchers and educators.

Before engaging in to all these matters, however, the government needs to demonstrate an unfailing commitment to equity and meritocracy. Meritocracy is the cornerstone for the HCD endeavour to bear fruit.

In conclusion, it is high time that we learn lessons from countries like Singapore, and for Ethiopia to make human capital development central to the government’s strategic direction. At the same time we need to build a culture of continuous improvement that benchmarks educational practices against the best in the world. Indeed, we need people at all levels that are capable of turning this in to a reality.

7th Year • Nov.16 – Dec.15 2018 • No. 68


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