Ha Tinh Vocational College staff and trainees in Vietnam

Economic development and TVET

Sustainable economic development can ensure prosperity for broad segments of society and contribute to a higher life expectancy, declining birth rates and in some places to increasing immigration. At the interface between population dynamics and sustainable economic development, the focus should be on young people and their future.

Technical and vocational education and training (TVET), as well as productive and decent employment, are key prerequisites for enabling people of working age to earn an income and secure a livelihood. Particularly in societies with a young population, TVET is a fundamental building block of economic and social development.

Economic development can affect birth and death rates and migration patterns

With increasing prosperity and rising per capita income, as a rule the birth rate falls, while life expectancy rises. Sustainable economic development thus contributes in the long term to the demographic transition and ultimately to the ageing of society.

Good opportunities in TVET as well as a healthy supply of jobs on the labour market can also attract young, highly motivated individuals from other countries, thereby serving as a pull factor for immigration. These tendencies can be observed in countries such as Germany, where the economy has been flourishing for years, unemployment and population numbers are declining and demand for skilled workers is in some cases outstripping the available labour pool. In 2017 about 179,000 apprenticeships remained unfilled in Germany. To ensure that they do not experience a shortage of skilled workers in the medium and long term, such countries can turn to immigrants or young people who have not yet been trained and offer them attractive educational or employment opportunities.

Developing countries need to unlock the productive potential of their young people of working age

With a high proportion of children and young people, it is particularly the world’s poorest countries that have a rapidly growing number of potential workers. In the course of the demographic transition, this favourable age structure can prove useful for a growing economy. However, the extent to which it can actually be converted into a demographic dividend and benefit the national economy depends on whether the young people of working age can develop their productive potential. To unlock it, a sufficient number of future-oriented training structures, educational programmes and employment opportunities are necessary. In Egypt, for instance, whose population is growing by 2% or approximately 1.5 to 2 million people annually, it is estimated that currently up to two million jobs need to be created each year if young people are to be offered adequate prospects in their country (Egypt Ministry of Local Development, 2017).

In many countries, the number of newly generated jobs is not proportionate to young people’s growing demand for them. This results in many young people being un- or underemployed, taking up precarious work, or working under inhumane conditions. It is particularly difficult for them to access financial products such as start-up loans to pursue potential business ideas and generate their own income.

Economic growth can spur resource consumption and climate change

Reducing population growth does not necessarily mean that fewer resources will be used. The determining factor here is above all a society’s production and consumer behaviour – especially its increasing transport mobility. Slower population growth is often associated with economic growth and a higher standard of living, both of which result in an increased use of resources. Currently a small percentage of the world’s population consumes a disproportionately large share of global resources.

CO2 emissions are starting to accelerate in many developing countries and emerging economies, with their rapidly expanding middle class and a large proportion of young people. As productive workers and at the same time consumers, the latter are galvanising the economy. The downside of the demographic dividend is a higher demand for resources.

For more information on the interlinkages of economic development and TVET with population dynamics, please refer to Chapter 4.4 of the handbook.

How can economic development and TVET factor in population dynamics?

To address these challenges and opportunities, stakeholders can:

  • Adapt training infrastructure, educational measures and employment opportunities to growing demand in an age- and gender-appropriate manner.
  • Provide special support for young women’s access to vocational training opportunities in order to promote their economic participation and self-reliance. 
  • Create jobs that pay a sufficient wage to enable workers to become consumers and contribute to the demographic dividend. 
  • Foster an enabling environment for economic and employment policies, e.g. through private sector development mechanisms, access to financial services and measures to integrate the unemployed. 
  • Identify employment potentials, e.g. through labour market analyses of migrant worker trends and socio-demographic employment patterns, to boost economic growth, productivity and tax revenue.
  • Shape the demographic dividend so that the concept of sustainability is an integral component of the economic upswing, for example through support for ecologically responsible (green) growth.

Resources

© GIZ/Dirk Ostermeier

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