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LABOUR MARKET REFORM COMMISSION Technology, Innovation & Productivity Committee Discussion Paper & Priority Recommendations

Commissioner Silburn Clarke FRICS, DFJCS Chairman December 2nd 2015

Labour Market Reform Commission Commissioners Chairman,

Dr Marshall Hall

Vice Chairman,

Mr. Silburn Clarke Chair, Technology Innovation and Productivity Committee

National Coordinator, Mr. Lloyd Goodleigh, Chair, Labour Policy and Legislation Committee Dr Wayne Wesley, Dr Heather Rickets, Mr. Wayne Jones,

Chair, Education and Training Committee Chair, Social Protection Committee Chair, Industrial Relations Committee

Ms. Brenda Cuthbert Dr. Michael Witter Sen. Kavan Gayle Prof Gossett Oliver Ms. Yvette Sutherland-Reid

Mr. Dwayne Gutzmer Mr. Easton Williams Ms. Janet Morrison Mr. Errol Miller

Mr. Robert Gregory Mr. Danny Roberts Dr. Noel Cowell Mr. Granville Valentine

Technology, Innovation and Productivity Committee Chair: Commissioner Silburn Clarke Dr Vanesa Tennant, Dr. Marina Ramkissoon, Mr. Mervyn Eyre, Dr. Andrea Barrett, Dr. Andre Jones, Ms. Sonia Jackson,

Working Groups Chair Labour Market Information System Chair, Human Factors and the Workspace Chair, Public Sector Efficiency Chair, National Systems of Innovation Chair, Small & Medium Enterprises Chair, Cross-cutting Issues

Commissioner Prof. Gossett Oliver Commissioner Robert Gregory Commissioner Dwayne Gutzmer Prof. Ishenkumba Kahwa Prof. Neville Duncan Dr Charles Douglas Dr Kavian Cooke Mr. Rudolph Thomas Ms. Tashana Briscoe

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LABOUR MARKET REFORM COMMISSION Technology, Innovation & Productivity Committee Discussion Paper & Priority Recommendations December 2nd 2015 Commissioner Silburn Clarke, Chair Introduction

This initial Discussion Paper of the Technology Innovation and Productivity Committee (TIPC) summarises the first six months of deliberations by this Committee of the Labour Market Reform Commission. The paper presents the top three priority recommendations from the TIPC's five Working Groups viz; Labour Market Information System; Public Sector Efficiency; National Systems of Innovation; Small & Medium Enterprises; and Human Factors in the Workplace. The purpose of the Discussion Paper is to serve as a vehicle for consultations, debate and fine-tuning of these initial recommendations of the TIPC.

TIP Committee Membership

The TIP Committee boasts a diverse membership comprising stakeholders from trade unions, employers, academia, international development partners and the public service including the Ministry of Labour and Social Security and other Government entities.

Mandate     

Recommend programmes and services for increasing international competitiveness of small and medium enterprises (SMEs); Draft policies and programmes intended to strengthen and accelerate Jamaica’s capacity in technology generation, adoption and transfer; Recommend policies to improve public sector efficiency and performance in support of enhancing the labour market and consequently, economic growth and development; Enhance Jamaica’s labour market information systems; Strengthen and modernize the Jamaica Productivity Centre (JPC) in order to support innovation and efficiency transformations in both the private and public sectors;

Areas of focus: 1. 2. 3. 4.

Quality of the workforce Quality and excellence of business organisations (private and public) International competitiveness of firms Technology generation, adoption and transfer

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5. The role of the Jamaica Productivity Centre 6. Labour Market Information Systems / National Employment Portals / National Employment Service

Achievements to date:    

Comprehensive desk research on quantitative and qualitative data and reports Wide stakeholder consultations Organisation of five Working Groups on SME; Labour Market Information; Human Factors in the Workplace; National Systems of Innovation; Public Sector Efficiency Completion of Discussion Paper on Technology Innovation and Productivity (Dec 2015)

Summarised Draft Priority Recommendations

1. The development of a clear, unambiguous, sustainable and equitable method to align compensation of employees with productivity of firms 2. Strengthen the enabling environment for the encouragement of indigenous innovators through, inter alia, modernising the Patent Act 3. Encourage the increase of business innovators in the economy by supporting pro-active solutions for the high-growth, export oriented firms eg Innovation Fund 4. Recommendation to boost productivity through a change in culture among public sector workers. This may include the time-limited performance contracts for all heads of Public Sector Bodies, renewal based on their ability to increase agility 5. Encourage widespread Pension participation in order to significantly grow the pool of longterm savings within the economy for supporting investments in domestic firms and provide employers with additional benefits for attracting and retaining talent 6. Develop a Pension Asset Allocation class for supporting equity participation in SME’s with a minor percentage from local Pension Plan; recommended 1% maximum. 7. Include “human factor / psychosocial” variables in data collection procedures in surveys at the national level in a regular and systematic manner in order to make determinations as to the implications of such variables on productivity and innovation of firms and employees 8. Develop collaborative skills within and across organisations in an effort to counteract tendency to build barriers and silos 9. Amplify the orientation of the Jamaica Productivity Centre to include collection and psychosocio-cultural analysis of human factors that affect productivity and innovation 10. Promote the engagement of Work Psychologists and Occupational Psychologists to support the well-being of organisation’s members and so improve productivity 11. Implement fiscal and monetary policies to create more research and development activities supporting innovation from the private sectors 12. Radically reform the curriculum of schools in order to significantly improve STEM performance so as to develop downstream robust STI orientations and mindsets 13. Engage stakeholders who are developers of infrastructure to promote innovation activities within the economy 14. Recommendation to develop macro-economic policies aimed at reducing the informality and un-registration in the economy 15. The establishment of an efficient labour market system through a fully functioning labour market information system should involve a well-coordinated approach to the collection, analysing and publishing of labour market information 16. Revisit the role of the Labour Market Information Technical Advisory Committee (LMITAC) 17. Increase the use of technology to foster data sharing and collaboration; and analysis of data across stakeholder institutions

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18. The development of a national policy to have all persons enrolled in the secondary, tertiary and vocational institutions registered to the labour market information system. Such a mandate would facilitate greater knowledge among students regarding career options, demanded skills and present and projected growth areas in the economy. 19. Mandate all public sector entities to post vacancies and search for jobs via the labour market information system. Vacancies to be advertised in various forms of media, prior to applications for work permits 20. Implement Government of Jamaica information technology governance framework. Governance framework to speak to Government leaders being trained in effective governance of information technology and technology-based innovation as an essential leadership capability 21. Deliver shared information technology services through eGovJa across Government Ministries, Departments and Agencies 22. Pro-actively promote a culture of partnership within MDA’s and between MDA’s and the private sector. Accelerate workflow technologies between government agencies. Accelerate PPP’s with private sector

National Context: 1. Existential threat to the Jamaican society, economy, way of life and civilization

Fig 1: Annual GDP rates and Period for doubling GDP

a. Observation: i.

The average annual GDP growth rate for the economy has been historically below 1%; 40year average at 0.8% (WB). This performance has persisted over several periods (PIOJ: see box insert) Jamaica Historical GDP Performance These historic rates would require 5 generations to double i. Past four decades - 0.8% national GDP ii. 1990- 2014 period - 0.88%

ii.

b. Conclusion 1.

iii. iv. v.

2000- 2014 2014 FY 2015 (Apr – Jun)

- 0.59% - 0.5% - 0.6%

The existential threat to the Jamaican society, economy, way of life and civilization is our failure to successfully and sustainably grow our GDP and so

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increase national prosperity for our citizens and subsequently equitably distribute prosperity gains throughout the society Without the growing and preservation of national wealth, the quality of life is challenged Jamaica will not achieve objective of becoming the place of choice to live, have families and do business in 2030 at these historic rates of GDP growth. In the strategy to achieve a significant take-off in GDP growth performance, the labour market should not be a retardant, a constraint nor a braking factor.

2. 3. 4.

c. Way Forward Actions / Options: i. ii. iii. iv. v.

Craft and articulate one national long-term strategy to significantly grow prosperity: ensure that actions are coherent with the national growth imperative Recalibrate the implementation approach to Vision 2030 Quickly reform or remove any entity that is not aligned with national thrust Ensure that all national stakeholders are aligned and onboard with one long term strategy (government, business, workers/employees, academia, youth) Focused policy management and direction to assure that all aspects of government are aligned with the National Growth Agenda.

2. Firms are essential for successfully and sustainably growing GDP and so increasing national prosperity a. Observation i. ii.

iii.

iv.

v.

vi. vii.

Governments are to GDP as firms are to markets While GDP growth must be facilitated by the government, it is globally competitive firms operating successfully within global marketplaces that will be able to sustainably harvest margin revenues from global consumers Majority of business leaders tend to be domestic-market oriented rather than export-oriented Jamaica has been categorized as a Stage 2 economy by the World Economic Forum (WEF) in their 2015 Global Competitiveness Report (see box insert) Attributes of Stage 2 economies include increasing firm competitiveness driven by education and training as well as rising wage increases based on increasing efficiencies / productivity The quality of the national talent pool directly impacts firm’s ability to adapt science to production processes and technologies, and so innovate, be productive and ultimately competitive Efficient firms optimize GDP output within existing Production Possibility Frontier (PPF) but innovating firms grows and expands the PPF to new levels thereby creating new GDP spaces

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viii. ix. x. xi.

State of cluster development is low (93/140: WEF 2015) Production process sophistication is low (87/140, WEF 2015) Patenting is low (82/140, WEF 2015) Firm spending on R&D is low (74/140, WEF 2015)

b. Way Forward Actions / Options: i. ii.

A major shift in mindset, orientation and culture towards innovation and global market demands is urgently needed in the business sector Encourage and incentivize firms that are export-oriented

Stage I Haiti Nicaragua

Transition I to II Honduras

Stage II Jamaica Dom Rep Guyana

Transition II to III Costa Rica Barbados Panama

RESOURCE-BASED ECONOMIES

EFFICIENCY-BASED ECONOMIES

Countries compete based on their factor endowments: primarily unskilled labour and natural resources. Compete on the basis of price and sell basic products or commodities, with their low productivity reflected in low wages.

Countries begin to develop more efficient production processes and increase product quality. Competitiveness is increasingly driven by higher education and training. Wages have risen and they cannot increase prices

Stage III Trinidad

INNOVATION ECONOMIES

Companies must compete by producing new and different goods using the most sophisticated production processes and through innovation. Wages will have risen by so much that they are only able to sustain those higher wages and the associated standard of living by higher value

3. State of our national talent pool (academia / knowledge creators) a. Observations i. ii. iii. iv. v. vi. vii.

The higher the incidence of Knowledge Economy factors within an economy is the higher the economic performance; with a correlation of 0.84 (WEF 2008, see box insert) The availability of scientists and engineers in the Jamaican economy is low (99/140, WEF 2015) The ratio of tertiary level graduates in the labour force is low (refer sec 4B) Research and development in private and public sectors are low (WEF) The ability for the society as a whole to tap into the creativity and inventiveness of the broad population is weak as the nation’s Patent Act dates from1857 Government acquisition of advanced technology products is low (107/140, WEF 2015) There is a serious mis-match between industry demands and tertiary output as the unemployment among Caribbean region’s young tertiary graduates is very high with (ECLAC 2015)

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b. Way Forward Actions / Options: 1. 2.

Modernise the Patents Act urgently A process of on-going re-examination of the output of tertiary institutions to assure alignment with industry needs is urgently needed.

4. State of our national talent pool (employees) a. Observations 1. 2. 3. 4. 5.

68% of our employed labour force has no certification (746k of 1.094mill: STATIN 2012) 63% of our employed labour force has no training (691k of 1.094mill: STATIN 2012) Despite a budget of J$26billion (2012/2013), each year an estimated 30,000 kids of secondary school-age are added to the pool of non-certified talent. (MOE, 2012/13) Quality of math and science education is low (96/140, WEF GCR 2015) Primary, secondary and tertiary education enrollment are deemed low in global comparisons (WEF 82/140 , 93/140 and 79/140 respectively, WEF 2015)

70% uncertified

70% certified

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b. Way Forward Actions / Options: i. ii. iii. iv. v.

vi.

Conduct demographic study to determine the detailed profile of the 70% uncertified A shift in model, ie a flipping of the script, to reduce non-certification to 30% would have a profound ripple effect is all areas of society and economy Get it right the first time, every time; Students graduating from five years of secondary education and training must be empowered with academic and/or technical/vocational and/or creative (arts/sports) skills / certification Avoid duplication and triplication of government remedial spending on same cohort of youngsters Training of youth should emphasise critical thinking and adaptability as 21st century futures are highly dynamic. Jobs for next 5 , 10 years are not defined today Implications for Education and Training Committee

5. State of our macro-economic framework / enabling environment a. Observations i.

Macro-economic stabilisation of economy is encouraging (lowered inflation rate, inflation targeting, dynamic forex rate tied to PPP competitiveness. ii. Consequential lowering of interest rate for borrowing for SME’s is slowed due to high stickiness in financial institutions iii. Pension funds are off-limits for funding domestic entrepreneurs except via blue chip corporate bonds and stock market equity participation

b. Way Forward Actions / Options: i. ii.

Financial intermediation is in need of reform. is archaic and do not adequately support entrepreneurs and entrepreneurial activity (Contrast with M-Pesa in Kenya) Unlocking and enabling asset small allocation from $300billion pension funds for the Jamaican productive sector would release funding to SME’s

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iii. Lending practices of commercial banking sector needs reform to facilitate more competitive loan pricing for SME’s. iv. Competitiveness signaling provided by devaluation must be complemented with other incentives for SME exporters (Innovation Fund, R&D Investment Write-off, Special Interest rates for Exporters) v. Threshold for disengaging CEO’s should be more dynamic (OECD 2013 Assessment of 2012 LM Reform in Spain: Three quarters of weak financial performance is 2012 threshold for fair dismissal of CEO)

6. Status of the Labour Market

a. Observations: 1. 2. 3. 4.

In a recent assessment of the country’s Labour Market Efficiency by the WEF GCR the most inefficient factor was adjudged to be the mis-alignment of pay with productivity. This factor scored a very low global ranking of 111 out of 140 countries (WEF 2015) Hiring and firing practices are rated low (80/140, WEF 2015) Labour-management cooperation are also rated low with a ranking of 75when compared to other economies (WEF 2015) National capacity for the retention and attraction of talent enjoyed ‘very low’ and ‘low’ ratings respectively.

b. Way Forward Actions / Options: 1. 2.

Expand the role of the JPC in the determination of firm-level productivity assessments in order to support compensation and productivity alignment Human Factors Working Group to examine psychosocial factors operating within firms

7. Changing Population Demographics a. Observations: i. Fertility rates have been declining and will continue to decline to 2030 (STATIN)

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ii. Population growth rates are expected to decline to –0.1% in 2030 from 0.36% in 2011; to record population shrinkage in 2030 iii. Percentage of population over 65 years is projected to reach 11% in 2030 from 8.1% in 2011 and 4.3% in 1969. iv. While the 15-64 years group is expected to remain stable at 65.9% (in 2011) and 66% (in 2030). However, the 15-29yrs sub-group is projected to shrink by 2030 (STATIN, see box insert), thereby increasing the average age of the 15-64 years age cohort.

b. Way Forward Actions / Options: i. ii.

Projected shrinkage among population of digital natives and millennials and implications for workforce creativity, dynamism, adaptability, energy, flexibility and agility to be examined by TIPC Implications for pensions, health, unemployment to be examined by Social Protection Committee

Composition of workforce by age group

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8. Public Sector Efficiency a. Observations: i.

ii.

iii.

iv.

v.

vi.

Wastefulness of government spending, low public trust in the Executive Branch of government, unreliability of police services and over-regulation are the major weaknesses reported in public sector institutions (WEF 2015, see box insert) Service delivery is wanting in the education sector. Despite a secondary education budget of J$26billion outcomes are less than effective with a very level of non-certification (MOE 2012/13 Sectoral Debate). Weaknesses observed in HIV incidence, life expectancy and infant mortality when compared to global averages (WEF 2015, see box insert) Economies enjoying higher levels of health, education and security tend to be more innovative, productive and prosperous In a comparative analysis of 23 Latin American and Caribbean economies, on the efficacy of government spending to public sector performance, Jamaica was ranked 22nd (IDB, 2013, see graphic) The Jamaican public sector was adjudged as delivering less effective and less efficient outcomes to its citizens and economy when compared to its counterparts in the region (IDB, 2013, see graphic)

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b. Way Forward Actions / Options: i. Healthy, secure and educated population is a vital necessity for improving economic growth trajectory ii. Superior quality of leadership and management of the public sector directly impacts the sector’s ability to deliver transformational outcomes; particularly in a context of tightly constrained financial resources and perceived low workforce motivation and engagement. iii. Optimising fit of strategy, systems, structure and structure of public sector to support the needed high growth regime iv. Culture of public sector needs urgent reform. In order to build dynamism and agility, all heads of agencies should be on time-limited performance contracts as obtain in Executive Agencies.

9. Informal Sector a. Observations i. The number of persons employed within the informal sector represents a significant portion (37.85%) of the employed labour force as shown in Table 9.1. ii. The “Informal Sector” is as defined by STATIN and is in accordance with the international definition being used by the ILO:  All own-account workers and employers who own informal enterprises  Employees working in enterprises with less than 10 employees  All contributing family members  All employees in jobs where NIS contributions are not deducted from the wages. iii. It is to be noted that the definition does not include “workers in the agricultural sector” (207,800 in 2014; 18.5% of the LFS) and “household domestic workers” (32,100 in 2014; 2.9% of the LFS) iv. Un-registration and informality are challenges that need to be addressed in a structured manner and sustained manner that all workers may benefit in the long run. v. It is to be noted that even though agricultural workers and domestic workers are not included in the informal sector, many of these workers are also unregistered with and are not participating in the NIS. Table 9.1 - Informal Sector Employment Year 2014 Male Formal Informal Agriculture Domestic Worker Unclassified TOTAL

Female

205, 700 255,200 169,000 0 9,600 639,500

TOTAL 237,000 170,000 38,800 32,100 4,800 483,500

%age

443,300 425,400 207,800 32,100 14,400 1,123,000

39.47 37.85 18.50 2.90 1.28 100

Associated with the informality are the other related observations: vi. Social Welfare benefits such as NIS and pensions are not available to persons in the informal sector. The comparative ages of the persons employed in the formal and informal sector, Table 9.2 indicates that more persons remain employed in the informal sector after the usual retirement age of 65. In addition there are a higher number of persons in the 55-64 age group, who are approaching their pensionable age without the necessary securities for retirement. vii. Under-education of the population within the informal sector (See Table 9.3). The undereducation of persons within the informal will restricts their upward mobility and their ability to transfer to jobs which require higher levels of skills and competencies, particularly within the formal sector.

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viii. Construction and Private Household Employment represents the sectors of the economy in which there is the highest employment within the informal sector (See Table 9.4). ix. While the highest volume of informality occurs within the geographic regions of Rural Areas and the KMA, (See Table 9.5), informality outstrips formality in the Rural Areas and in Other Urban Areas; x. Government Services almost doubled as a percentage of GDP over the 1970-2014 period (STATIN); juxtaposed against the efficiency and effectiveness outcomes noted in Observation 8.a.vi above Table 9.2 – Comparative Ages of Employed Persons Ages Formal Informal 14 - 19 20 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 & over TOTAL

5,000 56,300 142,100 113,900 80,200 39,000 6,800 443,300

10,200 38,100 107,800 112,600 90,500 45,700 20,500 425,400

Table 9.3 – Educational Qualification by Highest Exam Exam Formal %’age Informal None (uncertified) CXC Basic, JSC 5 SSC CXC Gen., GCE “O” 1-2 CXC Gen, GCE “O” 3-4 CXC Gen, GCE “O” 5+ GCE A 1- 2 GCE A 3 or more Degree Other Not Stated TOTAL

150,000 8,600 15,300 34,500 44,500 1,600 4,800 134,000 20,000 29,500 443,300

Table 9.4 – Employment by Industry Group Industry

34% 2% 3% 8% 10% 0% 1% 30% 5% 7% 100%

Formal

Mining & Quarrying Manufacturing Elec., Gas & Water Construction Wholesale, Retail & Repairs Hotels & Restaurants Transport & Storage Real estates, Business Act & finance Public Admin., Education & Defence Health, Social work & Personal Services Private Household employee Not Stated TOTAL

%’age

336,200 5,700 11,300 16,200 12,400 600 1,100 14,900 10,600 16,300 425,400

79% 1% 3% 4% 3% 0% 0% 4% 2% 4% 100%

Informal 5,400 34,000 7,900 10,100 63,700 46,200 32,200 73,600 122,200 44,100 1,400 2,000 443,000

%’age informality

0 37,100 0 68,100 157,000 32,400 41,800 17,200 4,400 43,600 21,900 0 425,400

0% 52% 0% 87% 71% 41% 56% 19% 3% 50% 94% 0% 49%

Table 9.5 – Employment by Geographic Region of Residence Region Formal Informal KMA Other Urban Areas Rural TOTAL

215,500 88,500 139,300 443,400

152,700 90,100 182,600 425,400

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b. Way Forward Actions / Options: 1.

2.

3.

The changing structure of the economy (see Table 9.6) from production to services requires that workers be better educated and possess some of the soft skills which are essential for functioning in today’s world. Employers and employees are to be targeted to reach those persons who have no basic qualification or training to become more equipped to deal with their present employment status. Under-registration in the NIS needs to be addressed through direct contacts with the employees and the employers and public education strategies. The target populations should be all persons in the informal sector, private household employees and the agricultural sector. The development of macro-economic policies aimed at reducing the informality and un-registration in the economy.

c. Impact: I. II. III.

Better educated and skilled workers will be more productive Registration and participation in the NIS programme will alleviate old age poverty, thereby reducing dependency on the state. A reduction of the size of the informality will facilitate better management of the economy

Table 9.6 - Changing Structure of the Economy - %age Contribution INDUSTRIES

1970

1980

1990

2000

2011

2014

Wholesale, Retail; Repairs; Install.

18.9

19.2

18.2

19.7

18.9

17.6

Producers of Government Service

7.9

14

7.4

11.7

14.2

13.15

Real Estate, Renting ,etc.

9.5

8.5

9.9

9.3

12.2

10.74

Financial & Insurance Services

3.5

4.8

6.8

9

10.2

11.05

Transport, Storage & Commun.

5.5

5.1

8.4

10.7

9.7

10.99

Manufacturing

15.8

16.6

16.9

10.5

9.2

8.46

Construction

13.3

5.8

7.2

7.6

7.3

7.12

Other Services

5.6

4.3

6

6.6

6.7

6.9

Agriculture Forestry & Fishing

6.4

8.2

6.8

7

6.5

6.98

Hotels & Restaurants

1.6

0.9

6.1

5.1

4.3

5.55

1

1.6

2.2

3.2

3.6

3.16

Mining & Quarrying

12.7

14.2

7.8

4.2

1.5

2.32

Less: FISM

1.7

3.3

3.7

4.6

4.3

4.02

100

100

100

100

100

100

Electricity & Water Supply

Total Value Added Source: www.statinja.gov.jm

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19702014

TOP THREE PRORITY RECOMMENDATIONS from TIP Working Groups

Working Group

Chair

a. b. c. d. e. f.

Dr Vanesa Tennant Mr. Mervyn Eyre Dr Marina Ramkissoon Dr Andrea Barrett Comm Silburn Clarke / Dr Andre Jones Ms. Sonia Jackson

Labour Market Information System WG Public Sector Efficiency WG Human Factors WG National System of Innovation WG SME WG Cross Cutting Issues

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Top  3  recommenda-ons  from  SME  TIP  Working  Group   (as  of  December  2,  2015) #  

Our  Observa+on  is  ….  

The  Impact  is  …  

Our  Recommenda+on  is    …  

The  Benefit  Will  Be  …  

Policy,   Legisla+on,   Administra+ve   or     Programme  

1  

Lack  of  breadth  of  op0ons  for  funding   entrepreneurial  ventures  have  been   iden0fied  as  a  major  impediment  to  the   development  of  high  growth  export-­‐ oriented  SME  firms     Simultaneously,    long-­‐term  domes0c   savings  represented  by  the  domes0c   Pensions  is  locked  off  from  high  growth   export-­‐oriented  SME  firms.    These   savings  currently  stands  at  over  JAD $300billion     Investments  by  pension  funds  in  the   real  produc0ve  sector  of  the  na0onal   economy  is  a  con0nued  and  repeated   call  by  Pension  Trustees  

•  The  ability  of  firms  to  increase  global   market    ac0vity  is  stymied   •  The  contribu0on  of  firms  to  expansion   of  GDP  is  consequently    thwarted  

Explore  innova0ve  op0ons  to  increase  funding   solu0ons  to  the  high-­‐growth,  export-­‐oriented  sector  

•  Encouragement  of   entrepreneurial  ac0vity  among     high-­‐growth,  export-­‐oriented   SME’s    

Policy,   Administra0ve  and   Programme  

•  Authorise  a  very  small  propor0on  of  pension   savings  to  be  deployed  to  provide  funding  solu0ons   to  the  high-­‐growth,  export-­‐oriented  SME  sector.   •  Authorise  a  new  asset  class  within  the  pension   asset  classes  to    the  high-­‐growth,  export-­‐oriented   SME  sector.   •  Set  the  asset  class  limit  at  1%.    This  ac0on  would   release  $3billion  to  the  high-­‐growth,  export-­‐ oriented  SME  sector.   •  One  management  model:    The  funds  could  be   pooled  into  a  centrally  managed    Na0onal   Innova0on  Fund,  which  then  takes  equity  posi0ons   in  firms  in  the    high-­‐growth,  export-­‐oriented  SME   sector.   •  The  target  firms  would  buy-­‐back  the  ini0al  equity   stake  of  the  NIF  over  0me  as  the  firms  grow  and   expand     •  The  Jamaica  Produc0vity  Centre  would  be  tasked   with  delivering  training  to  the  targeted  high-­‐ growth,  export-­‐oriented  SME’s  in  areas  of   Leadership,  Collabora0on,  Technology,  Human   Factors,  Innova0on,  Produc0vity,  Compe00veness  

•  Encouragement  of  medium-­‐ growth  to  strive  to  high-­‐growth   status   •  General  signaling  to  society  of   increased  entrepreneurial  focus   and  ac0vity   •  Increased  market  ac0vity  by   firms   •  Increased    innova0on  and   produc0vity  by  firms   •  Increased  contribu0on  to  GDP   by  firms    

Top  3  recommenda-ons  from  SME  TIP  Working  Group   (as  of  December  2,  2015) #  

Our  Observa+on  is  ….  

The  Impact  is  …  

Our  Recommenda+on  is    …  

The  Benefit  Will  Be  …  

Policy,   Legisla+on,   Administra+ve   or     Programme  

2  

The  link  between  compensa0on  and   produc0vity  is  weak  at  the  firm-­‐level     The  signals  used  by  firms  and   representa0ves  of  talent  for  seYling  on   compensa0on  increases  are  oZen0mes   not  derived  from  the  internal  specifics   of  the  firm  but  oZen  on  external  macro   factors  eg  infla0on,  devalua0on       The  process  can  be  likened  to  a  na0onal   collec0ve  bargaining  process  where   na0onal  signals  determine  firm-­‐level   decisions  and  the  idiosyncrasies  of  the   firm  are  subsumed     The  narra0ve  between  talent  holders   and  businesses  in  the  area  of   produc0vity  needs  to  be  made  less   ambiguous,    clearer  and  certain      

•  The  ability  of  firms  to  quickly  adjust   compensa0on  is  inhibited  

Develop  a  clear,    unambiguous,    sustainable    and   equitable  method  to  align  compensa0on  with   produc0vity      

  •  Alignment  of  compensa0on  with   produc0vity  

Policy,    Legisla0on,   Administra0ve  

•  Develop  appropriate  methods  for  firms  to   determine  their  level  of  produc0vity   •  Jamaica  Produc0vity  Centre  to  inves0gate  and   recommend  methods  for  firm-­‐specific  assessments   of  produc0vity   •  Jamaica  Produc0vity  Centre  be  empowered  to   deliver  a  service  to  firms  to  audit  and  report  firm-­‐ level  produc0vity  

•  Compensa0on  driven  by  firm-­‐ level  dynamics    

Top  3  recommenda-ons  from  SME  TIP  Working  Group   (as  of  December  2,  2015) #  

Our  Observa+on  is  ….  

The  Impact  is  …  

3  

The  enabling  environment  for  the   •  Very  low  level  of  innova0on   encouragement  of  indigenous   performance  and  output  at  firm  and   innova0on  is  lacking   individual  levels     The  delivery  of  sustainable  market-­‐ accepted  product  and  services  depend   of  the  ini0al  thoughts  of  creators,   inventors,  innovators,  ideators    followed   by  a  process  of  protec0ng  these  ideas,   par0cularly  those  with  commercial   promise     Jamaica’s  Patent  Act  is  dated  from  1857,   was  designed  for  an  era  long  gone  and   is  woefully  out  of  date     Very  low  level  of  paten0ng  ac0vity        

Our  Recommenda+on  is    …  

The  Benefit  Will  Be  …  

Policy,   Legisla+on,   Administra+ve   or     Programme  

Move  rapidly  to  modernise  the  Patent  Act    

•  Encouragement  of  the  idea0on   and  inven0on  poten0al  among     all  Jamaicans    

Policy,  Legisla0ve   and  Programme  

•  Development  of  a  pool  of  ideas   for  investors  to  examine,  filter   and  commercialise   •  Solu0ons  to  Jamaican  context-­‐ specific  problems  would  be   encouraged  

 

 

Labour Market Reform Commission Technology, Innovation and Productivity Committee Human Factors Working Group

TOP THREE PRIORITY RECOMMENDATIONS (Draft)

WG Chair:

Dr. Marina Ramkissoon

Members:

Ms. Sonia Jackson (Co-Chair) Dr. Vanessa Tennant (Co-Chair) Ms. Tashana Briscoe Commisioner Silburn Clarke

Date:

December 2nd, 2015 Preamble

Policy development process: • • • • • • •

Identify policy issues Establish principles underlying policy statements Establish objective and purpose of the policy statements Outline strategies, protocols, procedures etc. to implement policy statements Review of existing policies to avoid duplication Obtain feedback from key stakeholders on proposed policy statements Establish monitoring and evaluation process and procedures for policy

Key Definition: “Human factors” are broadly defined as psychological, social-psychological and cultural factors at the individual, group and organizational levels

  Policy issue in brief (preliminary observations)

1

There is insufficient data gathered on ‘human factors’ at the national level in a regularized and systematic manner. There is insufficient data on ‘human factors’ to conduct statistical analyses to determine their impact on productivity and innovation of firms and employees. For example: • Labour Force Survey traditionally focused on underemployment although it has included the informal sector recently • JSLC focuses mostly on households and emphasizes poverty assessment • Data on innovation and knowledge use are sometimes measured in terms of patents generated or literacy rates rather than in terms of individual behaviour

Expected impact

Lack of empirical support for the impact of human factor variables on productivity and innovation result in these factors being neglected in planning and design of strategies to increase productivity and innovation at the national level. Productivity continues to be viewed in mostly economic terms.

Fundamental principles

A psycho-socio-cultural framework for understanding human behaviour in the workplace is required to complement the current knowledge on productivity and innovation.

Policy objective/prescription

Include ‘human factor’ variables in data collection procedures in surveys at the national level in a regular and systematic manner.

Recommended procedures, strategies, guidelines, processes or protocols etc.

1. The JPC should collaborate with entities like STATIN to design and execute an annual survey on human factors which impact innovation and productivity. 2. The JPC should consult with an HRD expert to inform the content of the survey.

Timeline

12 months

Expenditure

TBA

 

Policy issue in brief (preliminary observations)

2

During the preliminary discussions of TIPC and HFWG, several barriers to productivity and innovation were identified: lack of collaboration among key stakeholders, the operation of silos, and individual defensiveness. These issues are considered to be prevalent across public and private sector organizations, as well as within organizations. For example: • Currently, lack of collaboration among institutions is hindering attempts of TIPC sub-groups (LMIS) to achieve their goals • The national MSME Entrepreneurship policy (2013) noted that there needs to be greater collaboration among all the key stakeholders at all levels nationwide for the provision of training and development services for MSMEs. • Despite numerous calls for increased collaboration and despite numerous meetings, individuals and organizations continue to operate in silos because they lack collaborative skills and intentions

Expected impact

Fundamental principles

The discussions suggest that the impact of the LMRC may be significantly diminished if lack of collaboration results in its policy recommendations not being implemented in a strategic and integrative manner across all relevant organizations. • Effective collaboration is not only necessary in order to thrive, it has become essential even to survive, because organizations cannot compete externally if they can’t first collaborate internally. • Effective collaboration has become the fastest, easiest, most cost effective way to become more competitive in the market place.

Policy objective/prescription

To conduct training workshops to build collaborative skills with key stakeholders from organizations including but not limited to: Statistical Institute of Jamaica (STATIN), Planning Institute of Jamaica (PIOJ), Ministry of Labour and Social Security, Private Sector Organization of Jamaica, Jamaica Productivity Center, HEART Trust, leading institutions of higher education, LMRC, and trade unions.

Recommended procedures, strategies, guidelines, processes or protocols etc. Timeline

See detailed proposal submitted to LMRC.

Expenditure

See proposal

4 months (November 2015, or February 2016)

 

Policy issue in brief (preliminary observations)

3

The JPC takes a primarily economic approach to defining and understanding productivity at the expense of a broader theoretical approach which includes psychology, social psychology and sociology. This economic orientation currently limits the training options which it offers and its analysis of barriers to productivity. For example: • The JPC conducts mostly labour market and GDP analyses • Calculates productivity in economic terms • Sees improved labour quality in terms of skill upgrading

Expected impact

The JPC’s stated priority objectives of promoting a national productivity conscious culture and building productivity-driven private and public sector organizations may only be partially achieved.

Fundamental principles



Policy objective/prescriptions

The JPC should increase its capacity to conduct psycho-socio-cultural analysis of “human factors” relating to productivity and innovation, to complement its current economic orientation.

Recommended procedures, strategies, guidelines, processes or protocols etc.

The JPC should create a job post for an Organizational Behaviour Specialist or an Industrial/Organizational Psychologist, or seek the services of a similarlytrained consultant to help design research and interventions geared towards the required culture change.

Timeline

12 months

Expenditure

TBA

A psycho-socio-cultural framework for understanding human behaviour in the workplace is required to complement economic analysis of productivity and innovation.

Top  3  recommenda-ons  from  LMIS  TIP  Working  Group  (as  of  December  2,  2015) #  

Our  Observa+on  is  ….  

The  Impact  is  …  

Our  Recommenda+on  is    …  

The  Benefit  Will  Be  …  

Policy,   Legisla+on,   Administra+ve   or     Programme  

1  

Collec(ng,  analyzing  and  publishing  of  Labor   Market  Informa(on  needs  strengthening.       •  Duplica(on  of  data  by  Suppliers  

•  Duplica(on  of  development,  analysis,  and   ineffec(ve  dissemina(on.  

•  The  establishment  of  an  efficient  labour  market   system  through  a  fully  func(oning  LMIS  should   involve  a  well-­‐coordinated  approach  to  the   collec(on,  analyzing  and  publishing  of  LMI.     •  Revisit  and  revamp  the  role  of  the  Labour   Market  Informa(on  Technical  Advisory   CommiJee  (LMITAC)  –charge  CommiJee   to  implement  procedures,  strategies,   policies  to  foster  greater  integra(on   Coordina(on  and  Harmoniza(on  among   players       •  Use  technology  (such  as  the  ILO  toolkit)to  foster   data  sharing  and  collabora(on-­‐    where  the       network  of  ins(tu(ons,  persons  and  informa(on   that  have  mutually  recognized  roles,  agreements   and  func(ons  w.r.t.  the  produc(on,  storage,   dissemina(on  and  use  of  labour  market  related   informa(on  and  results  in  order  to  maximize  the   poten(al  for  relevant  and  applicable  policy  and   programme,  formula(on  and  implementa(on    

•  Increase  coordina(on  in  the   supply,  analysis  and   dissemina(on  of  LMI  

Policy  and   Programme  

•  Suppliers  generally  operate  independently   without  sharing  data.       •  Data   suppliers   face   difficulty   when   collec(ng   data   from   primary   sources   and   secondary   sources   (while   STATIN’s   data   collec3on   system   is   guided   by   a   Sta3s3cal   Act,   the   other   providers   of   LMI   do   not   have   a   legisla3ve   framework   to   carry   out   this   func3on.  )   •  Greater   level   of   analysis   is   required   to   determine,   validate   and   predict   the   demand  for  and  supply  of  labour.    

•  Absence  of  a  LMI  governance  structure   policies  and  procedures,  liJle  or  no  financial   or  other  resources  and  unclear  lines  of   demarca(on  for  the  produc(on  of  and  the   clearinghouse  for  labour  market  research   results  and  other  informa(on    

  •  Greater  use  of  technology  to  gather  data  (.g  in   the  field)  and  to  analyze  data     •  Capacity   building   programs   to   undertake   improvement   in   the   LMIS-­‐   Administra(ve   and   Analysis     •  The  Annual  Return  form  should  be  modified  to   collect  addi(onal  data  to  enrich  Labour  Market   Informa(on  -­‐  to  assist  with  the  collec(on  of   wage  data  

•  Increase  efficiency  in  analysis   and  dissemina(on  of  LMI   •  Increased  standardiza(on  of   labour  market  informa(on   produced   •  Improved  ability  to  meet  (me   lines  and  carry  out  assigned   tasks  in  a  (mely  manner   •  Increase  the  quality  of   informa(on  produced  by   efficiently  and  accurately   measuring  the  demand  for  and   supply  of  labour  to  guide   stakeholders    

Top  3  recommenda-ons  from  LMIS  TIP  Working  Group   (as  of  December  2,  2015) #  

Our  Observa+on  is  ….  

The  Impact  is  …  

Our  Recommenda+on  is    …  

The  Benefit  Will  Be  …  

Policy,   Legisla+on,   Administra+ve   or     Programme  

2  

The  LMIS  faces  serious  challenges  with  skills   mismatch,  as  there  are  (mes  when  jobs  are   posted  on  the  system/database  and  suitable   candidates  are  not  found  to  match  what  the   employers  are  looking  for.         It  therefore  means  that  more  jobseekers  with   specific  skills  need  to  be  encouraged  to   register  on  the  system/database.    

•  Incomplete  representa(on  of  the  available,   emerging  and  obsolete  skills  in  Jamaica  

Develop  policy  from  a  Na(onal  perspec(ve  to  have   all  persons  enrolled  in  Secondary,  Ter(ary  and   Voca(onal  ins(tu(ons  registered  to  the  LMIS  

•  Comprehensive  skills  bank   which  informs  users  on  the   number,  emerging,  obsolete   and  available  skills  in  Jamaica    

Policy  and   Programme  

•  All  public  secondary  &  ter(ary  schools  are   required  to  complete  a  census     •  Assign  Career  Counselors  and/or  retrain/retool   Guidance  Counselor       •  Mandate  Career  week  on  a  yearly  basis  –  (this   will  lead  to  Career  Development)     •  Mandate  registra(on  or  make  it  enforceable  at   gradua(on  –  (development  of  school’s  core   curriculum  to  support  that)       •  Sensi(ze  graduates,  provide  direc(on  for  career   path,  cross  match  skills  with  jobs   •     

   

3  

Under-­‐u(liza(on  and/or  lack  of  Compliance  of   LMIS  by  Employers      

•  Absence of a national database that can provide viable option to employers looking for these skills.

•  All  public  sector  en((es  should  post  vacancies   and  search  for  jobs  via  the  LMIS,  the  Ministry  of   Labour    and  Social  Security  portal    

•  No    mo(va(on  for  job-­‐seekers  to  register,   especially  when  employers  recruit  through   private  agencies  or  word  of  mouth    

•  Vacancies  (LMIS)  must  be  adver(sed  on  LMIS   and  in  print  and  electronic  media  prior  to  work   permit  applica(on    

•  Improve  awareness  of  the   benefits  of  the  portal  to   graduates  of  these  ins(tu(ons   •  An  increase  in  the  types  of   cer(fied  persons  with  specified   skills  set     •  Improvement  in  the  op(ons   available  to  employers  for   selec(on  of  candidates  based   on  their  posted  vacancies    

•  An  increased  number  of  jobs   will  be  posted  on  the  LMIS   •  Increased  opportunity  for   locals  to  apply  for  adver(sed   posi(ons   •  Increased  capacity  building  for   more  Jamaican  jobseekers  

Policy  

Top  3  recommendations  from  the  National  Systems  of  Innovation  (NSI)  TIP  Working  Group   as  at  December  3,  2015      

 Our  Observation  is…  

The  Impact  is  …  

Our  Recommendation   is  …  

The  Benefit  Will  Be  …  

 Program  /   Policy  

1  

A  research  &  development  (R&D)  culture  led   by  our  policy-­‐makers  for  pillar  sectors  of  the   economy.  Eg.  Agriculture,  Health,   Manufacturing    

The  creation  of  innovative   initiatives  for  the   production  of   commercialized    products   and  services  relating  to   respective  sectors  which   may  contribute  to  cross   linkages  within  other   sectors  and  contribute  to   the  country’s  GDP  

Develop  a  national  R&D   budget  with  buy-­‐in  from   key  stake  holders  e.g.  SRC     Implement  fiscal  and   monetary  policies  to   create  more  R&D  activities   supporting  innovation   from  the  private  sectors.  

Identification  of  value-­‐added   innovative  goods  and   services  for  both  domestic   and  international  markets          

Policy  and   Program  

2  

Cohesive  educational  reform  supporting  STI;   starting  at  the  primary  school  level  

Creation  of  a  cadre  of   young  scientists  who  can   be  potential   inventors/innovators    

Sustainable  curriculum   reform  in  the  areas  of  the   natural  sciences,  and   applied  mathematical   sciences  to  augment   existing  STEM  programs  

Development  of  human   capital  with  robust    STI  mind-­‐ set  as  a  basis  for  STI   transformation  in  strategic   areas  of  the  economy  

Policy  and   Program  

3  

Support  Services  to  facilitate  innovation   initiative  

Development  of  a  robust   infrastructure  supporting   innovation  initiatives  to   promote  innovation   activities  within  the   economy    

Engage  stakeholders  who   are  developers  of     infrastructures  necessary   for  innovation  initiatives  

Societal  buy-­‐in  of  unified  NSI   agenda  

Both  policy  and   programs,   however  more   program  oriented.  

 

Top 3 recommendations from the Public Sector TIP Working Group (as of December 2, 2015) #

Our Observation is ….

The Impact is …

Our Recommendation is …

The Benefit Will Be …

Policy or Programme

1

Leadership: The required Information Technology (IT) Governance capabilities and frameworks do not exist to support the effective adoption of IT, knowledge management and innovation in the public sector workplace.



Slow or poor adoption of technology tools in the public sector workplace, denying workers the opportunity to be creative in the context of a modern knowledge-based society; results in poor productivity.



Public sector leaders (Ministers, Permanent Secretaries, Supervisors) be trained in the effective governance of IT and technology-based innovation as an essential leadership capability Implement a Government of Jamaica (GOJ) IT Governance framework, with urgency.



Improved productivity and a motivated workforce where employees have greater confidence in leadership.

Programme

Access to Technology and Skills: Fundamental Information Technology tools to support effective collaboration and knowledge sharing across government agencies do not exist, and public service agencies are unable to compete in attracting and retaining the key talent required for effective technology adoption.



The expected business outcomes of technology projects are not realized. In some instances, projects completely fail. A bureaucratic, siloed approach to work is perpetuated, disempowering the labour force and making government an unattractive place to work.



Accelerate the plan to deliver shared IT Services (through eGovJa) across government agencies, along with associated governance and change management.



A Shared IT Service strategy will provide MDAs with access to technology at lower cost and will allow GOJ to pay for key skills at market rates. Access to essential technology tools will result in a more empowered, knowledgeable workforce equipped to deliver improved productivity with greater job satisfaction.

Programme and Policy

Culture of Partnership: Government does not have a culture of partnership across Ministries Departments & Agencies (MDA’s), nor with the private sector



Major opportunities are being lost for process innovation across agencies, and for the public sector workforce to collaborate more effectively. The benefits of adopting new business models to increase public sector productivity and contribute to the development of the labour market are being lost.



A transformed, knowledgeable public sector workplace with exemplars of Public/Private Partnership-based innovation.

Policy and Programme

2

3











Accelerate the adoption of workflow and business process management technology across agencies, with supporting governance and best practices. Accelerate implementation of PPPs (or other Private/Public Sector vehicles) within the technology and knowledge services industry.