Importing skills for the non-energy sector

Richard Joseph
Caribbean Business Services Limited

One of the most demanding and apparently intractable challenges we face is the development of the non-energy sector of our economy to reduce our dependence on energy. The risks of this dependence are well understood as this matter has always been in the forefront of the national agenda for a long time. All of our administrations have initiated or supported initiatives of one type or another to support non-energy sector development. DFL, BDC, VCIP, NEDCO and now eTecK are all manifestations of these many and well meaning initiatives.

The various efforts have had some positive effect, as we are seen as having the most dynamic manufacturing sector in the English speaking Caribbean. This has not translated itself though into a permanent cure for unemployment, or an assurance of economic sustainability after our energy resources are depleted.

We all know that one of the major constraints on our development is the general unavailability of required skills. In the competition to attract the scarce skills that are available, energy sector firms more often than not get what they want over the non-energy sector firms, as a result of the compensation packages they offer. The inability of the non-energy sector to hire technical staff that can be developed into competent and experienced factory, production or supply chain managers seriously impacts on firms that also require knowledge power to effectively compete internationally.

At the lower end of the market, the non-oil firms have to compete with the drug trade and “easy” jobs. A manufacturing company reported that young men claimed that they could earn factory level wages and more in a fraction of normal factory working hours by retailing cocaine. A garment factory reported that some young women felt that dressing up and working in a mall was much better than slaving over a machine. CEPEP has now complicated things by making money available for a much less demanding day of work than a factory job.

We cannot be successful in manufacturing on the basis of cheap labor. That is now the domain of Asia, and even there, there is intra regional competition for offering the lowest cost workers. In addition to being relatively high priced, we also have what economists call “labor market rigidities” that make the swift reallocation of labor to take advantage of new opportunities difficult.

These are not the only issues that impact on the development of the non-energy sector, but they are issues that must be resolved for the other measures to bear fruit. Our broad strategy therefore has to be to continue at creating an increased supply of skilled labor in the marketplace, sufficient to meet the needs of both the energy and non-energy sectors. This requires cutting off the drug culture as a source of economic opportunity, and continuing our investments in education and training.

We are already developing capacity for increased skill output with the University of Trinidad and Tobago and COSTAATT. Training is however only one part of skill acquisition that also requires practice and experience, and these initiatives will not bear real fruit in the short term. This gap represents a considerable area of vulnerability for existing and potential new businesses. Competitive pressures are forcing change so quickly that a medium term solution to the skill problem is no solution at all, as firms may go out of business or opportunities fade before the solution arrives. We will not get any marks for doing our best in this area if our best is too late.

It is quite possible that the survival of our non-energy sector in the short term requires a relaxation of our immigration and work permit regulations to permit the aggressive recruitment of foreigners with the required skills. Just as we are recruiting medical staff from Africa and Asia, we need to recruit industrial engineers and skilled equipment operators from places that produce them such as Eastern Europe, Venezuela, India and China.

The energy sector already enjoys this facility as the employment of expatriate staff is a common and accepted practice. The non-energy sector needs similar opportunity if it is to acquire knowledge workers to build its international competitiveness. Modern manufacturing, for instance, has become very complex, with increasing use of computer controlled machinery of a specialized nature. There is a scarcity of skilled and experienced operators, and companies that invest in such equipment are frequently unable to get optimum use from their acquisitions.

We cannot afford to be narrow minded in this issue; we must understand where our self-interest lies. Metropolitan countries have no compunction about recruiting our nurses and teachers to meet their needs. Our needs are immediate and have to be resolved. Our non-energy sector may have to act in a similar manner if required for survival.