Greater investment needed to build skilled workforce: Experts
Roads, bridges, ports, power, industrial zones are the visible markers of an economy. Yet, for an economy to enter the final lap towards becoming a developed economy, it is important to make greater investment in human capital, skills, technology and innovation.
The country is currently at a crossroads, as it seeks to move away from its traditional reliance on cheap labour and to enter the realm of skilled and knowledgeable workers.
Experts and policymakers have said that building a developed economy requires connecting investment with production, employment, education, skills, research and innovation.
Prime Minister’s Adviser on Finance and Planning Prof Dr Rashed Al Mahmud Titumir said investment should be connected with production and employment.
“Investment should not only create assets; it should create production. Production should create employment, which will add to income and revenue, which will expand the economy,” he said.
He said the country’s economic policy should be shaped in the backdrop of the changing geopolitical and geo-economic scenario. Investment should be made more production-oriented to create employment.
Titumir said the government aims to shift from a debt-trapped and patronage-based economy to a production-based economy, where investment and employment will determine the trajectory.
For that, he said, it is important to create opportunities for investment in industrialisation and production, as well as to create a conducive investment-friendly environment.
Prime Minister’s Adviser on Education Dr Mahdi Amin also said skilled manpower, and good quality employment, including a modern education system, were key to building a strong economy. He said working people are the backbone of the country’s economy and it is important to keep them safe, secure, and skilled.
His speech also signified that it is important not only to create jobs but also to think about better jobs and skilled manpower.
Sakif Shamim, chairman of the Centre for Strategic and Economic Research (CSER) and managing director of Labaid Hospital Group, said education, skills, research and innovation should be thought of as the investment for the next phase of economic take-off.
According to him, experience from the developed world shows that investment in infrastructure, capital, and cheap labour has taken many countries from being third-world countries to first-world countries.
“At a certain point, knowledge, skills, technology, and innovation became important to accelerate growth,” he said.
Shamim cited the example of South Korea, which progressed from being a poor and war-torn country to a developed country with proper investment in education, technical training, science, engineering, and research.
The country had moved from capital- and labour-intensive industries and export-led economic development to a focus on human capital. The skilled manpower from technical education, science, and research then laid the foundation for moving into high-end manufacturing, automotive, electronics, information technology, and semiconductor industries.
Another example he gave was Taiwan, which moved its economy from agriculture and some labour-intensive industries to electronics and high-end engineering through massive investment in education, science, and research.
Shamim said Bangladesh’s human capital and skills are the key to its economic growth and development in the coming years.
“What we need to think about is not how many people are being educated, but how many people are being skilled and how we utilise them,” he said.
There is a huge mismatch between what the industries and businesses need and the availability of skilled manpower. Every year, millions of graduates enter the job market, while millions of jobs remain unfilled because of a lack of required skills.
Shamim said the country needs a whole new system that connects universities, technical education, and industries vertically to create a better-skilled manpower for the future. The curriculum should be designed in a way that anticipates future industrial needs. At the same time, manpower should be re-skilled and upskilled to meet the requirements.
He said artificial intelligence (AI) would fundamentally change the nature of work.
AI will change how accounting, software, design, content, customer service, and research are done. Young Bangladeshis need to not only acquire traditional skills but also learn technology and related skills, including critical thinking, creativity, and adaptability.
Shamim said Bangladesh’s graduation from Least Developed Country (LDC) status would also have an impact on its competitiveness. Apart from cheap labour, productivity, technology, diversification of products, their quality, and skills will be important. Education, skills, and industrial, employment, and investment policies need to think strategically.
A recent study on human capital by CSER, presented by Shamim, also underlined the importance of human capital as Bangladesh enters a new era of economic development.
It said Bangladesh has made substantial economic growth in the last few decades, helped by the growth in the ready-made garments sector, remittances, agriculture, industrialisation, infrastructure, and domestic consumption. Yet, the question remained whether the growth trajectory would be sufficient for Bangladesh to enter the next level of development.
The study showed that growth in the future would require structural reforms, including increased investment and employment.
Education, skills, and innovation will be at the centre of the country’s economic policy.
The study also showed how South Korea had invested massively in education, technical training, science, engineering, and research to move from being a capital- and labour-intensive economy to a technologically advanced economy.
South Korea’s real GDP growth averaged 5.6 percent per annum between 1980 and 2024, and its per capita national income increased from only around $67 in the 1950s to $36,624 in 2024. The country’s transformation was led by increased investment in human capital for research, technology, science, and engineering.
The report also underlined the disconnect between education and employment in Bangladesh. About 3.6 million Bangladeshis are expected to join the labour force this year, but most of them lack the required skills for the kinds of jobs available.
This is a challenge for policymakers, as Bangladesh’s job market is set to change dramatically with disruptive technologies like AI.
It is not enough to provide training; investment needs to rise, the business environment needs to improve, new industries and services need to emerge, and new jobs need to be created where skills are given due value.
The report stressed the importance of education, skills, industrial, and employment policies.
It urged policymakers to rethink technical education and skill development as part of an integrated national human capital development agenda.
It also said technical education and skills needed to be prioritised to diversify the economy, build a competitive workforce, and enhance productivity.
The country’s graduation from the LDC category would also have implications for its competitiveness in international trade and investment.
Productivity, skills, technology, diversification of products, and research and development will be important for Bangladesh’s economic growth and development.
The study said human skills should be thought of as infrastructure. Just as roads facilitate the movement of goods from one place to another, skilled manpower enables goods to be produced, marketed, and exported more efficiently.
The report recommended that investment in human capital, including improving the quality of education, technical education, teacher training, research, and industry linkages, should be part of the government’s long-term development agenda.
It also recommended changing the mindset about technical education, including making it easier for technical education graduates to join government service.
Ultimately, Bangladesh’s next phase of development will be determined by whether it can build a knowledge- and skills-based economy on the back of the foundations it has laid.
The study concluded that the country’s best investment for the future may not be in building roads, but in its people – in their education, skills, research, and innovation – and that such investment could enable Bangladesh to enter the next level of economic development.