July 22, 2019

Chile and the Challenge of Moving Towards a Digital Economy

Ever since the beginning, humanity has needed to face and overcome the changes that industrialization brought along over the years. If in the eighteenth century the productive sectors were shook by the emergence of the first steam engine and other later developments like the first conveyor belt, today the challenge resides on how to adapt to a new “technological wave” or “The Fourth Industrial Revolution”, marked by greater digitalization and processes automation, which also leads to major labor market changes as well as the type of professionals required now and for the future.

According to data from the Organization for Economic Cooperation and Development (OECD), 22% of the jobs in Chile present a high risk of being automated in the coming years, while 31.4% are likely to experience important changes. These figures surpass the average in the countries that integrate the organization, 14% and 32% respectively.

According to the OECD, one of the causes associated to this high exposure to risk would relate to gaps in digital skills and education, which has triggered a decline in the rate of professionals with the necessary skills to take on the challenges that digital transformation involves.

Even though the numbers are alarming, they also represent an opportunity for the country to anticipate and respond to the upcoming labor demand, adapting the educational models all the way from infant school, betting on labor reconversion, and working on the basis of a greater connection and coordination with the productive sectors.

In response to this great challenge, and directly from the government, Juan Manuel Santa Cruz, National Director of Sence, said that if these opportunities are well used, new jobs should grow strong. Nevertheless, he assured that “for this to happen, it is essential that our country adapts to new forms of employment; a task that the Ministry of Labor has promoted through the legislative agenda”.

The authority added, “Bridging job skills gaps is a permanent task of our service and we seek that all our programs serve this purpose. The new thing in the labor market’s current context is that people are much more frequently exposed to change; switching work more often and having to constantly renew their skills to stay active and working”.

 

Bridging job skills gaps is a permanent task of our service and we seek that all our programs serve this purpose. The new thing in the labor market's current context is that people are much more frequently exposed to change; switching work more often and having to constantly renew their skills to stay active and working

Juan Manuel Santa Cruz , National Director of Sence

In this scenario, he said that “It is crucial that the Sence programs provide people with skills that are effectively useful for the challenges in their jobs. Therefore we have insisted on the efforts of the Observatorios Laborales (Labor Observatories), which can now be found in most regions of the country, and that for the first time, will quantify the competency gaps”.

Along the same lines, Hernán Araneda, VP of Human Development at Fundación Chile, emphasized that the most promising approach is to understand to what extent human skills are going to be substitutable (by) or will be complementary with technology.

“The challenge will reside in how we will provide skills for those people who access routine tasks; skills that are complementary with the technologies, and at the same time, skills that allow them to be more productive. It seems quite clear that technology can polarize the labor market between highly technological workers and others that remain relegated to jobs that are not replaceable by technology, but are of low productivity and income, such as trades and basic services,” he stated.

 

Productive sectors

As of now, there are several initiatives being promoted at a national level to pass through this transformation process in line with the future needs of the productive sectors. One of them is the implementation of the TP Qualifications Framework (Marco de Cualificaciones TP), a tool for the development, classification, and recognition of skills, knowledge and competencies that is considered a common reference, and is agreed upon by the different actors involved in the country’s Technical Training.

The Consejo de Competencias Mantenimiento 4.0” (Skills Council of Maintenance 4.0) also stands out. It is the first cross-section council that ensures the availability of human capital specializing in Maintenance, quantity and quality, and that also seeks to agree with the training sector on the requirement of skills that meet the current and future demands.

In addition there also exists “Digital Talent for Chile”, Program launched in January 2019, and based on the experience of the Tech Talent Pipeline it has been successfully implemented in New York since 2014. It seeks to develop new capabilities in people, in line with the demands of the digital economy, giving access to quality jobs and generating more opportunities. In particular, its aim is to have by 2022: 16,000 people trained (15,000 young people and workers, over 1,000 entrepreneurs), 10,500 employed, self-employed or people continuing their studies, and beyond one thousand entrepreneurs.

"The productive sectors must be connected through institutions like Fundación Chile to develop study programs and relevant capacities along with the training institutes in the interest of the different sectors' companies. And also along that line, to open doors and generate employment opportunities for those with the right skills"

Rodrigo Abumohor , president of the Skills Council of Maintenance 4.0.

In this context, Rodrigo Abumohor, president of the Consejo de Competencias Mantenimiento
4.0 (Skills Council of Maintenance 4.0), indicated that "the productive sectors must be
connected through institutions like Fundación Chile to develop study programs and relevant
capacities along with the training institutes in the interest of the different sectors' companies.
And also along that line, to open doors and generate employment opportunities for those with
the right skills".

Juan Manuel Santa Cruz, added, “For the success of national human capital initiatives, it is vital to have an active participation of the private sector and a clear commitment from the public sphere; having both of them dialoguing and coordinating their actions. We have seen massive initiatives fail in the past, because they tried to move forward without being coordinated with the productive sector, and we have learned our lessons from that”.

In the words of the director, “At Talento Digital and the Consejo de Competencias Mantenimiento 4.0, the training needs are raised alongside the employers that generate them, so they benefit both the company and the worker, who will have more employment opportunities”.

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