Mismatch between demand and supply of cognitive skills: Implications for women

The case for complying with such demands for upgrading women's skills arises from the projected estimates of a mismatch between demand and supply of certain types of cognitive skills in all parts of the world.

As Figure 2.1 shows, the importance of labour-intensive work is declining in the planning horizon of the industrialized world, with the introduction of computer-aided systems of production. Corporate organizations mainly need an assured supply of the requisite management and technical skills in order to meet the challenges of information-intensive methods of production. Even in the midst of world-wide recession, companies of the western world and of Japan face shortages of workers who possess such technical qualifications. Hence, those developing countries which can offer a supply of scarce skills become the favoured destinations for relocated manufacturing work from the developed part of the world.

The demographic trend in the western world accentuates this process. It indicates an impending shortage of skilled young workers in the developed world. From 1985 to 2000, the world's workforce is expected to grow by some 600 million people; 570 million of them will join the workforce in the developing world. In countries such as Pakistan and Mexico the workforce will grow at about 3 per cent a year. In contrast, growth rates in the United States, Canada and Spain will be closer to 1 per cent a year. Japan's workforce will grow by just 0.5 per cent a year and Germany's workforce will actually decline. The resultant shortages of skilled (and unskilled) workers are unlikely to be relieved by greater female participation in the developed world; this is because the developed nations have already absorbed a much higher percentage of women into the labour force than the developing world.

Source: Derived from figures supplied by the FAST Commission of the European Union (1984)

The ageing population of the developed world, compared with the youthful workforce of the developing nations, is likely to be less flexible and hence less amenable to the challenges of information-intensive jobs. Companies and countries in the richer parts of the world will increase their dependence on international sourcing for the requisite expertise; the trend will become more pronounced as the developing nations will produce an ever-increasing share of the world's graduates in science, mathematics and engineering. Between 1970 and 1985, the proportion of the world's college students from the United States, Canada, Europe, the Soviet Union and Japan dropped from 77 per cent to 51 per cent, and by the year 2000, students from developing nations will make up three-fifths of all students in higher education.⁶

For some countries and some companies, measures to attract scarce human capital have become an important strategic policy, even in the face of the political explosiveness of the immigration issue. According to experts in INSEE (Institut National de la Statistique et des Etudes Economiques), between now and the year 2010 it will be necessary for France to admit 100,000 immigrants per annum - perhaps through yearly quotas by profession - if it is to avoid economic 'anaemia' arising out of shortages of skilled labour.⁷

Alternatively, the companies of the developed world will have to relocate the information and knowledge-intensive jobs to countries where the youthful population is well-equipped to take up the challenges of the new tasks.

The extent and direction of foreign direct investment (FDI) from the developed to the developing world is already influenced by this trend. A small number of Asian countries, mostly located in East Asia, have experienced an upsurge in the inflow of foreign direct investment (Table 2.1).⁸ Significantly, these are the countries, such as China and the Republic of Korea, which have a relatively highly trained female workforce and possess adequate industrial infrastructures.

In the pioneer days of electronics, employers needed the nimble fingers of women workers for connecting tiny wires to a semi-conductor. The same task is now being done by a machine, with as many as ten machines under the charge of just one woman. It is not only the labour content that is decreasing; the quality of labour that is being demanded of electronic workers by the global companies is rising at the same time.⁹

The need for skilled workers also arises from the changing nature of marketing strategies adopted by corporate organizations. In semiconductors, for example, the global trend is away from mass-produced 'jelly-bean' chips to high-value-added, application-specific, integrated circuits (ASICs).¹⁰ The production of ASICs, unlike that of standardized semiconductors, involves a far greater input of circuit design and of software programming. The limited supply of design engineers thus poses an obstacle for moving up in the product cycle.

In other words, a country can entice investments from global companies by offering cheap skilled labour. It is, of course, not possible for all countries to produce these cognitive skills in the right quantities to attract adequate FDI. It is unlikely that the majority of women in any country will have access to the relevant training and education. A handful of elite women can be trained for new openings in management, technical or software programming jobs, but it will be difficult for a vast number of blue-collar workers to be trained, in a short period, in the multiple skills that computer technology and the global companies demand. For them, it will be important to explore alternative avenues of employment - perhaps in the small and medium-scale sectors.

Table 2.1 Foreign direct investment in selected South East Asian countries (US$ trillion)

Sources: UNCTAD, 1992 and 1994

(a) excluding Brunei. which has small negative flows, reaching US$4 million in 1992

The general mode of training in large companies could also be incompatible with the needs of blue-collar workers. Women's ability to make use of formal training schemes depends much on their position in the society and in the family. A woman worker often has to cope with violence and abuse in the family, along with the responsibilities of childcare. These factors affect her ability to pursue education and career progression. Informal training - such as is often gained by women in the small and medium-scale sector - could be of greater relevance for blue-collar workers.

For blue-collar workers, employment prospects in the high-tech era remain uncertain. Computer-aided technology improves productivity and wages, but it also reduces the need for unskilled labour. In some situations, when the market expands continuously to absorb the surplus labour, the volume of employment of blue-collar workers widens or remains unchanged in spite of new technology. In Bangladesh, for example, a worker displaced by new technology could easily find another job with the same employer or have an option in employment with another enterprise (UNIDO, 1993). The possibilities are not always so optimistic, particularly when the technology is coupled with radical organizational innovations. The innovations demand not only less labour on the factory floor but different and complex skills to which blue-collar workers, who are women, rarely have access. In Malaysia, for instance, the introduction of the JIT system in the semi-conductor sector increased the demand for expertise in material control systems such as Materials Requirement Planning (MRP), and Materials Resource Planning (MRPII).¹¹ The result of introducing JIT has been impressive. In one firm, the use of JIT and automation has, since 1984, halved the labour and the factory space needed and resulted in a reduction in the working week to four days (Narayan and Rajah, 1990). Most firms in Penang have reduced machine set-up time and manufacturing lead time.

The increased overall productivity, however, has meant a reduction in the share of female employment in the electronics industry of Malaysia. Whereas in the first phase of the industry up to 80 per cent of the workers were women, a 1986 survey showed that female representation had fallen to 67 per cent. Retrenchment, automation and the decentralization of work have mainly affected female assembly-line workers. When automation did create new opportunities, they were largely in the male-dominated professional, technical and maintenance categories.

The experience of the pharmaceutical and other chemical industries in India has been similar. Increased sub-contracting in the 1980s has entailed huge job losses for women assembly-line workers (Gothoskar, 1990; Gothoskar et al. 1991: pp. 100-102). Most new recruitment, in contrast, has been in the 'core', executive and managerial categories where women have negligible representation (Gothoskar et al., 1991: p. 101).

Retrenched women, and by definition older women, find it difficult to gain access either to in-service training or to academic training institutions that equip them for jobs in the formal sector. It is the small-scale satellite companies that often absorb retrenched workers in the labour-intensive assembly operations.