Mind Your Business initiated a conversation in an earlier article about the challenges business owners face in attracting the relevant skills for their sectors. Much has been said in the IDB Country Strategy 2025–2030 about Barbados’ skills gap, and academics, as well as development practitioners, repeatedly opined about the gulf that exists between the labour needs of industry and the talent pool being produced annually. This week, therefore, is an opportune time to continue the conversation, as much is being said about educational reform and the need to ensure the education system caters to future business needs.
Appreciably, today’s rapidly evolving global economy is shaped largely by technological advances. Consequently, the skills required by firms are changing, resulting in many businesses facing skills gaps, both on the supply and demand sides. The mismatch between the skills workers possess and those needed to meet current and future business demands must be addressed through transformational policy.
Policymakers seem aware, to some extent, of the issue at hand.
The Ministry of Labour reported some time ago that findings from an employers’ survey, conducted in partnership with the Inter-American Development Bank under its Skills for the Future programme, were designed to help the country better anticipate and respond to evolving skills demands.
The Minister of Labour was quoted in the press as indicating that the data collected would be instrumental in shaping workforce-related policies, including curriculum development, career counselling, and occupational standards. He emphasised the importance of aligning training with global labour standards to ensure that Barbadian workers remained competitive and mobile in an increasingly globalised economy.
The survey findings would also inform immigration policy and decisions related to work permits and CARICOM Skills Certificates, since it was found that 13 per cent of employers in the tourism sector relied on work permits to fill roles ranging from sushi chefs to CEOs. It was anticipated that the data would support efforts to guide training providers in developing programmes that matched actual market needs.
The IDB specialist on the project stressed that the goal of the survey was to build a demand-driven training system, and the results would be used by education and training institutions to update their offerings and better align them with the requirements of the labour market.
That was in 2018. Fast forward seven years, and we still see firms in the hospitality sector looking outside of Barbados for skilled workers, while construction and other sectors continue to complain that the local market is coming up short in the supply of competent persons to meet the demands of their sectors. Admittedly, there are some sectors where a surplus of skills appears to exist. Technology and information and communications technology (ICT) readily come to mind.
The need for the right kinds of skills becomes even more acute when the productivity factor is assessed. At present, the country is faced with low productivity in both the private and public sectors. Ensuring adequate levels of skilled workers is one tool that can help to address this issue.
Productivity is a key driver of economic growth, improved living standards, and social inclusion. Higher productivity leads to better wages, job quality, and competitiveness across enterprises. However, despite rapid technological progress, recent findings from the International Labour Organisation (ILO) indicate that anticipated productivity gains, particularly in developing economies, have not been fully realised. A major contributing factor is the persistent and widening skills gap, especially among micro, small, and medium-sized enterprises (MSMEs).
MSMEs are critical to employment and economic activity, particularly in small and developing economies. Yet they often face significant barriers to productivity growth due to inadequate access to skilled labour, modern technologies, and financial resources. The ILO report suggested that the skills gap within MSMEs hampers their ability to innovate, adopt new technologies, respond to market changes, and scale operations. Many lack the capacity to clearly identify their skills needs, recruit competent workers, and access high-quality, industry-relevant training. This mismatch between workforce capabilities and business needs is a central obstacle to MSME competitiveness and growth.
One OECD study underscored the importance of workforce quality in productivity performance. The report found that over one-third of the productivity gap between high-performing and average firms could be explained by differences in workforce skills, diversity, and management quality. Beyond technical skills, effective skills utilisation and supportive workplace practices are essential for turning training investments into measurable performance gains.
Ongoing work by the ILO on Skills for Productivity, with a specific focus on MSMEs, has generated actionable insights for policymakers, employers, and workers on how to optimise skills development strategies to improve MSME productivity. The study examined both firm-level and structural dimensions of the skills-productivity relationship and investigated how targeted skills policies, and the incentives they create, can support inclusive structural transformation, enabling workers to transition into more productive and higher-quality jobs within MSMEs. Conversely, it considered how well-aligned skills strategies can drive MSME-led, job-rich economic growth.
Closing the skills gap requires a comprehensive and coordinated approach. This includes improving the design and delivery of skills development programmes, fostering closer collaboration between training institutions and enterprises, and creating policy incentives to integrate skills development into MSME strategies. The focus must go beyond individual training to system-wide interventions that align skills supply with evolving market demands.
A concerted effort is therefore needed, driven by a suitable policy framework to address the skills gap in the country. Incorporating productivity gains can be a catalyst for positioning the country on a path to greater economic growth through a competitive and world-class labour market. By placing the skills gap at the centre of the productivity challenge, more inclusive, competitive, and sustainable economic development can be achieved.
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