Since the 1990s, the world has entered a new phase of globalisation. Information and communication technology, trade liberalisation and lower transport costs have enabled firms and countries to fragment the production process into global value chains (GVCs). Many products are now designed in one country and assembled in another country from parts manufactured in several countries. Thirty percent of the value of exports of OECD countries comes from abroad. In this new context, GVCs and skills are more closely interrelated than ever. Skills play a key role in determining countries’ comparative advantages in GVCs. A lot of the opportunities and challenges brought about by GVCs are being affected by countries’ skills. The OECD Skills Outlook 2017 shows how countries can make the most of global value chains, socially and economically, by investing in the skills of their populations. Applying a “whole of government” approach is crucial. Countries need to develop a consistent set of skills-related policies such as education, employment protection legislation, and migration policies, in coordination with trade and innovation policies. This report presents new analyses based on the Survey of Adult Skills and the Trade in Value Added Database. It also explains what countries would need to do to specialise in technologically advanced industries.

1. OECD Skills Outlook
Global Launch
Skills and Global Value Chains
@UniofBathIPR, @OECDEduSkills
#OECDSkills
4 May 2017
Andreas Schleicher
Andrew Wyckoff

2. People are at the centre
of Global Value Chains
2

3. What Global Value Chains (GVCs) mean
Value added
The Smiling Curve
3
R&D
Design
Logistic
purchase
Production
Assembling
Logistic
s
Market
ing
Service
s
Pre-production
Upstream activities
Post-production
Downstream activities
Production
Value
chain
activities

4. 4
A comprehensive approach
Exports of manufactured goods include a large share of
value added from abroad
Foreign value added embodied in exports, manufactured goods and services, 2011
0
10
20
30
40
50
60
70
80
90
100
Domestic, in manufactured exports Foreign, in manufactured exports
Foreign, in business services exports
Source: OECD Trade in Value Added database (TiVA).

5. 0
10
20
30
40
50
60
70
80
90
%
EU28 East and Southeast Asia (excl. China) NAFTA
China Rest of the world
Many jobs depend on demand in foreign
countries
Source: OECD (2015b), OECD Science, Technology and Industry Scoreboard 2015: Innovation
for growth and society.
Jobs in the business sector sustained by foreign final demand, by region of demand
As a percentage of total business sector employment, 2011
5

6. +100
+1.1%
+0.4%
Source: OECD calculations based on Marcolin et al. (2016) .
Technology and employment in GVCs

7. 7
Investing in KBC and skills….
Countries differ in the number and type
of workers performing tasks shaping the
long-term functioning of firms,
i.e. in their Organisational Capital.
Health, Science
& Engineering
professionals …
12
14
12
12
12
10
9
14
19
14
15
17
17
20
15
24
20
22
21
26
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
CZE
SVK
ITA
ESP
SWE
KOR
DNK
BEL
EST
DEU
AUT
POL
IRL
FRA
JPN
NOR
USA
CAN
NLD
GBR
%
Investment: Managers Investment: Non-managers
Employed persons in
OC occupations as a
percentage of total
employed persons
Employment and investment in Organisational Capital, 2011-12 (As % of total VA)
Source: OECD Science, Technology and Industry Scoreboard 2015, DOI : 10.1787/sti_scoreboard-2015-en.
Managers

8. 8
…..is key to thrive in GVCs
Source: OECD Science, Technology and Industry Scoreboard 2015,
12
14
12
12
12
10
9
14
19
14
15
17
17
20
15
24
20
22
21
26
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
CZE
SVK
ITA
ESP
SWE
KOR
DNK
BEL
EST
DEU
AUT
POL
IRL
FRA
JPN
NOR
USA
CAN
NLD
GBR
%
Investment: Managers Investment: Non-managers
Employment and investment in Organisational Capital, 2011-12 (As % of total VA)
Source: Marcolin et al. (forthcoming)
.
OC over VA, by industry intensity in ICT, 2011

9. 9
…..is key to thrive in GVCs
Source: OECD Science, Technology and Industry Scoreboard 2015,
ICT investment over VA,
by degree of input offshoring
Services industries
12
14
12
12
12
10
9
14
19
14
15
17
17
20
15
24
20
22
21
26
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
CZE
SVK
ITA
ESP
SWE
KOR
DNK
BEL
EST
DEU
AUT
POL
IRL
FRA
JPN
NOR
USA
CAN
NLD
GBR
%
Investment: Managers Investment: Non-managers
Employment and investment in Organisational Capital, 2011-12 (As % of total VA)
Source: Marcolin et al. (forthcoming)
.
OC over VA, by industry intensity in ICT, 2011

10. Globalisation is being questioned
AUS
AUT
BEL
CAN
CZE
DNK
EST
FIN
FRA
DEU
GRC
HUN
ISL
ISR
ITA
JPN
KOR
LUX
MEX
NLD
NZL
NOR
POL
PRT
SVK
SVN
ESP
SWE
TUR
GBR
USA
-0.08
-0.06
-0.04
-0.02
0
0.02
0.04
0.06
-15 -10 -5 0 5 10 15
Change in the Gini
coefficient
Change in backward participation in GVCs
IRL
Inequalities have increased or decreased in countries that have increased
their participation in GVCs
Source: OECD Trade in Value Added Database (TiVA); OECD Income Distribution Database.
2000-12
10

11. Skills Matter for
globalisation
11

12. • Realise productivity gains
– offered by new technologies and participation in GVCs
• Protect workers against negative impact
– Job losses, lower job quality
• Specialise in advanced industries and services
– Innovation, higher productivity, job creation
12
Why skills?

13. The Race between Technology and Education
Inspired by “The race between
technology and education”
Pr. Goldin & Katz (Harvard)
Industrial revolution
Digital revolution
Social pain
Universal
public schooling
Technology
Education
Prosperity
Social pain
Prosperity

14. 0
0.5
1
1.5
2
2.5
Backward participation
(exports)
Backward participation (final
demand)
Forward participation (final
demand)
Least fragmentable industries Most fragmentable industries
Percentage points
Average annual increase in productivity growth, 1995-2009
Larger increase in:
Transport eq.,
Electrical and
optical eq.,
Food products,
Chemicals
Smaller increase in:
Computer activities,
R&D and other
business activities,
health and social
work
Source: OECD calculations based on OECD TiVA database and World Input-Output
Database (WIOD).
Participation in GVCs can lead to productivity
gains, especially if associated with skills
14
Skills channel

15. 15
Link between exports in GVCs and skills indicators
Source: OECD calculations based on OECD TiVA database and Survey of Adult Skills (PIAAC)
Countries can grow in global markets if their
workers have a range of skills
-0.02
-0.01
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
Regression coefficient
Assessed cognitive skills
Task-Based skills
Personality
trait

16. • Sources of inequality
– Skill-biased technological change and institutions:
important sources
– Competition from low-cost countries: another source
• What people do and the type of skills they
develop makes a difference
– More educated workers enjoy higher job quality
– Gap in job strain between low and highly educated
workers is larger in countries more active in GVCs
• Investing in skills particularly important in countries engaged
in lower end of GVCs
16
Impact of GVCs on inequalities within countries

17. 17
Gap in job quality between high-skilled and low-skilled workers
and participation in global value chains
More educated workers enjoy better job quality
AUT
BEL
CZE
DNK
EST
FIN
FRA
DEU
GRC
HUN
IRL
ITA
LUX
NLD
NOR
POL
PRT
SVK
SVNESP
SWE
TUR
GBR
0
10
20
30
40
50
60
0 10 20 30 40 50 60 70
Gap in the quality of the
working environment
between high-skilled and
low-skilled workers
Backward participation in GVCs, %
In countries more integrated in global markets,
the gap in job quality between educated and
less educated workers is bigger
Source: OECD calculations based on OECD Job Quality Database and OECD Trade in Value Added
database (TiVA).
Earnings quality
Level and distribution of earnings
Labour-market security
Risk of unemployment and available income support
Quality of the working environment
Nature and content of work performed, work-time
arrangements and workplace relationships)

18. 18
Production
Marketing
Services
Design
R&D
Value
added
along
GVCs
From
economic
to social
outcomes
By investing in skills, countries can help make
GVCs work for all
Skills
Employment
Social outcomes
Productivity

19. 19
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
Limited share of low-
skilled workers
To participate in GVCs, ensure that participation translates into productivity
growth and limit risk of employment loss, increased inequality and poor job
quality
Developing skills To ensure that participation in GVCs translates into good economic and social
outcomes, countries need to raise skill outcomes
Advanced skills To specialise in technologically advanced industries, the quality of skills at the top
end of the skill distribution is important
Increasing
participation in GVCs
How successfully have countries extended their participation in GVCs by
importing foreign inputs for exports and producing inputs used in other countries
inputs
Specialised in
advanced industries
Specialisation in technologically advanced industries is linked to value creation,
innovation and productivity gains (revealed comparative advantage)
Increasing
specialisation in
advanced industries
How quickly has the revealed comparative advantage grown
Increasing
productivity
Increased participation in GVCs can lead to productivity gains through many
channels, including specialisation, increased competition and technology diffusion
Increasing
employment
Participation in GVCs can affect employment through both job destruction and
job creation
Improving social
outcomes
Increased integration in GVCs can affect wages and inequalities, labour-market
security and the quality of the working environment

20. 0
10
20
30
40
50
60
70
%
Workers
In both literacy and numeracy In literacy only In numeracy only
The proportion of low performers in literacy and/or numeracy
Source: OECD calculations based on OECD Survey of Adult Skills (PIAAC) (2012 and 2015).
20
More than 200m adults in OECD countries have low
literacy or numeracy skills and 60% lack both

21. 100 80 60 40 20 0 20 40
Turkey
Greece
Chile
Lithuania
Israel
United States
Poland
Russian Federation
Ireland
Slovak Republic
England (UK)
Northern Ireland (UK)
Japan
OECD average
Slovenia
Estonia
Denmark
Austria
Australia
Canada
New Zealand
Germany
Czech Republic
Norway
Flanders (Belgium)
Netherlands
Sweden
Finland
Korea
Singapore
Level 2 Level 3 Level 2 Level 3
Young adults (16-24 year-olds) Older adults (55-65 year-olds)
%
Medium to advanced digital problem-solving skills

22. -0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
0.5
Literacy skills Numeracy skills Problem solving skills
in technology-rich
environments
Physical skills
Correlation between the employment share in high routine jobs and
average workers’ skills
Workers in high
routine jobs tend
to have low
cognitive skills Source: OECD calculations based on OECD Survey of Adult Skills (PIAAC) (2012); and Marcolin, L., S.
Miroudot and M. Squicciarini (2016), ‘Routine jobs, employment and technological innovation in
global value chains’, OECD Science, Technology and Industry Working Papers, No. 2016/01.
Workers in
high routine
jobs tend to
have high
physical skills
23
Those with higher cognitive skills are less
likely to be in routine jobs

23. 24
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
Limited share of low-
skilled workers
To participate in GVCs, ensure that participation translates into productivity
growth and limit risk of employment loss, increased inequality and poor job
quality
Developing skills To ensure that participation in GVCs translates into good economic and social
outcomes, countries need to raise skill outcomes
Advanced skills To specialise in technologically advanced industries, the quality of skills at the top
end of the skill distribution is important
Increasing
participation in GVCs
How successfully have countries extended their participation in GVCs by
importing foreign inputs for exports and producing inputs used in other countries
inputs
Specialised in
advanced industries
Specialisation in technologically advanced industries is linked to value creation,
innovation and productivity gains (revealed comparative advantage)
Increasing
specialisation in
advanced industries
How quickly has the revealed comparative advantage grown
Increasing
productivity
Increased participation in GVCs can lead to productivity gains through many
channels, including specialisation, increased competition and technology diffusion
Increasing
employment
Participation in GVCs can affect employment through both job destruction and
job creation
Improving social
outcomes
Increased integration in GVCs can affect wages and inequalities, labour-market
security and the quality of the working environment

24. Countries can shape their
specialisation within global
value chains through the
skills of their populations
25

25. 26
Change in specialisation, 2000-11: Increase Decrease
Source: OECD calculations based on the Trade in Value Added Database.
Most OECD countries have increased their specialisation in
technologically advanced industries
Decrease
in low tech.
industries
Increase in
high tech.
industries
AustraliaAustriaBelgiumCanadaChile
Czech
Republic
Denm
ark
EstoniaFinlandGerm
any
GreeceIrelandIsraelJapanKoreaNetherlands
New
Zealand
Norw
ayPolandSlovakRepublic
SloveniaSw
edenTurkeyUnited
Kingdom
United
States
Low-tech
manufacturing
Food products
Textiles
Wood
Pulp and paper
Manufacturing n.e.c
Coke, petroleum
Rubber products
Other mineral products
Basic metals
Fabricated metal products
Wholesale and retail trade
Hotels and restaurants
Transport and storage
Post and telecom.
Machinery and eq.
Electrical machinery
Motor vehicles
Chemicals
Computer, optical
Other transport eq.
Finance and insurance
Real estate activities
Renting of eq.
Computer
R&D
Low-tech
manufacturing
Medium/low-tech
manufacturing
Business
services (less
complex)
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)

26. Specialising in most technologically advanced industries
(incl. services) requires a good alignment of countries’ skills with
industries’ skills requirements
For instance, the finance and insurance industry requires :
Workers with good numeracy
skills but also managing and
communicating skills to perform
the various activities
Pools of workers with qualifications that
reflect what they can do:
Many technologically advanced industries
involve long sequences of tasks and poor
performance at any stage greatly reduces
the value of output
27

27. 30
Countries can increase specialisation within GVCs
through their skills characteristics
The effect of countries’ skills characteristics on specialisation within GVCs
Change in exports (in value added terms)
Source: OECD calculations based on the Survey of Adult Skills (PIAAC) and Trade in Value Added
Database.
0
2
4
6
8
10
12
Numeracy and literacy Literacy and problem-
solving in technology-rich
environment
Numeracy and problem-
solving in technology-rich
environment
%
Skills mix
Pools of workers
with
qualifications
reflecting what
they can doDifferences in countries to equip workers with right skill mix
can lead to differences in relative exports
• 8% between two countries with average differences in skill mix
• Up to 60% between two countries with large difference in skill mix

28. Specialisation opportunities
in complex business services, high-tech and medium high-tech manufacturing resulting
from alignment between countries skill characteristics with industry requirements
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
The revealed comparative advantage captures
countries’ specialisation in industries within global
value chains. It shows the comparative
advantage/disadvantage a country has in an industry
relative to other countries and all other industries
Revealed comparative advantage (2011RCA>1)
No revealed comparative advantage (2011RCA<1)

29. Specialisation opportunities
in complex business services, high-tech and medium high-tech manufacturing resulting
from alignment between countries skill characteristics with industry requirements
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
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changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
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changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Skills characteristic provides opportunity for specialisation
Revealed comparative advantage (2011RCA>1)
No revealed comparative advantage (2011RCA<1)

30. Specialisation opportunities
in complex business services, high-tech and medium high-tech manufacturing resulting
from alignment between countries skill characteristics with industry requirements
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Skills characteristic provides opportunity for specialisation
Skills characteristics insufficient to meet
requirements of advanced industries

31. Specialisation opportunities
in complex business services, high-tech and medium high-tech manufacturing resulting
from alignment between countries skill characteristics with industry requirements
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Skills characteristic provides opportunity for specialisation
Could explore wide spectrum of specialisation
opportunities

32. Specialisation opportunities
in complex business services, high-tech and medium high-tech manufacturing resulting
from alignment between countries skill characteristics with industry requirements
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Skills characteristic provides opportunity for specialisation
Could explore specialisation in services

33. Specialisation opportunities
in complex business services, high-tech and medium high-tech manufacturing resulting
from alignment between countries skill characteristics with industry requirements
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Revealed comparative advantage increased
Revealed comparative advantage decreased
Australia
Austria
Canada
Chile
Estonia
Finland
Germ
any
Ireland
Japan
Korea
NetherlandsNew
ZealandNorw
ay
Poland
SlovakRepublic
Slovenia
Sw
eden
Turkey
United
Kingdom
United
Stat
Technology
category Industry name
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
changeinRCA
2011RCA>1
Machinery and equipment n.e.c
Electrical mach., apparatus
n.e.c
Motor vehicle, trailers,semi-trailers
Chemicals and chemical
products
Computer, electronic, and optical
Other transport equipment
Finance and insurance
Real estate activities
Renting of machinery,
equipment
Computer and related activities
Research and development,others
Medium/high-
tech
manufacturing
High-tech
manufacturing
Business
services (more
complex)
Skills characteristic provides opportunity for specialisation
Could explore specialisation in manufacturing

34. 37
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
Limited share of low-
skilled workers
To participate in GVCs, ensure that participation translates into productivity
growth and limit risk of employment loss, increased inequality and poor job
quality
Developing skills To ensure that participation in GVCs translates into good economic and social
outcomes, countries need to raise skill outcomes
Advanced skills To specialise in technologically advanced industries, the quality of skills at the top
end of the skill distribution are important
Increasing
participation in GVCs
How successfully have countries extended their participation in GVCs by
importing foreign inputs for exports and producing inputs used in other countries
inputs
Specialised in
advanced industries
Specialisation in technologically advanced industries is linked to value creation,
innovation and productivity gains (revealed comparative advantage)
Increasing
specialisation in
advanced industries
How quickly has the revealed comparative advantage grown
Increasing
productivity
Increased participation in GVCs can lead to productivity gains through many
channels, including specialisation, increased competition and technology diffusion
Increasing
employment
Participation in GVCs can affect employment through both job destruction and
job creation
Improving social
outcomes
Increased integration in GVCs can affect wages and inequalities, labour-market
security and the quality of the working environment

35. 38
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes

36. 39
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
UK

37. 40
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
UK
Germany
Korea
Poland
Seized the benefits of GVCs by increasing participation in GVCs,
increasing specialisation in advanced industries and delivering better
outcomes

38. 41
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
UK
Germany
Korea
Poland
US
Denmark
Ireland
Increased participation in GVCs but have seen weak outcomes, in
part because of insufficient skills

39. 42
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
UK
Germany
Korea
Poland
US
Denmark
Ireland
Finland
Japan
Could benefit more from participation in GVCs by deepening
specialisation in technologically advanced industries and by
increasing productivity and employment

40. 43
Limitedshareof
low-skilledworkers
Developingskills
Advancedskills
Increasing
participationin
GVCs
Specialisedin
advancedindustries
Increasing
specialisationin
advancedindustries
Increasing
productivity
Increasing
employment
Improvingsocial
outcomes
UK
Germany
Korea
Poland
US
Denmark
Ireland
Finland
Japan
Turkey
Chile
Have increased participation in GVCs and developed skill base but
could do more to develop skills needed in advanced industries and
increase specialisation in these areas

41. Implications for education
and training policies
Implications for:
Education and
training policies
44

42. • Improve quality of education and training
• Better connect the worlds of learning and work
– Countries comparative advantage emerges from interactions between skills
characteristics and industry requirements
• Remove barriers to further skills development
– Don’t expect workers to accept they lose their jobs if they don’t feel
prepared to get or create a new one
45
Implications for skills policies

43. 180 200 220 240 260 280 300
Score
Literacy skills
in younger and older generations 55-65 to 16-24 years
Average 55-65
year-olds
Average 16-24
year-olds
Chile
Singapore
Lithuania
France
Germany
New Zealand
US
UK

44. Participation in all education and training, by
literacy level (Adults aged 25-65 years)
0
20
40
60
80
100
Levels 4/5 Level 1 or below%

45. • Improve quality of education and training
• Better connect the worlds of learning and work
– Countries comparative advantage emerges from interactions between skills
characteristics and industry requirements
• Remove barriers to further skills development
– Don’t expect workers to accept they lose their jobs if they don’t feel
prepared to get or create a new one
• Ensure relevant and reliable qualifications
– There is huge variation in the skills of people with similar qualifications
48
Implications for skills policies

46. 49
Mean literacy proficiency and distribution of
literacy scores, by educational attainment
100 125 150 175 200 225 250 275 300 325 350 375 400
Lower than upper secondary
Upper secondary
Tertiary
Italy
Score
25th
percentile
Mean
75th
percentile
Lower than upper secondary
Upper secondary
Tertiary
100 125 150 175 200 225 250 275 300 325 350 375 400
Japan
Score
Qualifications don’t always
equal skills

47. 150
170
190
210
230
250
270
290
310
330
Less than upper secondary Upper secondary Tertiary
Literacy proficiency by level
of educational attainment (25-34 year olds):

48. Equip graduates with reliable skills-based
qualifications
0
10
20
30
40
50
60
%
Percentage of young graduates from university with a low level
(level 2 or below) of numeracy skills
Tertiary-type A only, 20-34 years-old, 2012 or 2015
Source: OECD calculations based on OECD Survey of Adult Skills (PIAAC) (2012 and 2015). 51

49. • Improve quality of education and training
• Better connect the worlds of learning and work
– Countries comparative advantage emerges from interactions between skills
characteristics and industry requirements
• Remove barriers to further skills development
– Don’t expect workers to accept they lose their jobs if they don’t feel
prepared to get or create a new one
• Ensure relevant and reliable qualifications
– There is huge variation in the skills of people with similar qualifications
• Use skills more effectively
– Skills can enable countries to perform well in GVCs, but only if people are
working where they use their skills effectively
– Combine flexibility to firms with security for workers
52
Implications for skills policies

50. Use of skills at work
1.4
1.6
1.8
2
2.2
2.4
Reading at
work
Writing at
work
Numeracy at
work
ICT at work Problem
solving at
work
United States
Japan
Most frequent use = 4
Least frequent use = 0
Indexofuse

51. Labour productivity and the use of
reading skills at work
AustraliaAustria
Canada
Chile
Czech Republic
Denmark
Estonia
Finland
Flanders (Belgium)
France
Germany
Greece
Ireland
Israel
Italy
Japan
Korea
Lithuania
Netherlands
New Zealand
Norway
Poland
Russian Federation
Slovak Republic
Slovenia
Spain
Sweden
Turkey
UK
United States
Slope = 0.666
R² = 0.321
3
3.2
3.4
3.6
3.8
4
4.2
4.4
4.6
4.8
1.7 1.9 2.1 2.3 2.5 2.7 2.9 3.1 3.3
Labourproductivity(log)
Mean use of reading skills at work

52. 2.0
2.5
3.0
3.5
Reading Writing Numeracy ICT Problem solving
Indexofuse
1-10 employees 11-50 employees 51-250 employees
251-1000 employees 1000+ employees
Skills use at work, by proficiency
level, by firm size (OECD average)
Most frequent use = 5
Less frequent use = 1

53. • Improve quality of education and training
• Better connect the worlds of learning and work
– Countries comparative advantage emerges from interactions between skills
characteristics and industry requirements
• Remove barriers to further skills development
– Don’t expect workers to accept they lose their jobs if they don’t feel prepared
to get or create a new one
• Ensure relevant and reliable qualifications
– There is huge variation in the skills of people with similar qualifications
• Use skills more effectively
– Skills can enable countries to perform well in GVCs, but only if people are
working where they use their skills effectively
– Combine flexibility to firms with security for workers
• Enhance international collaboration on skills
– GVCs make it harder for countries to recoup their investment in skills
– Recognition of qualifications
– Financing arrangements that reflect the distribution and benefits of costs
across countries
56
Implications for skills policies

54. Implications for education
and training policies
Policy effort has to
go beyond education
and training policies
57

55. Adopt a whole-of-government approach
58
Co-ordinate these policies with other
policy domains:
 Industry
 Innovation
 Trade
 Investment
 And others…
Look at full range of reforms affecting
skills:
 Education and training
 Labour market
 Firms’ organisation and management
practices
 Migration
 And others…

56. 59
Firms of all sizes need investing in training….
15
10
5
0
5
10
15
% Small Medium Large
Manufacturing
Services
Investment in firm-based training, by industry and firm size, 2011-12, as % of VA in the industry
Source: OECD Science, Technology and Industry Scoreboard 2015, DOI : 10.1787/sti_scoreboard-2015-en.

57. … and financial incentives aligned for skills
development
0
2
4
6
8
10
12
14
% of wage before
education
How much earning needs to increase after education so that people
earn back the cost of an investment in lifelong learning
Source: OECD (2017), Taxation and Skills, OECD Tax Policy Studies, No. 24.
Financial
incentives are low
60

58. Countries need to cooperate on education,
training, and innovation policies
Share of international or foreign students by level of tertiary education
2014
International students Foreign students
Some countries have
substantial share of
foreign students in
tertiary education
Source: OECD (2016), Education at a Glance 2016: OECD Indicators.
61

59. Countries can shape their potential to be part of
global education, innovation and research networks
Source: OECD, STI Micro-data Lab: Intellectual Property Database, http://oe.cd/ipstats, June
2015; OECD and SCImago Research Group (CSIC), Compendium of Bibliometric Science . 62
ARG
AUS
BRA
CAN
CHN
FRA
DEU
IND
IDN
ITA
JPN
KOR
MEX
RUS
SAU
ZAF
TUR
GBR
USA
0
10
20
30
40
50
0 25 50 75
International co-inventions (%)
International co-authorship (%)
G20 countries Other OECD countries
Co-inventions
countries' median
Co-authorship
countries' median

60. Implications for education
and training policies
Implications for:
Education and
training policies
63
Making global value chains work for all
Invest in skills
Adopt a whole-of
government approach to
skills
Co-ordinate this effort
with other policies
Develop international
cooperation
Equip the population with strong mixes of skills, well
signalled by qualifications, aligned with industries’ needs
Coordinate education, training, labour market, migration and
other policies affecting the development and use of skills
Align skills policies with trade, investment, innovation, and
industry policies to make the most of GVCs
As production, education, and innovation become
internationalised, countries need to better co-operate on
their policies

61. Find Out More at:
http://bit.ly/skillsout17
64
Email
Andrew.Wyckoff@OECD.org
Twitter
@OECDinnovation