Benchmarking – Chapter 3.3
Chapter 3
Canada and the G8 Indicators: Detailed Ranking of Canada’s Low-Carbon Performance
3.3 Skills Category
CANADA RANKS 1ST IN THE SKILLS CATEGORY. WHY THIS MATTERS:
The transition to a low-carbon economy will demand new skills and expertise as existing industries and firms adjust and new ones emerge. Nations need to ensure that the education and skills profiles of their populations match the skills requirements and recruitment needs of new low-carbon industries and businesses. Countries’ commitments to spending on higher education, combined with a strong educational infrastructure for training in required disciplines, will have important implications for their ability to exploit these benefits. The types of skills required will range from management expertise in firms diving into new low-carbon markets to welders and pipefitters necessary to build the required energy infrastructure. As the Government of the United Kingdom highlighted in its 2009 Low-Carbon Industrial Strategy[37] and Low-Carbon Transition Plan[38], most jobs will require some understanding of energy or resource efficiency, or low-carbon technologies and processes. Nations need to ensure that they are able to supply the right skills in the right place in time to fully exploit the benefits from the move to a global low-carbon economy.
While it has been estimated that, by 2050, low-carbon jobs could employ more than 25 million people worldwide[39], no consensus exists regarding the definition of what constitutes a low-carbon or “green” job. This makes it difficult to track job creation or identify indicators that are specific to skills development in this context. Research to date suggests that a wide array of occupations, skills, and income levels are included in the scope of “green jobs.” Beyond broad level indicators related to employment, education, and labour force trends, data gaps create challenges for assessing capacity to support emerging low-carbon industries. The NRTEE agrees that “effective policy for skills and employment requires a much deeper understanding of the nature of the transition and of the skills that will be necessary to transform our economy.” [40] Although data collection for education and skills development needs to be improved, the following set of indicators assesses capacity for broadly applicable skills required in a low-carbon economy.
THE INDICATORS
Three indicators were selected for the Skills category:
// NUMBER OF SUSTAINABILITY MBA PROGRAMS
// SHARE OF LOW-CARBON TECHNICAL GRADUATES
// POST-SECONDARY EDUCATION SPENDING PER STUDENT AS A SHARE OF GDP PER CAPITA
Number of Sustainability MBA Programs Indicator
NUMBER OF SUSTAINABILITY MBA PROGRAMS represents a proxy for the production of skilled managers adept at understanding business needs through the lens of sustainable development, ensuring their firms prosper and grow as part of a low-carbon economic transition. This indicator uses data generated by the Aspen Institute[41] and normalizes it by population.
This indicator is a measure of a country’s ability to develop the future workforce with graduates that combine business managerial skills and low-carbon knowledge. The emergence of new technologies and related goods and services will require new firms and new business models to support their development and deployment. Comparative advantage in low-carbon, resource-efficient companies is critical for competitive success in a carbon-constrained future. Entrepreneurship and innovation have been identified as key success factors for developing this comparative advantage.[42]
As the U.K.’s Climate Change Task Force concluded, relevant business skills for a low-carbon context will be important.[43] Many schools have MBA programs devoted to equipping business students with the ability to apply sustainability concepts and thinking. While there is disparity between curricula in sustainability MBA programs—affecting quality and comparability between countries and institutions—this indicator still helps to shed light on the level of emphasis placed on sustainable development in business schools.
Canada ranks second on this indicator, some distance behind the U.S. and slightly ahead of the U.K. In absolute terms, the U.S. has nearly ten times more sustainability MBA programs than Canada—indeed the rest of the G8—reinforcing its strong business and managerial culture and expertise. Canada has more sustainability MBA programs than countries such as the U.K., France, and Germany despite their larger populations, as illustrated in Figure 12. The results of this indicator are perhaps reflective of such business management programs being part of a more North American phenomenon.
Share of Low-Carbon Technical Graduates Indicator
SHARE OF LOW-CARBON TECHNICAL GRADUATES is a measure of the technical profile of university graduates within a nation’s post-secondary institutions, and thus a gauge for its ability to meet the low-carbon skills needs of the future. It is defined as the total number of university and college graduates from the disciplines of science, engineering, manufacturing, and construction divided by the total number of graduates.
Technology development and deployment will be important to a low-carbon transition; therefore, skills in these identified subject areas are critical. Low-carbon economy consultation sessions in the U.K. led to the acknowledgement that “education in the so-called STEM subjects (science, technology, engineering, and maths) would be enormously important” in the transition to a low-carbon economy.[44] This indicator provides comparisons across countries in the more focused “science and technology” disciplines.
Canada ranks seventh in this indicator; we had 21% of our post-secondary graduates being equipped with technical skills in 2002, the last year for which data incorporating Canadian data was available. There are distinct performance clusters for this indicator. Germany and France lead the G8 with over one-quarter of university graduates coming from technical disciplines; Russia follows closely behind. A second mid-tier group of countries comprising the U.K., Italy, Japan, and Canada has, on average, one-third fewer technical graduates than the leadership group. The lowest performer is the U.S., with only 16% of its 2006 post-secondary graduates being equipped with technical skills.
Between 2000 and 2006, all G8 countries except Germany and Russia experienced a decline in graduates of technical disciplines, as shown in Figure 13. Canada is omitted due to the fact that data is only available for 2002.
This indicator comprises graduates from disciplines that are compatible to a country’s ability to transition to a low-carbon economy. However, no international comparative data exists that indicates the future orientation of these graduates; specifically, whether these graduates contribute to low-carbon growth through the job market in their respective country.
Post-Secondary Education Spending Per Student as a Share of GDP per Capita Indicator
POST-SECONDARY EDUCATION SPENDING PER STUDENT AS A SHARE OF GDP PER CAPITA is a leading indicator of a nation’s ability to generate economic growth through human capital. It is an indicator of general application (not focused specifically on low-carbon) but provides an indication of a nation’s propensity to invest in higher education and to develop higher levels of skills that will be important in a low-carbon future.
This indicator captures public investment in post-secondary education including universities, polytechnical institutions, and colleges. It does not capture private educational and training programs, which will also be important in a low-carbon economy —especially for those already employed—but which are difficult to track given the confidential nature of their data.
Canada ranks first on this indicator among the G8; its share of investment is 50% larger than France’s, and nearly double that of the U.S. This should provide a solid basis for graduating and training the right kinds of educated Canadians for the necessary low-carbon transition. However, the results must be read in conjunction with the previous indicator of numbers of graduates with low-carbon skills. A deeper examination of the data suggests that Canada may still face challenges in the years ahead due to its low proportion of graduates in low-carbon skills areas. While relatively significant post-secondary funding support is provided overall, it may not be directed at developing skills in areas of importance for a low-carbon economy. Skills required to develop, produce, and install new technologies “take a long time to develop and action is required now to achieve the step change required to meet climate change targets.” [45] Incorporating data on private education spending by other countries could also erode Canada’s ranking.
Over most of the past decade, the G8 countries experienced decreased spending rates overall, primarily due to budgetary pressures, as illustrated in Figure 14. Canada’s decline matched the worst G8 performer—the U.S. The global economic crisis has likely
exacerbated budget pressures within all governments to reduce funding even further. While Canada may be able to keep up its relative position in this indicator by virtue of other countries’ decline in funding, this trajectory is not consistent with the achievement of increases in human capital and skills needed for a low-carbon, knowledge-based economy. Some of this has been moderated with increased federal fiscal transfers to provinces for post-secondary education since 2006. The U.K., meanwhile, outpaced Canada and grew its level of investment by 16%. Taken together with its commitment to develop a low-carbon skills strategy, the U.K. is positioning itself strongly to build capacity for the skills demands of a low-carbon future.
© 2013