Concept Paper for YES Open Sessions –EDC /USAID GWIT Project
USAID-GWIT: Global Workforce In Transition: a USAID project to rapidly increase the
competitiveness of selected industry clusters in developing nations.
USAID, the US Agency for International Development, has created in Indefinite Quantity Contract
(IQC) of up to $35 million to help societies in developing nations develop local strategies to acquire
and use the skills, behaviors, and technologies needed to compete successfully in the global economy.
The project intends to support USAID Missions and developing nations in the following ways:
1. Grow globally competitive industry clusters that include education and training providers
2. Provide innovative approaches to skill development, customized for different environments
3. Make available demand and supply side strategies and tools to provide rapid employment and
The project will focus on workforce development issues related to health crises such as HIV-AIDS,
economic growth and trade, societies emerging from conflict, youth employment, entrepreneurship and
the support of small and medium-sized enterprises, and better education for employment. Project staff
will work collaboratively with the USAID GWIT Team to assist host country governments, private organizations, NGOs, trade unions, education institutions, USAID Missions, and other international
organizations in assessing, designing, implementing, and evaluating workforce development programs.
Our focus will be on improving the sustainability of host country capacity to develop and implement
their own strategies for workforce development.
How to Participate
The GWIT project provides a contract mechanism that allows USAID Missions in developing
countries to financially support workforce development projects in their countries. EDC Inc is the
contractor for the project, in partnership with an extensive network of consultants and organizations
around the world. To participate, countries should contact their USAID Mission or the USAID Global
Office in Washington, DC.
Nearly a billion people (roughly 30% of the world’s labor force) are either underemployed or have
such low level jobs that they cannot support themselves or their families. Studies on competitiveness
(Porter and others) document that increasing the income earning potential of a country’s citizens is
directly linked to increasing their skill levels.
In most developing countries, workforce development, or how a country develops its human resources
so that its citizens can participate in the global economy, is a process that is often poorly understood
by leaders and citizens alike. It is poorly understood because an effective system depends on the
quality of the relationships among the various stakeholder groups. Developing an effective workforce
system requires leaders who are able to bring together the private and public sector with non-
governmental organizations, donors, and citizens. Such leaders recognize that a part of their job is to
shore up the linkages – to build trust, empowering stakeholders to work together. Such relationships cannot be imposed by outsiders, no matter how well intentioned. For a variety of historical and
cultural reasons, in most developing countries, relationships among stakeholders are fractured, and the
foundation is too weak to support a system that can adapt to rapid, constant changes. Often there is a
real, historical evidence of why it is not safe to trust others.
Recognizing the problem, most of the world’s donor organizations, including the World Bank, the
Asian Development Bank, and USAID, are taking steps to build stakeholder relationships in their
workforce development projects. However, most development experts are trained to come into a
country and make recommendations on what to do. These recommendations often become the basis
for development assistance. Donors also often make investments in one part of the workforce
development system, such as basic education, without linking it to other investments in other parts of
the system, for example, job creation, so that the labor market can function more effectively. Trapped
inside their own bureaucratic structures, loan officers from such organizations often specify detailed
Terms of Reference, much like criteria for building a bridge, without investing in shoring up the
invisible, underlying connections that constitute social capital.
Issues to be discussed:
1. increasing the earnings and skill levels of low income communities in developing nations
requires a fundamental reshaping of how business approaches the vast untapped potential of the
bottom of the human pyramid. We will share the Uni-Lever example from India. Since it is impossible to approach improvements in skill, or workforce development without considering
the role of business in the process, we propose to engage the most innovative thinkers and
corporate leaders to help chart a bold new path leading to job and workforce development in
ways that meet their bottom line interests while growing sustainable economies in Mission
countries. How can this project help grow initiatives that demonstrate how imagination, and
creativity can move low income people from the unorganized to an organized cluster. We will
explore a number of innovative approaches, including the use of the internet to form new, cross-
national labor markets, providing jobs and skills for workers in poor countries.
2. the new, global economy requires a new approach. The new global economy, which has
grown to resemble ecology of organizations – is a network of economies linked by information
technology – a network whose members constantly groups and regroups, creating and shifting
alliances in multiple ways to capture emerging market opportunities.
1 This is a very different
picture from the static models of entrenched industries which dominate markets and remain
stable over a long time. In the old economy model, for example, a four or five star hotel would
rely on a group of travel agencies and schools teaching hospitality programs to service a steady
stream of customers. In the new global economy, on the other hand, the same hotels use
information technologies to partner with various tour brokers, transportation services, guides,
and other hotel/restaurant/and ancillary services to provide an ever changing set of vacation
experiences for sophisticated tourists. If one of the links in the chain (say a limo service)
delivers poor quality service, the entire chain will be negatively affected. We will discuss
specific WFD strategies that help industries link to the new global economy.
1 Kevin Kelly. 10 Rules for the New Economy. Penguin Books, 1999.
Globalization entails the instant flow of capital, information, and technologies across borders, 2institutions and people. Globalization creates both opportunities as well as challenges for
countries. Globalization is a major factor in motivating countries to invest in the development of
their human capital – their current and future workforce. A focus on competitiveness, in the
context of globalization, can stimulate interest in, and commitment to workforce development
within private sector firms. This is because globalization and competitiveness tend to force
industries to focus on more sophisticated market-based strategies that, while profitable, also
require new investment in human resources. For example, the tourism industry in many countries
is moving from a low-end charter-based sun and sand set of services to higher end cultural adventure and/or eco-tourism. This shift in market strategy requires greater investment in
training for tour guides, customer care specialists, and logistics managers.
We will discuss how EDC’s work under GWIT will help countries address globalization issues
in several ways; for example: (a) by helping stakeholder groups benchmark best practices in
countries around the world; and (b) by facilitating access by interested countries to global
technology-based learning opportunities, e.g. on-line just-in-time and on-demand learning
EDC believes that improving productivity – and the performance of specific industry clusters in global markets - is critical for creating and sustaining a higher standard of living for citizens
within a country. A nation’s standard of living is driven by rising productivity based on its stock
of the seven forms of capital: cultural, human, knowledge, institutional, financial, man-made,
and natural endowments.
3Productivity can be viewed as a reflection of how well stakeholders
within a cluster work together to satisfy each other’s and their customers’ needs.
How Does Wealth Actually Get Created?
Wealth for theEconomic GrowthNationSocial Equity
Capacity to exportInvestment in Human
3 This has been amply covered in both Michael Porter’s book on Competitiveness and the more recent book on the
subject, Ploughing the Sea: Nurturing the Hidden Sources of Growth in the Developing World, Michael Fairbanks, Stacy
Lindsay, Michael E. Porter, Harvard Business School Press, 1997.
4Instead of depending on comparative advantage – exporting natural resources which has made a
number of developing nations poorer over time - nations must pursue competitive advantage –
creating high value-added products and services for export. This requires highly skilled people
as well as other resources. Comparative advantage depends on assets, or natural endowments.
Competitive advantage depends on the ability to think and act strategically, while focusing on
the customer’s current and future needs. EDC will explore how we will assist countries in
achieving competitive advantage by helping government agencies, industry clusters, and
educational institutions to cross boundaries of turf, budgets, and prestige to cooperate on efforts
to reform educational policy and improve access to high quality workforce training.
5. Industry clusters. Developing flexible skills that can capture emerging market opportunities
is best accomplished in the context of industry clusters. Clusters are a form of social
organization that provides the critical ingredients needed for competitive performance: trust,
relationships, information, and a shared understanding of the future. Education and training
providers, whether public or privately funded, must be included in clusters. They need
opportunities to understand the skills firms need for productive performance. GWIT’s tools to
build cluster capacity, such as the Workforce Diagnostic process and its related protocols, such
as SWOT analysis, mapping tools, interview protocols,
5 help analyze the “skills value chain”
that helps clusters build the capacity for global competitive performance.
EDC’s work under GWIT will assist in the formation of industry clusters and facilitate increased
cooperation among stakeholders in a way that helps sustain reform efforts over time. For
example, we can help to structure mechanisms, such as a cluster-based national workforce
development boards, which can institutionalize the inter-sectoral linkages needed for competitive
workforce development strategies in various industry clusters. How will we know when clusters
are performing effectively? We would see cluster stakeholders (coming from large and small
firms, education and training institutions, NGOs, public sector officials, unions, workers’
councils) demonstrate the following behaviors:
? Have a shared vision and commitment to achieving cluster competitiveness while building
? Have clear action strategies for achieving the vision
? Allocate and mobilize the needed resources
? Implement activities to produce the desired outcomes
? Contribute to the knowledge base in their cluster
? Operate increasingly in a climate of trust, cooperation, and continual learning, turning
information into knowledge that can be embedded in unique products and services that can
compete in the global economy
? Have increasingly sophisticated strategies for achieving competitive advantage
? Form partnerships and networks to learn from the experience of other countries
? Institutionalize the reform process (forming an organization or housing it institutionally)
? Have powerful strategies that bring the un- or underemployed into the formal labor market
? Continuously assess and evaluate the progress of various reforms
6. Developing resilient, portable skills. For those firms in Mission countries who are connected
to the global economy, turbulence and uncertainty rule the day. Their markets are characterized
4 Reprinted with permission from On the Frontier. 5 GWIT Workforce Development Reports, Egypt, South Africa, Sri Lanka, prepared by PWC, 1999 and 2000.
by flux and uncertainty. Moreover, the economic and political stability that is needed to develop
and sustain competitive performance varies in different countries and regions of the world.
Churning in the labor market is the only reliable constant as markets for products and services
continue to form and reform. Promising approaches, models, and tools must therefore be
flexible, differentiated, and usable in many different environments, as different Mission countries
will need different approaches to skill development. In a previous contract with USAID’s Global Bureau, EDC developed an extensive review of what models, tools, and approaches constitute
effective workforce development. Our 20 Best-Practice case studies demonstrate the nine
principles that characterize effective, demand driven approaches in all parts of the world. 6
EDC has developed a Workforce Development Readiness Profiler Tool that helps Mission staff
and other policy makers assess what types of approaches, models, or tools will work best in their
setting. This Profiler, described in Section #1 of our Proposal for Task Order #1, includes a four-
country typology based on two variables: economic and social stability, and degree of
industrialization (economic development) 7. This typology places Mission countries in one of
four scenarios. We expect that a focus on building the capacity of industry clusters at national
levels (using traditional business approaches) is likely to work in two of the four scenarios.
7. Workforce development in countries that are less stable and less industrialized: We will
explore how countries with little industrialization or low economic/political stability may lack
the enabling environment required for globally competitive performance. The EDC team
believes that these countries, especially, are at risk of falling prey to rogue dictators who will
exploit their people’s hopelessness and poverty to gain their political ends. We plan to explore
how, in less developed countries, stakeholders can draw on strategies, models, and tools
developed by EDC, its partners, and many others in Africa, Asia, and Latin America..
6 Compass to Workforce Development. A Best Practice Study of Demand Driven, Public Private Partnerships for
Workforce Development. EDC. 1996. Under contract to USAID, Global Bureau, Human Capacity Center. 7 These variables are also discussed in various PWC documents (Egypt and South Africa reports.