As Sri Lanka moves from a factor-driven to an efficiency-driven economy, its workforce is shrinking even as demand for skills―especially sophisticated skills―is rising. Unfortunately, Sri Lanka has been slow to expand technical and vocational education and training (TVET) and tertiary education. Responsibility for TVET is fragmented; the system is supply-driven; there is a shortage of reliable information on labor market skills demand and supply; employers are sidelined; and the resources invested are not linked to performance.
The MC recognizes the severity of the skills constraint and highlights the importance of investing in workforce skills to raise both productivity and competitiveness. This report analyzes skills demand and supply in Sri Lanka and scrutinizes how skills are formed, the factors shaping skills demand, and the responsiveness of the system. Finally, it offers suggestions for how skills development can be improved so that Sri Lanka can meet its economic growth and poverty reduction goals.
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