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Chile needs better workforce education for recovery

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Staff writer ▼ | February 2, 2016
Chile workers
Gallup   Accumulating human capital and maximizing the talents and skills

Nearly every major economy in Latin America, including Chile as the wealthiest, is either slowing down or shrinking.

This downward spiral effectively signals the end of Latin America's recent economic boom.

Nearly four in 10 employed Chileans (39%) are engaged at work.
Like most countries in the region, Chile has vast reserves of natural resources, and despite its attempts to diversify its economy, its continued dependence on them has kept the country vulnerable to fluctuations in the global economy.

The price of copper, Chile's main export, has plummeted in the past several years as demand from the world's biggest consumer of the metal, China, has dropped. As a result, Chile's growth in 2014 was its slowest in five years, and the country has struggled to rebound since, as investment stagnates and consumer spending remains weak.

However, Chile may be better positioned than most countries in Latin America to endure this economic downturn.

Not only has the country benefited from strong institutional stability in recent decades, it has also forged important trade alliances with much of the world, and is arguably one of the region's most open and investment-friendly economies.

But some of Chile's best opportunities to boost productivity may lie in accumulating human capital and maximizing the talents and skills of its existing workforce - which the Organization for Economic Cooperation and Development (OECD) identifies as major obstacles to improving productivity at Chilean firms.

In fact, the OECD advises that more systematic investment in the development of Chile's human capital is definitely in order. In this regard, Chile has strong foundations that it can build on.

Access to education in the country is already broader and better than the average in Latin America, which is a decided plus as Chile seeks to improve its human capital. However, Chile's educational system still needs more investment.

Chile's workplaces continue to lack sufficient quantities of well-trained workers with higher education, which is exactly the type of advanced human capital that these businesses rely on for innovation and research and development.

Chileans themselves likely see the need for such investment; Gallup surveys in 2014 showed the majority (51%) of residents are dissatisfied with the educational system or the schools in their communities.

Chile also stands to benefit from having one of the most engaged workforces in Latin America, according to Gallup's studies of workers in the region and around the world.

Based on people's answers to questions that - according to 30 years of Gallup research - best predict employee and workgroup performance, Gallup categorizes workers as engaged, not engaged or actively disengaged.

Nearly four in 10 employed Chileans (39%) are engaged at work, easily outdistancing the regional average (29%).

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