As China rebalances its economy, some are concerned that the expected slowdown in investment might lead to job losses.
Yin Weimin, minister for human resources and social security, told a news conference on February 29 that 1.3 million workers in the coal sector could lose jobs, plus 500,000 from the steel sector. Meanwhile, Xiao Yaqing, head of the State-owned Assets Supervision and Administration Commission of the State Council, said that "Protecting the interests of SOE employees will be a major task in the next step."
Having spent over a decade observing China's economy and markets from within, I believe it is investment in soft skills which will pave the way for a more sustainable, inclusive recovery path for the nation. While there has been an occasional clamor for industry and government to do so, the urgency has only now been felt.
The transition from a manufacturing, export-oriented economy to a services, high-technology and consumption led economy cannot happen without the right skill set. Unfortunately, the education system has failed to evolve with the needs of the job market. It has been estimated that the demand for skilled workers is likely to outstrip supply by 24 million (16 million vocational and 8 million university graduates) by 2020. China's demographic trend is set to aggravate the talent shortage: its youth population is shrinking fast, while the number of aging citizens is rising by leaps and bounds.
Businesses — whether they be domestic firms, multinational corporations or state-owned enterprises — cannot wait. They need to take remedial action themselves, not wait for the deeply indebted local governments to create or revamp the educational infrastructure.
Fortunately, the drive to succeed already exists amongst the young Chinese workforce. They are eager for responsibility, career advancement and material success in order to support themselves and their aging, dependent families. What they often lack are the key qualities for success in the new economy: teamwork and creativity. They are deficient in these qualities for no fault of theirs. Being raised as single children, they are poorly equipped in social and relational skills.
Initiative and teamwork
The educational system straitjackets them into convention, rote-learning and defined educational and career choices, with creative pursuits such as music or art being added on outside the school system by parents prescient enough to provide a safety net.
I believe that the sweet spot for developing soft skills lies in the 17-20 year-age band, when young people are developing a sense of identity, and are challenging themselves. This is when firms should start enabling potential workers with the skills that are imperative in the new economy: initiative and entrepreneurship, collaboration and teamwork, problem solving and critical thinking, creativity and imagination.
The business opportunity for this lies both within China and overseas. The SOE administration could deploy its senior managers and workers, who are now under threat of layoff, into teambuilding and training. Successful Chinese entrepreneurs might offer online courses on the basics of setting up a business, and converting ideas into businesses. Consumer goods and professional service firms could train them on the basics of brand building and relationship management. Foreign and local innovation gurus would do well by tweaking their workshop content to a younger audience and offering such content as adjunct training to university programs.
The time to focus on soft skills is now. It may provide business and industry the competitive advantage they seek in their quest for growth and relevance.
Kunal Sinha has over 25 years of experience unearthing and commenting on consumer and cultural trends. Based in Shanghai, he is the author of two books about creativity in business: "China's Creative Imperative," and "Raw: Pervasive Creativity in Asia."
