In our times the main carrier of economic change is the knowledge economy Knowledge flows globally and unequally, unchecked and instantly, so that as a banker clicks the computer in Frankfurt, capital moves in Tokyo. An order arrives in London production schedules change in Bangkok. Geographic boundaries have not disappeared politically but they are eroding economically. Some countries, firms and workers are taking extraordinary advantage of the opportunities generated by globalization, while others are suffering from it. When looking at Asia, we see that a number of countries, despite the economic crisis in the late 1990s, has been and are at the forefront of making use of the opportunities generated.

The knowledge economy has flourished, driven by the communications revolution that has released information from spatial and temporal constraints. The knowledge economy is now also a networking economy. Like the shift from the agrarian to the industrial economy, the rise of the knowledge economy is changing many of our assumptions and transforming the world of work Preparing workers for the changes that the knowledge economy creates is a major task for governments, for the unions, and for industries. Making this process safer for the workers and all of us has become a major pre-occupation after 11 September.

The changes are large, we see striking new economic and social phenomena in the knowledge economy. They include new types of firms and competitive strategies, new ways to interact and also new education and training possibilities. Is the promise of the knowledge economy too good to be true? The opportunities are clearly enormous - the knowledge economy is widening and upgrading skills Most ICT-intensive enterprises need workers with multiple skills On the other hand progress is uneven between countries and regions. There is even fear that ICT may lead to some de-skilling. It may also lead to de-skilling if personalized knowledge is devalued Many people lack the knowledge of the qualifications, or cannot adapt to change Older workers may not be given a chance. Young people have to build careers in a turbulent, fragmented and shifting labour market.

The challenge therefore is to make the knowledge economy a socially just economy, a source of inclusion and equality, where rights are respected and peoples' needs are met.

From the ILO's perspective, education, skills and learning were always high on the priority list In the knowledge economy they become the prime determinants of success or failure inclusion or exclusion.

When we look at the general picture, we see skill shortages emerging in many industrialized countries The OECD estimated 600,000 vacancies worldwide for workers with ICT skills Training systems have to respond fast if business is not to be stifled But the need for education and training applies not only to technology specialists, but also across the board. Everyone, young and old have to cope with new demands. And as the pace of change accelerates, this means constant renewal of skills throughout life. Life-long learning in the knowledge economy is intrinsically linked with long-term productivity and worker mobility. Yet at present, no society h as in place really effective institutions for learning beyond the age of twenty-five. Public policies are needed to ensure that the social and economic goals are simultaneously achieved. If nothing is done, it is most likely that the countries with the best-educated people will benefit most. A major new effort is required to support education systems in the developing world. The ILO World Employment Report 2001 has examined some of these challenges and some of its results are reported in the following sections.

Literacy and Basic Education

First we need to focus on the main bottleneck - difficulties in literacy and basic Education. Education, after all, is one of the most important contributions that governments can make to ensure participation in the network knowledge economy.

In many industrialized countries, such as the Republic of Korea and Singapore, efforts have been made to equip schools with computers and connect them to local networks and the Internet In the OECD area, massive investment (some US$ 16 billion annually, but still only I to 2 percent of all education spending) goes into ICT hardware and software for schools. The United States now spends more on ICT than on books and other printed material. Access to the Internet in secondary schools is becoming universal in the OECD area.

Connectivity in schools has only recently been addressed even in the world's wealthiest countries. In the world's poorest, it is a distant reality. Improving the quality of education and increasing enrolment in schools remain the fundamental goals in many developing countries There is little information on the extent of connectivity in schools in developing countries. A 1999 survey found that only 50 percent of schools have electricity, and only 7 5 percent have the necessary infrastructure to support an Internet host. The poor communications infrastructure in low-income countries, inadequate and unreliable electricity and telephone networks, and high telecommunications costs are formidable obstacles to connectivity. Add to this the very low household incomes, a resource poor public education system, a dearth of appropriate learning materials and teachers equipped to support a digital literacy programme, and the likelihood of access to the information society is bleak. Changing this course could occur only with a radical redirection of education policy and increased public investment, supported by substantial financial and technical resources In contrast, some of the rapidly growing middle-income countries, such as Malaysia and Thailand, are making good progress in connecting their schools to the Internet.

Schools have a major task of "democratizing" access to the Internet, thereby correcting the disparities in home access, which are based largely on income. In the U.S., many programmes have targeted schools in poorer areas In Australia, the government funds an educational community access pilot project in rural areas for the socio-economically disadvantaged In Malaysia, in a collaborative effort by the government, international development agencies and the private sector, a Mobile Internet Unit provides basic digital literacy programmes that target "non-mainstream" schools Nevertheless, in many low-income countries where there are major deficiencies in the education system, access remains elusive The majority of the people have had no exposure to the Internet.

A partial, although promising solution is community-based learning centres which are springing up in many parts of the world Their sponsors vary - governments, donors, private enterprise, NGOs, and charity organizations are all involved.

Simultaneously, barriers to entry to traditional education systems are now being lowered through the communications revolution. Rich, interactive "distance learning" offers those who have access to it a vast array of information and contacts with teachers and others Distance learning can be a powerful multiplier to school system where these lack resources in money books and teachers. Distance learning is generating new, often global partnerships between traditional and new "virtual" educational institutions, governments, enterprises and international and non-governmental organizations. Although many developing countries still has limited access to these technologies, major investments in telecommunications and information systems may dramatically improve access over time.

The Skills Challenge

In the knowledge economy workers increasingly need higher levels of education, as well as various abilities and behavioral characteristics that help them adapt to rapidly changing work and social environments People's ability to find and retain a job has much to do with the possession of "foundation skills" that need to be regularly updated and supported with specific skills through training and lifelong processes.

ICT is a leading growth sector in the industrialized economies. It stands to reason, then that the greatest demand for skills is also in this core sector of the communications revolution. One estimate for the U S finds that the demand for ICT skills is three times greater in the ICT sector can give a misleading impression of the overall demand for such skills In the vast majority of the OECD countries, the ICT sector employs no more than 5 percent of the workforce. On the other hand, while employing a relatively small share of the total workforce the ICT sector is nevertheless the engine of growth in several industrialized countries, contributing a disproportionate share of overall GDP Growth. Skill shortages in that sector, therefore, are a brake on growth. There is an important conclusion to draw, notwithstanding. In volume, the greatest demand for ICT-related skills is economy-wide, not just in the ICT sector. Thus, the most important challenge is the provision of ICT skills ~n the on-ICT sectors, the economy as a whole.

Beyond numbers, it has proven exceedingly difficult to define the skills in demand It is equally difficult to know just how workers obtain their skills - particularly in some of the most recent applications of networking or software development. What is clear is that those working in ICT-related fields often have not acquired any specific qualifications to do so through education or training programmes. While they may have the immediate technology related skills, a number of industry surveys demonstrate that graduates are not "work-ready": they often lack the management, problem-solving, and interpersonal skills needed for being effective on the job. There is increasing demand for people who combine the latest technical knowledge and problem-solving ability with good communications skills. Across a broad range of occupations, a blend of computer-specific skills with business or other knowledge-specific to be particular field is now common and needs to rapidly find its way into curricula.

About 70 percent of the workforce uses some form of ICT. The existence of an "ICT revolution" in the workplace appears to be found among workers who are younger, with more formal education, with responsibility who work fulltime in larger organizations, commanding higher pay, in the financial and business services sector and in managerial, professional or clerical positions. And many appear to be women. This is not surprising for the most intensive use of ICT devices on the job is concentrated among clerical and administrative staff, the majority of whom are women. This raises serious issues of equality.

Available evidence suggests that people acquire the skills they need on the job from a variety of sources, beginning with their formal education. For example, the majority who enter the ICT and ICT-related sector do so through a three- or four-year university degree obtained in fields such as electrical engineering. The problem here is "up-stream" - the limited supply of students in mathematics and physics. The low percentage of women enrolling in electrical engineering and IT-related subjects is particularly evident. In developing countries, the skills profile of ICT workers is similar to that of the developed countries. For example, approximately 75 percent of those employed by the software companies in India are engineering graduates.

Enterprises can either invest in the training of their own workforce or purchase the skills they need from the market. In those enterprises in which ICT is the core business, they do both. The reason is the decline in product life cycles and the rising importance of time-to-market in the most intensely competitive markets Leading-edge companies make significant investments in training At IBM and Nokia, for example, approximately 15 out of a total of 200 working days per year are typically spent learning new skills When an enterprise is faced with a product life cycle as short as six months, a training period of even six weeks represents one-quarter of the time to market. Hence, search for ready-made "talent" is also on the rise, as this allows economies of time to be made.

In many countries, both the access to and the content of training are the outcome of social dialogue between trade unions and employers' organizations, with or without the presence of government. The negotiation of training occurs at enterprise, industry or national tripartite levels. Trade unions have long had training among their core services and functions.

There are clear signs that some trade unions are placing continued training high on the list of services they offer, as well as at the bargaining table Thus, trying to boost employability along with job security.

This mirrors the need for lifelong learning as a requirement for all people In fact, it can be argued that lifelong learning is becoming as important an entitlement for today's employee as the right to a pension became in the past For example, evidence from India shows that unions have begun to take up the issue of training for new technologies.

Many firms such as Motorola view training not merely in relation to the product development needs of the firm, but as a policy for attracting and retaining the best people. Employees at the cutting edge of the ICT field are highly motivated to keep up to date with the latest technologies, have very marketable skills, and use their employment as a means of further developing these skills- IBM seeks to create a learning environment conducive to retaining its employees, but the firm acknowledges that there will always be qualified people who leave With these "alumni" IBM nevertheless tries to keep contact, since with the greater mobility of some skills, employees could always return, and teamwork in any case can span the boundaries of any firm.

SMES have limited capacity to engage in the kind of training that may be needed to address their skills shortages, or indeed in any training at all. For small firms, the cost of carrying a less-than-fully productive employee for six months or a year is often too great a burden on their limited resources. Rather than developing their own skills, they purchase them from the labour market, attempting to hire workers away from other companies in related fields. This in turn results in firms' outbidding one another for an existing pool of skilled workers instead of joining in cooperative efforts to enlarge the overall pool.

The development of basic technological skills is the pre-employment responsibility of the government and the individual. A major issue in that development, however, is the slow reform of public-sector education and training. The traditional higher education system is constrained by its inability to change direction quickly. When there is a strong demand for new courses and combinations of courses, the development and accreditation of these courses can take up to three years. This is indeed long, in terms of "Internet-time". This is one reason why public-private partnerships in the area of education and training are on the rise. Nokia has been instrumental in building up ICT training institutes in China and South Africa (the South African Telecommunications Institute), for example. In a partnership with the United Nations Development Programme (UNDP), Cisco Systems is also active in the promotion of education and training as a means of narrowing the digital divide.

The ICT industry 1las an obvious stake in closing t he skills gap. In Europe, major LCT companies have joined farces by creating a Skills Consortium through which to undertake a pilot project. The aim is to create a framework for students, education and training institutions and governments that defines and delivers the skills and competencies required by Europe's ICT industry.

In conclusion, education and training are fundamental in a knowledge economy. It is probable that inadequacies in education and training have always been brakes on economic growth. They have arguably become more so in the digital age. This is because many of the benefits to come from the communications revolution depend upon the use of the greater flows of information to create new knowledge Places with higher levels of education, school systems in which not merely facts are relayed but in which students learn how to learn through the new technologies, and enterprises in which continuous learning is both encouraged and expected will be favoured in the digital age. For this to occur, institutions need to adapt, and the full range of labour market institutions also need to change too.

The global economy is often presented as a fait accompli in which is nothing one can do but adapt. This is not the case, and training for the knowledge economy is a case in point. Training is a dialectical process between the trainee and the trainor, between the individual and the firm. Unions influence training structures and contents, by industry, and by governments. This is an important entry point for values, for what we call dignity at work, for concerns of equity and equality. In doing so, we will promote a globalized knowledge economy which actually works better for workers and their families.

Beyond training, what can we do to promote this goal? I believe we need to make "Decent Work for All' a basic issue When we ask people what the main problems are in their lives, many refer to poverty, to exclusion, to unemployment When asked what is the solution, the reply is "work", and they always refer to decent work obtained in conditions of freedom, equity, security), and human dignity. Training certainly is a necessary ingredient for decent work. It will allow us to respond better to the aspirations of millions of people all over the world.