Seven key industries could suffer severe labour shortages in three to five years if schools do not produce the right personnel to serve their expansion, according to the Education Ministry.

The shortfall could reach almost 584,600 workers.

The ministry's Education Council Office studied future labour demand from the petrochemical, food, automotive, tourism, textile, software and logistics industries.

"We're asking the office to extend the study to cover the entire 13 key industries. We'll discuss the results with all parties particularly universities and vocational colleges. Then, they can draw up a teaching plan to match the demand," caretaker Education Minister Chaturon Chaisang said yesterday.

"So far, we have had no comprehensive research and we have failed to produce the resources that fit demand," he said.

The study forecast that the petrochemical industry, which plans Bt412 billion in investment until 2018, would need 41,557 engineering and technical staff in 2009, up from 32,910 in 2004.

The food industry, which employed 466,000 people in 2004, will need 23,484 new recruits from now until 2009. However, local institutions can produce only 3,000-4,000 graduates in this field per year.

Last year, the automotive industry had 225,000 staff, 3.8 per cent being engineers. But to accommodate the annual production target of two million vehicles by 2010, the workforce should rise to 325,000, of which 5.8 per cent will be engineers.

The textile industry - with 1.1 million workers the largest employer - would need more staff with bachelor degrees or higher to satisfy the Bangkok Fashion project. Today, only 5 per cent of its workforce have such a degree.

The study also shows that the software industry's workforce should expand to 100,000 in 2010, from 34,508 last year. Similarly, the logistics industry, with 303,896 jobs last year, will need 28,000 new hires each year over the next five years.

Bank of Thailand economists also urged the government to focus on educational investment to help boost the country's competitiveness.

Ashvin Ahuja, Thitima Chucherd and Kobsak Pootrakool presented a paper entitled "Human Capital Policy: building a competitive workforce for 21st Century Thailand" at the central bank's symposium yesterday.

According to the International Institute of Management and Development, Thailand's competitive edge is its low wages and high average working hours. But several areas of weakness in the labour market are cause for concern, especially in the medium term - the low supply of skilled labour and low labour productivity.

The central bank economists found that education investment during the formative years, the pre-schooling period, was the most important and that the family environment proved to be a critical input.

"If we start [children's education] badly, after that it will be hard to fix. It starts at home. If education in the early school years is bad, it won't work much to improve it at a later stage of education," they said.

The government needs to focus educational investment in young children, when the rate of return on "human capital investment" is still the highest, while later remedies for early academic deficiencies is much more costly. For example, drug rehabilitation and prisoner rehabilitation and incarceration takes money.

Another key problem that makes children drop out of school is poor parents. This requires government assistance.

Policies should ensure that young children are ready for school, parents are healthy during and post-pregnancy, the existing local health infrastructure is used for child-rearing skills and sufficient nutritious food is made available for parents and children. For example, food coupons could be distributed to pre-schoolers.

Government intervention must come early to enable children to realise their full potential. Merit-based scholarships should be provided to disadvantaged students. Consequential, national standardised examinations should be held for every grade testing core competencies and social skills. Remedial education should be provided for weak pupils in primary schools.

The government should promote teachers' ability to contribute to their students' progress. A merit-pay system should be instituted for administrators and teachers with assessments based on the performance improvements of students. Extra training should be given as a reward to good teachers and low performers should be punished vigorously.

The economists suggested publishing a national ranking of schools based on student scores. Schools should be allowed to manage their own resources, teachers and salaries. Schools should be accountable to a local board. Small rural schools should be merged, while public schools should be limited where private provision is affordable. Efficient business models and pedagogy should be diffused with private sector involvement under tax benefits.

The central bank paper concluded by saying that the human capital policy framework should rest on three pillars - encouraging competition in all sectors and levels, focusing public spending and private charity resources on the needy, and enabling and motivating parents to care for children's health and education until a later stage of development.

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