The Philippines should reform its Technical and Vocational Education and Training system to meet fast-changing industry needs, the Asian Development Bank said on Tuesday.

A study conducted by ADB showed the need for “reskilling, upskilling, and the development of strong technical and soft skills” to help displaced workers transition into new jobs in Industry 4.0, or technology-driven industrialization.

“Industry 4.0 poses a huge challenge to developing nations like the Philippines, as they have traditionally relied on industrialization and its capacity to generate high-paying jobs as a path toward economic growth,” Ahmed Saeed, ADB vice president, said in a statement.

The bank also called on the government to further secure industry engagement in skills training, by anticipating skills demand, ensuring better targeting of skills training programs and greater efficiency of skills supply, limiting mismatches, and improving labor market outcomes.

The study recommended standardizing and improving workshops, equipment, and digital solutions.

“The Covid19 pandemic has deeply affected segments of the population that are most in need of upgrading their skills to adapt to the changing needs of the labor market,” Ayako Inagaki, ADB Human and Social Development Director for Southeast Asia, said.

“Through much-needed investments and capacity building, the government’s technical and vocational education and training system can help shape labor market outcomes and adjust to anticipated changes to achieve its dual objective of creating a competitive workforce and helping marginalized workers,” she added.

School disruptions and closures due to the pandemic have opened the door for the Technical Education and Skills Development Authority to adopt non-traditional, innovative, and flexible solutions such as online learning and digital tools, the ADB said.

Sameer Khatiwada, ADB Social Sector Specialist and lead author of the study, stressed that there are important challenges to tackle with respect to TESDA’s organizational structure and capacity.

“Although TESDA has made major achievements over the years, questions around its appropriate role, endemic resource constraints, and organizational capacity weigh on its ability to respond to Industry 4.0,” Khatiwada said.