Ear­li­er this year, I met a young grad­u­ate who had spent the en­tire sum­mer search­ing for a job that matched her ed­u­ca­tion—with­out suc­cess. As the weeks passed and her op­tions nar­rowed, she ap­plied to a lo­cal meat shop, hop­ing to find some form of em­ploy­ment. But even there, she was turned away—she was “overqual­i­fied” to pack chick­en legs.

Her sto­ry is not unique. Across sev­er­al Caribbean coun­tries, young peo­ple are dis­cov­er­ing that aca­d­e­m­ic qual­i­fi­ca­tions, while es­sen­tial, do not al­ways open the doors they ex­pect­ed. Busi­ness­es, in turn, re­port dif­fi­cul­ty fill­ing po­si­tions, not be­cause of a lack of ap­pli­cants, but be­cause many job seek­ers sim­ply don’t have the tech­ni­cal skills or ex­pe­ri­ence re­quired. This dis­con­nect, be­tween the sup­ply and de­mand of skills, is one of the most per­sis­tent growth con­straints in the re­gion.

In Grena­da and St Vin­cent and the Grenadines, for ex­am­ple, firms con­sis­tent­ly rank the short­age of a skilled work­force among the top two ob­sta­cles to do­ing busi­ness. The im­pact of this short­age is strik­ing: in 2020, 50 per cent of all job va­can­cies in Saint Vin­cent and the Grenadines re­quir­ing skilled work­ers re­mained un­filled due to a lack of qual­i­fied ap­pli­cants.

In neigh­bour­ing St Lu­cia, 40 per cent of em­ploy­ers re­port­ed that the skills and ed­u­ca­tion of work­ers hin­dered the coun­try’s com­pet­i­tive­ness. Mean­while, the prob­lem ex­tends be­yond busi­ness­es—61 per cent of youth re­port dif­fi­cul­ties find­ing jobs or earn­ing a liv­ing, of­ten be­cause their aca­d­e­m­ic qual­i­fi­ca­tions do not align with the de­mands of the labour mar­ket.

The ram­i­fi­ca­tions are wide-rang­ing. Youth un­em­ploy­ment in Grena­da and St Lu­cia ex­ceeds 40 per cent, among the high­est in the East­ern Caribbean. For those who do find work, many are em­ployed in roles for which they are un­der­qual­i­fied—57 per cent of work­ers in St Lu­cia lacked the nec­es­sary qual­i­fi­ca­tions for their roles in 2019—or that fail to ful­ly utilise their ed­u­ca­tion and skills. While such em­ploy­ment may of­fer in­come, it can al­so lead to mis­match­es be­tween work­ers’ ca­pa­bil­i­ties and job de­mands, leav­ing many young peo­ple frus­trat­ed and lim­it­ing the po­ten­tial of busi­ness­es to op­er­ate at full pro­duc­tiv­i­ty.

These chal­lenges re­flect deep­er struc­tur­al is­sues, in­clud­ing in­ad­e­quate qual­i­ty of ba­sic ed­u­ca­tion and in­suf­fi­cient col­lab­o­ra­tion be­tween post-sec­ondary in­sti­tu­tions and the pri­vate sec­tor. Post-sec­ondary in­sti­tu­tions of­ten op­er­ate in iso­la­tion from in­dus­try, leav­ing stu­dents with aca­d­e­m­ic cre­den­tials but with­out the prac­ti­cal or tech­ni­cal skills em­ploy­ers need.

Com­pound­ing the is­sue, the East­ern Caribbean spends around 14 per cent of their ed­u­ca­tion bud­get on post-sec­ondary ed­u­ca­tion, com­pared to 25 per cent in Latin Amer­i­ca and 32 per cent in OECD coun­tries. With out­dat­ed lab­o­ra­to­ries, lim­it­ed dig­i­tal in­fra­struc­ture, and low ca­pac­i­ty to sup­port in­clu­sive ed­u­ca­tion, many in­sti­tu­tions are ill-equipped to pre­pare stu­dents for the de­mands of to­day’s labour mar­ket.

These chal­lenges are fur­ther am­pli­fied by the em­i­gra­tion of high­ly skilled work­ers, who of­ten leave the re­gion in search of bet­ter op­por­tu­ni­ties abroad. This loss of tal­ent re­duces the avail­abil­i­ty of skilled pro­fes­sion­als at home and weak­ens the re­turn on pub­lic in­vest­ments in ed­u­ca­tion.

The skills short­age not on­ly im­pacts in­di­vid­ual job seek­ers; it un­der­mines the broad­er econ­o­my by sti­fling pro­duc­tiv­i­ty, re­duc­ing busi­ness com­pet­i­tive­ness, and lim­it­ing op­por­tu­ni­ties for in­no­va­tion.

Part­ly due to miss­ing skills, East­ern Caribbean firms are not ad­e­quate­ly in­vest­ing in and en­gag­ing in in­no­v­a­tive ac­tiv­i­ties. On­ly 2.7 per cent of firms in Grena­da and 3.2 per cent of firms in St Lu­cia have hu­man re­sources ded­i­cat­ed to re­search and de­vel­op­ment.

Re­search and de­vel­op­ment is vi­tal for fos­ter­ing cre­ativ­i­ty, de­vel­op­ing new tech­nolo­gies, and im­prov­ing busi­ness process­es. For the Caribbean, in­vest­ment in re­search and de­vel­op­ment is par­tic­u­lar­ly im­por­tant to ad­dress chal­lenges in key sec­tors such as tourism, agri­cul­ture, and re­new­able en­er­gy, un­lock­ing new op­por­tu­ni­ties for sus­tain­able growth.

How­ev­er, many firms per­ceive the cost of in­no­va­tion as too high rel­a­tive to the mar­ket size. In small economies, busi­ness­es of­ten be­lieve that in­vest­ing in in­no­va­tion won’t yield suf­fi­cient re­turns due to lim­it­ed lo­cal de­mand or the high costs of im­ple­ment­ing new tech­nolo­gies. This per­cep­tion dis­cour­ages com­pa­nies from pur­su­ing in­no­va­tion, lim­it­ing their growth and com­pet­i­tive­ness.

There is no sin­gle so­lu­tion to these chal­lenges – but there are clear ar­eas for ac­tion. First, post-sec­ondary ed­u­ca­tion should re­ceive more at­ten­tion to en­sure in­sti­tu­tions are equipped to de­liv­er rel­e­vant, high-qual­i­ty train­ing. Mod­ernising cur­ric­u­la to in­clude both tech­ni­cal and trans­ver­sal skills—such as prob­lem-solv­ing, adapt­abil­i­ty, and dig­i­tal lit­er­a­cy—is es­sen­tial for prepar­ing youth for the de­mands of to­day’s econ­o­my.

Equal­ly im­por­tant is fos­ter­ing clos­er col­lab­o­ra­tion be­tween ed­u­ca­tion­al in­sti­tu­tions and the pri­vate sec­tor. While some in­sti­tu­tions al­ready main­tain part­ner­ships—par­tic­u­lar­ly in tourism—there is a need to ex­pand these ef­forts across a wider range of sec­tors.

Deep­er and more di­ver­si­fied col­lab­o­ra­tion can help en­sure that train­ing pro­grams align with evolv­ing in­dus­try needs, en­cour­age work­place-based learn­ing op­por­tu­ni­ties, and sup­port re­search and de­vel­op­ment ini­tia­tives that fos­ter in­no­va­tion and job cre­ation.

Ex­pand­ing re­gion­al frame­works, such as shared learn­ing stan­dards and qual­i­fi­ca­tion recog­ni­tion, would al­low for greater mo­bil­i­ty of tal­ent and en­sure con­sis­tent skill de­vel­op­ment across the re­gion. For small is­land states, such col­lab­o­ra­tion al­so of­fers a prac­ti­cal ad­van­tage: the abil­i­ty to pool re­sources and ben­e­fit from cost-shar­ing op­por­tu­ni­ties, mak­ing ed­u­ca­tion and train­ing sys­tems more ef­fi­cient and sus­tain­able. Fi­nal­ly, ad­dress­ing bar­ri­ers to in­no­va­tion by cre­at­ing in­cen­tives for busi­ness­es to in­vest in re­search and de­vel­op­ment and im­prov­ing dig­i­tal in­fra­struc­ture will help un­lock the re­gion’s eco­nom­ic po­ten­tial.

The World Bank is work­ing with Caribbean coun­tries to sup­port these goals. The OECS Skills and In­no­va­tion Project is one ex­am­ple. With US$36 mil­lion in fi­nanc­ing, the project fo­cus­es on en­hanc­ing youth skills, fos­ter­ing re­gion­al col­lab­o­ra­tion, and strength­en­ing a cul­ture of in­no­va­tion. By sup­port­ing 40,000 young peo­ple with tar­get­ed train­ing, es­tab­lish­ing com­mon learn­ing stan­dards, and en­cour­ag­ing part­ner­ships be­tween busi­ness­es and post-sec­ondary in­sti­tu­tions, the ini­tia­tive aims to build an ecosys­tem where in­no­va­tion and skills de­vel­op­ment dri­ve growth.

Be­yond the East­ern Caribbean, coun­tries like Guyana and Be­lize are al­so step­ping up ef­forts to close the skills gap. In Guyana, the World Bank is sup­port­ing the gov­ern­ment’s in­vest­ment in a broad set of skills need­ed to pow­er its rapid­ly ex­pand­ing econ­o­my—with a strong em­pha­sis on tech­ni­cal and vo­ca­tion­al ed­u­ca­tion and train­ing.

Mean­while in Be­lize, where women’s labour force par­tic­i­pa­tion re­mains sig­nif­i­cant­ly low­er than men’s, a forth­com­ing project will fo­cus on ear­ly child­hood de­vel­op­ment and fe­male em­pow­er­ment—with a ded­i­cat­ed com­po­nent aimed at ex­pand­ing women’s em­ploy­ment op­por­tu­ni­ties through skills de­vel­op­ment and sup­port for busi­ness­es in the care and ed­u­ca­tion sec­tors.

The Caribbean holds im­mense po­ten­tial. Tap­ping in­to that po­ten­tial will re­quire a co­or­di­nat­ed ef­fort, long-term in­vest­ment, and a shared com­mit­ment to align­ing skills with op­por­tu­ni­ty.

En­cour­ag­ing­ly, that work is al­ready un­der­way.