Introduction

Following the collapse of commodity prices in the early 2010s, countries in Latin America and the Caribbean (LAC) have been seeking new engines of growth that, in addition to raising productivity, would preserve and enhance the equity gains attained in the previous decade. By developing skilled human capital, higher education can be a formidable engine of economic and social progress.

A specific type of higher education program forms skilled human capital in two or three years—so-called short-cycle programs (SCPs). Unlike bachelor’s programs (which usually last five or six years in LAC), SCPs are short, are eminently practical, and have a clear goal of training students for work in a relatively short time. Their providers, who are interested in attracting students, have incentives to track new developments in the labor market and incorporate new technologies, practices, and knowledge into their curricula.

As a form of postsecondary training, SCPs are attractive to a wide variety of individuals. A first category is individuals who are not able to pursue a bachelor’s program because of work or family responsibilities, or because of poor academic preparation. A second category is those who might succeed in a bachelor’s program but are not willing to spend the time and resources necessary for it, opting instead for shorter, more practical, and perhaps higher paying training. A third category is those who may already have a bachelor’s degree but are seeking short, specific training in their broad area of knowledge (for example, a computer scientist interested in learning computer animation) or a different one (for example, a historian interested in marketing).

More generally, individuals who wish to enhance their current skills for a similar occupation (“upskilling”) or acquire new skills for a different occupation (“reskilling”) might gravitate to SCPs. The wide attractiveness of SCPs contrasts with the prevailing view in the region, where SCPs bear the stigma of being the lesser choice for higher education. If they are well designed, these programs have the potential to become a crucial tool for workforce development in the new world of work—where individuals can be expected to switch occupations, and perhaps careers, multiple times over the course of a lifetime,1 and where training must be delivered fast, efficiently, and in close connection with the labor market.

SCPs are not only attractive to individuals, they are also attractive to employers, who struggle to find skilled labor. According to the 2019 World Bank Enterprise Survey, 24 percent of firms in the world report that a workforce with inadequate education is a major constraint. In LAC, however, this rises to 32 percent—the highest of all regions. Providing the variety of skills demanded by the labor market—engineers as well as technicians and physicians as well as x-ray technologists—is a vital role of a functional, dynamic higher education system.2

Although LAC has needed skilled human capital for the past few years— particularly since the end of its “Golden Decade”—the need has become decidedly urgent following the COVID-19 pandemic.3 Yet, as serious as the ensuing economic crisis has been, it has only accelerated structural labor market changes that were already underway (Beylis et al 2020). Even before the pandemic, machines had been replacing humans in routine tasks through automation, and the internet had been replacing personal interaction through the rise of electronic platforms. The productivity and market value of workers who produce intangible value added, such as researchers, analysts, programmers, and designers, was already on the rise thanks to new technologies and increased competition.

The pandemic has merely deepened these trends. Faced with quarantine and social distance requirements, some companies have replaced workers with machines for repetitive tasks, or with electronic platforms for high-contact tasks. In contrast, workers producing intangible value added have faced increasing demand and have been able to telework. Other workers who cannot be replaced by a machine or the internet, such as those in health care, have also faced increasing demand. In other words, although the pandemic has damaged aggregate employment and output, not all firms and workers have fared equally. While many jobs and firms have been destroyed, many others have appeared.

The jobs that disappeared are not likely to come back. To return to employment, those individuals need to acquire the skills relevant to the new world of work. These include cognitive skills (such as critical thinking, analytical capacities, and problem solving) as well as interpersonal skills (such as teamwork, communication, and management) that allow them to perform nonroutine, complex tasks that cannot be automated or executed by electronic platforms. In the aftermath of the COVID-19 crisis, the recovery will crucially depend on upskilling and reskilling the workforce to support economic transformation.

Recent economic crises in LAC provide an additional reason why skills must figure prominently on the path to recovery from the current one. Following such crises, some workers managed to recover employment or earnings quite well while others were permanently “scarred” or damaged, never able to recover previous employment or earnings (Silva et al. 2021). As it turns out, workers without higher education were more likely to be permanently scarred. In the current crisis, training those workers through SCPs—which are a particularly convenient form of higher education—would equip them with the skills needed to reenter the labor market soon, suffering few or no scars.