USAID Higher Education for Economic Growth Activity:A path ...

USAID Higher Education for Economic Growth Activity:A path towards the Fourth Industrial Revolution in El Salvador

Achievements and Sustainability

USAID Higher Education for Economic Growth Activity in El Salvador USAID Higher Education for Economic Growth Activity: A path towards the Fourth Industrial Revolution. Achievements and Sustainability.

El Salvador April 2019

Contract AID-519-C-14-00004

Under the responsibility of: Sandra Lorena Duarte Activity Manager USAID/El Salvador Economic Growth Office Final. Blvd. Santa Elena Antiguo Cuscatlán, Dpto. La Libertad El Salvador, Central America

This document has been produced under the USAID Higher Education for Economic Growth Activity by RTI International.

RTI International is one of the world’s leading research institutes, dedicated to improving the human condition by turning knowledge into practice. With more than 5,000 professionals, it provides research and technical services to governments and companies in more than 75 countries in the areas of health and pharmaceutical products, education and training, surveys and statistics, advanced technology, international development, economic and social policy, energy and environment, and laboratory and chemistry services. For more information, please visit www.rti.org.

Disclaimer: This report has been made possible thanks to the support of the American people through the United States Agency for International Development (USAID). The views expressed in this report are those of RTI International and do not necessarily reflect those of USAID or the Government of the United States.

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ACKNOWLEDGMENTS

The achievements mentioned in this document represent the efforts of institutions that have worked collaboratively as part of the USAID Higher Education for Economic Growth Activity. We would like to acknowledge:

Higher Education Institution Cluster Leaders • Universidad Centroamericana José Simeón Cañas • Universidad Francisco Gavidia • Universidad Católica de El Salvador • Universidad Don Bosco

Higher Education Institution Cluster Associates • Universidad de El Salvador • Universidad de Oriente • Universidad Gerardo Barrios • Universidad Dr. José Matías Delgado • Universidad Tecnológica de El Salvador • Universidad Albert Einstein • Universidad Salvadoreña Alberto Masferrer • Escuela Especializada en Ingeniería, ITCA-FEPADE • Escuela Superior Franciscana Especializada,

ESFE/AGAPE Productive sector unions: • Salvadoran Chamber of Information and

Communication Technologies (CASATIC) • Salvadoran Industrial Association (ASI) • Salvadoran Agricultural and Agroindustrial Chamber

(CAMAGRO) • Salvadoran Association for Renewable Energies (ASER)

Government Institutions: • Vice-Ministry of Commerce and Industry-MINEC • Vice-Ministry of Science and Technology

-MINEDUCYT • National Directorate of Higher Education (DNES)

-MINEDUCYT • Commission for the Accreditation of the Quality of

Higher Education in El Salvador – MINEDUCYT Foundations that have contributed to the scholarship program: • Rotary Clubs El Salvador • Frech Foundation • Gloria de Kriete Foundation • Asociación Centro Monseñor Romero • FEDISAL (Salvadoran Foundation for Integrated

Education)

Other institutions: • Salvadoran Council of Professional Associations

(CAPES) • Salvadoran Institute for Professional Training

(INSAFORP) • Salvadoran Legislative Committee on Culture and

Education Businesses, institutions and professionals During the implementation of the Activity, substantial collaboration was received from companies, institutions and professionals in terms of: industry advisory boards, validation workshops for curriculum programs, research development, policy proposal creation, and Career Development Center partner company networks, among others.

Layout: • Felipe Menéndez, Communications Specialist • Alejandra Machado, Communications Assistant

Coordination and technical elements: • Pedro Argumedo, Senior Economic Studies Researcher

on competitiveness • Xiomara Hernández, Higher Education Systems

Specialist • Luis Rivera, Specialist in the • Production, Curriculum Development and Research

Sectors • Luis Costa, Human Capital Specialist

USAID El Salvador: • Sandra Lorena Duarte, USAID El Salvador, Higher

Education Activity Manager USAID Higher Education for Economic Growth Activity: • Reina Durán Alvarado, RTI International, Chief of

Party

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ACRONYMS AND ABBREVIATIONS

ACAAI Central American Accreditation Agency for Architecture and Engineering A4P Alliance for Prosperity PFG Partnership for Growth ASER Salvadoran Association of Renewable Energy ASI Salvadoran Industrialists Association CAMAGRO Salvadoran Agricultural and Agroindustrial Chamber CASATIC Salvadoran Chamber of Information and Communications Technology CDC Career Development Centers CTI Science and Technology in Innovation DNES National Directorate of Higher Education ESFE-AGAPE Escuela Superior Franciscana Especializada FEDISAL Salvadoran Foundation for Integrated Education HEI Higher Education Institutions GCI Global Competitiveness Index GDP Gross Domestic Product HAACP Hazard Analysis and Critical Control Points IAB Industry Advisory Board INSAFORP Salvadoran Institute for professional Training ISO International Organization for Standardization ITCA-FEPADE Escuela Especializada en Ingeniería ITCA-FEPADE CDPD Microsoft Certified Solutions Developer MINEC Ministry of Economy MINEDUCYT Ministry of Education, Science and Technology MIS Management Information System MTA Microsoft Technology Associate PCQI Preventive Controls Qualified Individual RTI RTI International R&D Research and Development SCADA Supervisory Control and Data Acquisition STEM Science, Technology, Engineering and Mathematics SWOT Strengths, Weaknesses, Opportunities, Threats TV Television TVWS Television White Space UAE Universidad Albert Einstein UCA Universidad Centroamericana José Simeón Cañas UDB Universidad Don Bosco UES Universidad de El Salvador UFG Universidad Francisco Gavidia UGB Universidad Gerardo Barrios UJMD Universidad Dr. José Matías Delgado UNICAES Universidad Católica de El Salvador UNIVO Universidad de Oriente USAID U.S. Agency for International Development USAM Universidad Salvadoreña Alberto Masferrer UTEC Universidad Tecnológica de El Salvador UVG Universidad del Valle de Guatemala WEF World Economic Forum

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CONTENTS Presentation ............................................................................................................................................................................................... iv

Introduction ............................................................................................................................................................................................... 1

I. Focus of the USAID Higher Education for Economic Growth Activity .......................................................... 3 1. Background: The challenge of a knowledge-based economy.................................................................................................. 4 2. USAID Higher Education for Economic Growth Activity. ................................................................................................... 5

2.1. Objectives................................................................................................................................................................................... 5 2.2. Key Activity areas ............................................................................................................................................................ 5 2.3 Clusters: A plataform for dialoge}ue between universities, industry and government. ........................................ 6

II. Fourth Industrial Revolution: Competitiveness, economic growth, education and innovation ............. 9 1. Fourth Industrial Revolution. ................................................................................................................................................................ 10 2. Competitiveness 4.0: El Salvador’s performance ........................................................................................................................ 12 3. Competitiveness 4.0: The role of higher education and innovation. ........................................................................................... 15

3.1. Skills pillar ......................................................................................................................................................................... 15 3.2. Innovation capability pillar ............................................................................................................................................. 16 3.3. Labor market and business dynamisn pillars............................................................................................................... 17

III. Contribution of the Activity to the Fourth Industrial Revolution for economic and social growth...19 1. Cluster model: Impact on competitiveness 4.0. ......................................................................................................................... 21 2. Investing in human capital: Impact on competitiveness 4.0. ................................................................................................... 23 3. Applied research and development for the HEIs: Impact on competitiveness 4.0. ............................................................ 26 4. Institutional strengthening: Impact on competitiveness 4.0. .................................................................................................. 28

IV. Moving towards sustainability and improving El Salvador’s competitiveness. ........................................... 29

Annex 1: Applied research in parthership with Industry, foreign universities and the government .............. 34

Bibliography................................................................................................................................................................................................. 39

IMAGES Figure 1 Cluster: Institutional organizational framework. ....................................................................................................................... 8 Figure 2 Cluster participants: HEI and business unions ......................................................................................................................... 8 Figure 3 Global Competitiveness Index 4.0: Dimensions, pillars and indicators................................................................................. 13 Figure 4 El Salvador: Global Competitiveness Index 4.0 performance ................................................................................................ 14 Figure 5 Clulster model: Impact on competitiveness 4.0......................................................................................................................... 22 Figure 6 Investign in human capital: Impact on competitiveness 4.0. ................................................................................................... 23 Figure 7 Applied research and development of the HEI’s: Impact on competitiveness .................................................................... 27 Figure 8 Institutional strengthening: Impact on competitiveness 4.0. ................................................................................................... 28

TABLES Table 1 El Salvador: Skilled labor force pillar performance ................................................................................................................... 16 Table 2 El Salvador: Innovation capability performance ........................................................................................................................ 17 Table 3 El Salvador: Labor market and business dynamism performance .......................................................................................... 18 Table 4 Status of the Typical Functions of a Competitiveness Cluster, December 2017. ................................................................. 30

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PRESENTATION

This document gives an account of the validity and effectiveness of the approach adopted by the USAID Higher Education for Economic Growth Activity in addressing the indicators associated with innovation, skills development and business dynamism during its interventions.

The 2018 Global Competitiveness Index, together with global economic growth trends, allow us to determine the challenges involved in working towards the so-called Fourth Industrial Revolution. This trend is characterized by speed, intensive innovation, training and new human capital skills, as well as development that focuses on integrating diverse technologies.

From the standpoint of the U.S. Government’s Alliance for Prosperity (A4P) with the Northern Triangle of Central America, formed in response to the barriers that prevent growth in El Salvador, the USAID Higher Education for Economic Growth Activity has been developed over the last for 5 years. The Activity has become a key element in transforming El Salvador’s higher education system and creating the foundations necessary for facing the immediate challenges of global competitiveness and stimulating economic growth and social development.

The Activity established the cluster model as an institutional platform on which mutually beneficial relationships between the HEIs, industry and the government were built; a partnership was formed to ensure the quality of human resources by improving the training programs that are offered. Innovation was also promoted as a way to solve industry issues or increase production. When creating the clusters, the Activity chose four sectors based on their potential for growth and their importance within the economy: (1) Information and Communications Technology; (2) Light Manufacturing; (3) Energy and Energy Efficiency; and (4) Agro-Industry and Food Processing.

Over the course of five years of Activity implementation, an institutional framework of university, industry and government collaboration was achieved, which allowed for the definition and implementation of programs that are aligned with the critical variables of innovation, the development of human talent, and business dynamism, in the context of the opportunities of the Fourth Industrial Revolution. The diverse Activity interventions have shown us the value of focusing on human capital, transforming the higher education system, equipping it with skills for innovation, and contributing to strengthening relationships with the production sector.

We are pleased to say that El Salvador is now in a position which allows us to move towards improving competitiveness and offering adequate economic and social conditions for salvadorans. The situation now favors innovation in a way that is both accurate and relevant.

We have been able to develop the skills of more than 150 researchers, and have authorized more than 30 spaces for research and training. We have helped carry out 26 applied research activitys that have an impact on industry, and we have made a significant

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commitment to the development of future talent by training more than 1000 faculty members in technical and educational sectors, as well as updating or creating 33 degrees aligned with the main requirements of economic growth. The impact of many of these efforts will be evident in the medium term, since investments in the educational field require trust, sustained investment and leadership from the institutions involved.

Some of the benefits of this Activity can be clearly seen, and we hope that the productive sectors will also take immediate advantage of them; in particular, the availability of knowledge developed by faculty members which can translate into the search for solutions to productivity problems; and the availability of laboratories that facilitate analysis and testing that were not previously available in the country, such as electron microscopy, polymer analysis, corrosion, electrical generation analysis through biodigesters, and assistance for sustainable construction, among others.

In order to sustain these achievements, the government and the private and educational sectors will continue their collaborative efforts using a triple helix approach through the clusters. This commitment has been formalized through the signing of the Agreement for the Creation of the Consortium of Higher Education Institutions for Economic Growth, and the agreements for collaboration between the associations and productive sector unions with this consortium.

Our most sincere thanks go out to all the partners and staff of the Activity. Through their dedication, effort and commitment, they have contributed to all of the achievements that appear in this document.

A heartfelt thank you for the DETERMINATION to make our country a better El Salvador.

April, 2019

Sandra Lorena Duarte Manager USAID Higher Education for Economic Growth Activity.

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INTRODUCTION

The USAID Higher Education for Economic Growth Activity is a key part of the U.S. Government’s Alliance for Prosperity (A4P) in the Northern Triangle, which aims to strengthen El Salvador’s higher education system in order to help stimulate economic growth and social development, and to respond adequately to the needs of the country’s production sector.

An in-depth study on growth constraints in El Salvador found two main obstacles: low productivity in the country’s economic sectors on the one hand, and high insecurity and crime on the other. Facing both challenges involves increasing the coverage and quality of the higher education system in order to strengthen human capital skills and abilities, and to create more opportunities for the country’s young people.

The Activity arose within the context of the global economy, which has shown that a country’s high and sustained growth can be explained by a knowledge-based economy, with higher education being one of the main pillars. The Activity was implemented within the context of accelerated technological change, recognized as the Fourth Industrial Revolution.

This study describes the Activity and its main achievements, and systematizes what the Fourth Industrial Revolution is and how it is measured in a country using the competitiveness 4.0 indicators; it then evaluates the Activity results in the light of the pillars and indicators that determine competitiveness 4.0; and finally it presents the actions that need to be implemented in order for the Activity to be sustainable. The chapter structure of this report is as follows:

Focus of the USAID Higher Education for Economic Growth Activity. The problem and its background are described, the Activity proposal for changing the situation is presented, and the cluster model is explained as the dialogue and cooperation platform between universities, industry and government.

The Fourth Industrial Revolution, economic growth, education and innovation. A comprehensive explanation is given of the fourth revolution process, together with its risks and opportunities for countries, and then the measurement of this process in the different countries is analyzed using the Global Competitiveness Index 4.0. El Salvador’s performance in the Index is also evaluated, and a detailed analysis is presented of the competitiveness pillars related to higher education.

The contribution of the Activity to the Fourth Industrial Revolution for economic and social growth offers a very demanding evaluation of the results of the Activity according to the Competitiveness 4.0 pillars and indicators, and shows that over the course of five years of Activity implementation, an institutional framework of university, industry and government collaboration was achieved, which allowed for the definition and

Introduction 1

implementation of programs that are aligned with the opportunities of the Fourth Industrial Revolution.

Moving towards sustainability and improving El Salvador’s competitiveness explains the agreement reached by the Consortium of Higher Education Institutions with the productive sectors to continue implementing the measures that consolidate the model, as well as other actions that are already in operation such as: research areas associated with the productive sector, the National Higher Education Policy Proposal, the design and modernization of degrees that contribute to productivity, and actions that promote women’s development through economic empowerment, among others.

Introduction 92B

I. FOCUS OF THE USAID HIGHER EDUCATION FOR ECONOMIC GROWTH ACTIVITY

In 20111, the U.S. and Salvadoran governments signed a bilateral agreement known as the Partnership for Growth (PFG), which combined resources from both countries in order to accelerate and sustain higher economic growth. An in-depth study was also carried out which focused on analyzing the growth constraints in El Salvador2. This study found two main constraints: i) low productivity in the tradable goods sector, which was evident in a reduction in its participation in the generation of Gross Domestic Product (GDP), and largely explained by the lower competitiveness of exportable products, causing low growth and fewer jobs; and ii) security and crime: almost half of the companies surveyed indicated that crime limits their operations, and in municipalities with the lowest rate of safety, competitiveness was also lower. It was recognized that improving the efficiency of crime fighting was important, but so was the creation of more opportunities for young people by increasing the attendance and quality of education.

Increasing education was one of the main recommendations, among others, for reducing or eliminating growth constraints.

economy, since global demand was expecting higher value, more innovative products at competitive prices.

The diagnosis found different types of gaps in the higher education system, among which were low graduation rates, issues with the quality of education, inequalities in access to education, and a major discrepancy between academic offerings and labor market demands.

Consistent with this evaluation, it was suggested that the education system should offer education which is relevant to the needs and opportunities of the labor market; should increase basic and applied research in order to create innovative products that expand growth; and should strengthen higher education institutes in order to sustain a collaborative platform between the academic and production sectors and the government in order to adapt to the global demands for a more competitive, knowledge-based economy.

On that basis, an evaluation of the country’s3 higher education was carried out, which highlighted the progress seen in educational coverage compared to the past, but also indicated challenges related to the fact that higher education was one of the foundations for the growth of the knowledge

1 More details on the extent of these suggestions can be found in “Evaluación del Desempeño del Asocio para el Crecimiento en El Salvador”, published by the U.S. Agency for International Development (USAID) in July of 2017. Find the study at https://sv.usembassy.gov/wp-content/ uploads/sites/202/Asocio_para_el_Crecimiento_El-Salvador_Evaluacion_Final.pdf

2 The study was “Pacto para el Crecimiento El Salvador: análisis de restricciones” in September 2011. See the link at https://photos.state.gov/ libraries/elsavador/92891/PFG/ES%20Constraints_Analysis.pdf

3 The results of “El Salvador: evaluación de la educación superior y recomendaciones”, published by USAID in January 2012.

Focus of the USAID Higher Education for Economic Growth Activity

In this respect, the study indicated that it was important to increase educational coverage and quality in order to reduce crime rates, and stressed that increasing education would be a strategic investment to boost economic growth and employment.

1. Background: The challenge of a knowledge-based

economy

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The USAID Higher Education for Economic Growth Activity is a key part of the U.S. Government’s Alliance for Prosperity (A4P) in the Northern Triangle, which aims to transform El Salvador’s higher education system in order to help stimulate economic growth and social development, and to respond adequately to the needs of the country’s production sector.

The Activity amounted to $22 million financed by USAID in El Salvador and relies on contributions made by Higher Education Institutions (HEI), the productive sector and the government; the implementation period began in June 2014 and ends in June 2019 (five years). The Activity applied methodologies that placed these institutions at the forefront of their own development.

The Activity was presented on fertile ground, since a similar diagnosis of the issue and a willingness to undertake a new agenda already existed among key higher education institutional figures. In this regard, it should be emphasized that the HEIs, the unions representing the productive sectors, and the educational authorities were all willing to take a risk, demanded a collaborative work environment, and were open to change.

2.1 Objectives

The objectives of the Activity were to build institutional and human skills within El Salvador’s HEIs by strengthening the effectiveness of key players such as the government and the HEIs themselves; to offer education and research programs that contribute to the country’s economic and social growth; and to develop the capacity of the higher education system to respond to industry needs.

2.2 Key Activity Areas

The execution of the Activity was organized into three complementary areas in order to facilitate the implementation of the measures in a coordinated and sequential way. These areas were:

Investing in human capital

Teachers, researchers and HEI administrative staff associated with the Activity were given specialized training (high-demand fields, applied research and English), internships and pedagogy. The teachers then passed on their newly-acquired knowledge to the students in order to prepare them in the best way possible for their entry into the labor force, and provide them with the tools and knowledge required by the industry. In addition, support was given to faculty members in order to encourage them to study Master’s programs in key universities in the United States, Puerto Rico and Mexico, thereby offering them new knowledge and specializations which they could share with their students, colleagues and researchers.

The Activity has awarded scholarships to talented young people with limited economic resources so they can pursue a career in STEM fields. This program has allowed more young people to have access to quality higher education in accordance with the needs of the productive sectors. This improves their entry into the labor market and should lead to a future reduction in the country’s emigration rate.

2. USAID Higher Education for Economic Growth Activity

Focus of the USAID Higher Education for Economic Growth Activity 5

Developing the quality of HEI Curriculum and research

This is implemented by ensuring the alignment and relevance of curriculum programs and the research developed by HEIs in El Salvador. The interventions were based on national economic analysis, international trends, and the potential for industry collaboration. Validation of the interventions has been based on close collaboration with the industry through the Industry Advisory Board, as well as collaborative work to implement the initiatives. This component of the Activity also implemented initiatives to establish career guidance systems that have strengthened the quality of the academic-industry link by integrating graduates into the professional world based on labor market studies.

Strengthening HEI Institutional capacity

The activities developed to strengthen the system are carried out collaboratively, based on dialog between the key players, with the aim of supporting necessary reform proposals in order to improve the system. The political dialogue that took place led to the creation of the proposal of the National Policy on Higher Education and strengthened the work coordinated between HEIs and the Ministry of Education, Science and Technology.

The Activity offered technical assistance and developed the capacities of the HEIs in strategic planningandmanagement, financialmanagement and fundraising, leadership development, use and promotion of management information systems (MIS), and in specialized certifications on topics such as sustainable construction, academic management, quality management and activity management, among others.

It also supported the equipping of laboratories,

software and hardware acquisition and bibliographical updates, thus ensuring improvements to the quality of higher education in the country.

The activities that were developed generated sustainable work methods, which will allow HEIs to adapt to the changing needs of the labor market at a pace that is consistent with market changes.

2.3 Clusters: A platform for dialogue between universities, industry and government

The Salvadoran economy has several valuable productive chains with various degrees of union organization. Four clusters were prioritized within the Activity, upon which the intervention model was built in order to increase competitive capabilities and move towards a knowledge-based economy for value creation. The prioritized sectors were: i) information and communications technology, ii) energy and energy efficiency, iii) light manufacturing, iv) agro-industry and food processing.

The clusters were represented by the HEIs and by the productive and educational sectors, and a cluster director was named as a link between the different players (figure no. 1). The light manufacturing cluster, for example, was made up of an anchor HEI, in this case the Universidad Centroamericana José Simeón Cañas (UCA), and eight associate HEIs which had degrees linked to the sector; at the same time, the production sector was represented by a union, which in this case was the Salvadoran Industrialists Association (ASI). The Industry Advisory Board (IAB) was created for each cluster, which included a coordinator and entrepreneurs, officials and professionals from the sector, who each contribute their knowledge and experience in order to validate the strategies

Focus of the USAID Higher Education for Economic Growth Activity 136B

and activities implemented during the Activity. A Work Group was appointed to be in charge of designing the strategy and implementing the actions. A cluster study was carried out for this purpose, which addressed the following topics: i) structure and economic importance of the El Salvador cluster, ii) analysis of the occupational demand, iii) analysis of academic offerings related to the cluster, iv) competitiveness analysis (SWOT and benchmarking), and v) recommendations, including actions for the strategic plan.

The cluster’s strategic approach to work facilitated vertical and horizontal cooperation between the different players of the helix. In the academic segments, the universities all collaborated with each other. Horizontal collaboration between HEIs, businesses and the government was also very beneficial. Figure no. 2 highlights the interaction brought about by the Activity between 13 HEIs, 4 unions, and ministries such as the ministries of Education, Science and Technology and the Ministry of Economy.

Activity achievements

• 4 clusters created to promote industry, academia and government collaboration.

• 1,403 teachers, researchers and staff from universities linked to the Activity trained in education, high-demand fields, English and applied research.

• 77% of teachers who received the 21st Century Pedagogy certificate improved their teaching skills, by leaning more towards a student-centered teaching style.

• As a result of the training provided, 21% of the teachers agree that production processes in the industrial sectors in which they participate have improved.

• 33 new or updated degrees in response to industry needs, and over 3,900 students enrolled.

• 647 students have benefited from study scholarships in STEM programs promoted by the Activity. 1,000 years’ worth of scholarships awarded.

• 26 applied research studies in collaboration with industry and the government. Industry contributed approximately $750,000, the USAID contribution was approximately $2 million, and university contributions were close to $2.3 million.

• 14 universities in the United States, Spain and Ecuador have worked with Salvadoran universities on applied research activitys.

• 17 new or improved research laboratories. • 18 laboratories for degrees and accreditation

implementation. • • 5 Career Development Centers (CDC)

implemented in the same number of universities. • 478 students employed by the private sector, 1,395

in internships and 26,000 using CDC services. • National Higher Education Policy Proposal and a

roadmap for its implementation. • • Female Leaders in Higher Education

Network. • 5 universities strengthened through HICD

methodology

Focus of the USAID Higher Education for Economic Growth Activity 7

Universities from the United States, Ecuador and Spain that have been involved in research studies

1. University of South Florida (USF) 2. Rutgers University 3. Miami Dade College 4. University of Illinois 5. University of Auburn 6. University of California La Merced 7. University of Florida 8. Universidad Internacional de Humboldt 9. Marquette University, Wisconsin. 10. University of Pensilvania. 11. Texas A & M 12. University of Notredame. 13. Universidad Técnica Particular de Lojan,

Ecuador. 14. Instituto Químico de Sarriá, Barcelona

España

Source: Prepared by the Activity

Source: Prepared by the Activity

Focus of the USAID Higher Education for Economic Growth Activity

Figure 2 Cluster participants: HEIs, business unions and government

Figure 1 Cluster: Institutional-organizational framework

158B

I1. FOURTH INDUSTRIAL REVOLUTION: COMPETITIVENESS, ECONOMIC GROWTH, EDUCATION AND INNOVATION

The Fourth Industrial Revolution is currently underway around the world, driven by artificial intelligence and automation. These changes can lead to anxiety caused by the creative destruction of jobs, and this drives a greater investment in human capital in order to adapt to the changes through: i) developing new degrees and updating existing ones; ii) training programs in advanced cognitive skills for solving complex problems; iii) socio-behavioral skills for working in teams; and iv) advanced technological computer and programming skills (World Bank4 2019 and McKinsey5 2018). The Fourth Industrial Revolution is in a process of expansion and consolidation. The World Economic Forum6

(2016) highlights that this revolution is very different from the previous three revolutions due to: i) the speed with which changes occur, which has no historical precedent (years ago people were talking about the knowledge economy phenomenon, which was a precursor to all this change); ii) the breadth and depth of the changes, which are present in every global production process; iii) its impact will transform the entire systems of agriculture, industry and services, and will fuse them together by taking advantage of the Internet and information systems.

El Salvador is confronted with a double challenge in the face of the fourth industrial revolution: On the one hand, there is a risk that value chains could disappear when they are unable to compete with robots; on the other, certain services that are provided internationally could be codified and replaced by artificial intelligence. However, at the same time the fourth revolution will create new job opportunities which can be exploited if the country has the new skills required. The country’s challenge will therefore be to prepare its single and most valuable resource – the people – by expanding the coverage and quality of higher education and making it much more relevant to the new demands of ongoing technological change.

This phenomenon generates important questions among governments, companies and workers which should result in a national strategy in which the education system is key to strengthening human capital. These questions are: What will the process of creating or destroying jobs be like in the coming years? What will the new productive activities be, and which industries will disappear? What kind of skills will be required from human resources? How can we adjust?

4 A quantification of how technological changes create and destroy globally, and how there is more net employment. See “The Changing Nature of Work”, World Bank, 2019. 5 A comprehensive analysis of skills that will be in demand by 2030 is presented in “Skill Shift: Automation and the Future of the Workforce”, McKin- sey Global Institute, May 2018 6 In 2016, the World Economic Forum published “The Fourth Industrial Revolution”, thereby coining the term Fourth Industrial Revolution, although other research already existed that called the process Industry 4.0.

Fourth Industrial Revolution: Competitiveness, economic growth, education and innovation

The education system will be key to the successful transition of both individuals and countries, and will need to design new degrees, and incorporate hard and soft skills so that students are trained in future employment opportunities (World Bank4 2019); at the same time, they must shut down degrees or training courses that have been replaced by technological advances and are therefore obsolete.

1. Fourth Industrial Revolution

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McKinsey Global Institute7 (2018), which presented updatedestimates of the future impact of the technological revolution on the labor market, estimated that the number of workers who will be replaced by automation processes will reach 400 million between 2016 and 2030, with almost all work activities being affected (30% of all jobs are susceptible to automation) and 5% of jobs will disappear completely. On the other hand, the study indicated that 555 million new jobs will be created as a result of new technological activities, greater expansion of the global economy, and adjustments to current work processes that will incorporate technological improvements.

Boston Consulting Group8 (2015) conducted a study which illustrated how new disruptive technologies such as sensors, robotization and information technologies are changing the demand for new skills in Industry 4.0. These new technologies will have an impact on the labor market and on demands for new skills. Some examples include:

Autonomous robots

These are characterized by having sensors, working on interconnected information technology-based platforms, and interacting with humans; they will reduce repetitive and low-cost manual work, but will create demand for programmers and robot maintenance.

Big data

Used for quality control, this will store a large amount of information which will allow for the identification of possible failures and reduce waste; this will probably reduce employment for quality controllers, but will increase jobs for data analysts.

Self-driving logistics vehicles

These can move consumables and finished products around the factories, thereby decreasing jobs for logistics personnel, although employment options for program designers will increase.

Additive manufacturing of complex parts

3D (three dimensional) printing allows component creation in a single step, effectively eliminating the need for assembly work but increasing the demand for computer-aided 3D design and 3D modeling in R&D.

7 See the publication “AI, automation, and the future of work: Ten things to solve for”, by McKinsey Global Institute, June 2018. 8 Boston Consulting Group analyzed nine disruptive technologies that are changing production processes. For more details, see “Man and Machine in Industry 4.0”, BCG, September 2015 9 The Inter-American Development Bank carried out a study on the impact of technological change, “Robotlution. The future of work in in Latin American integration 4.0”.


In the face of job substitution and the emergence of new occupations that will demand new skills, Professor Robert Aumann (Nobel Prize in Economics) proposes three priorities to help public policies rise to the challenge. These priorities are: education, education and education9.

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Every year the World Economic Forum publishes the Global Competitiveness Index (GCI) which is used as a reference for assessing a country’s performance. In 2015, a review process of the index was initiated in order to make it a reference on the determinants of competitiveness for nations in the Fourth Industrial Revolution era. As a result, the new GCI 4.010 was introduced, which places special emphasis on the pillars of human capital, innovation and the capacity to recover, as drivers of success in the face of fast- paced changes. However, it also highlights the importance of an integral and holistic approach to the other factors that underpin a country’s development.

Competitiveness is defined as “the set of institutions, policies and factors that determine the level of productivity of a country” (WEF 2018, p. 43), considering that productivity is the most determining factor of long-term economic growth. To that effect, econometric tests conducted by WEF found that GCI 4.0 explains more than 80% of variability in long-term growth. The importance of economic performance is also recognized in the Sustainable Development Goals, since number eight proposes “sustained, inclusive and sustainable economic growth”, and indicates that the goal for developing countries is to grow by 7%. In order for El Salvador to achieve this goal, it must improve its competitive performance.

The new framework of indicators that together form GCI 4.0 was based both on evidence and on the characteristics that determine the most successful economies in the Fourth Industrial Revolution era. The indicator has therefore been structured into four major dimensions dimensions which cover the twelve pillars that support the Fourth Industrial Revolution (figure no. 3), as such:

Human capital

The Fourth Industrial Revolution recognizes that the ultimate goal of all technological changes is to improve living conditions, for which competitive human capital conditions are needed. GCI 4.0 incorporates two pillars which are vital for prosperity and for taking advantage of opportunities: the skills people must develop in order to thrive in a changing world; and health, measured by well-being (physical, mental and social).

Innovation ecosystem

In order to move towards greater development, countries must create and stimulate the best possible environment for the emergence of ideas for new or better products and services. This consists of two closely-linked pillars: business dynamism and the countries’ innovation capability.

Enabling environment

The countries must provide a quality, low- cost operating platform which is measured by four critical pillars: i) institutionalism related to predictability and compliance with the law; ii) macroeconomic stability, which allows low inflation and low public debt; iii) infrastructure, vital for efficient mobility and low-cost logistics; iv) adoption of information and communications technology with universal and quality access, and the adoption of technologies in order to take advantage of artificial intelligence opportunities.

7 The Global Competitiveness Report 2018, WEF, october 2018.


2. Competitiveness 4.0: El Salvador’s Performance

12

Markets

Market efficiency and competition are essential, and ensure that the factors (capital and labor) and products are priced based on their productivity, and that there are no inefficiencies due to abuse of market power or other risks

El Salvador was ranked 98 out of 140 nations evaluated by GCI 4.0 in 2018, which is 19 positions lower than a decade ago, and is evidence of a loss of competitiveness. El

Salvador’s overall competitiveness score was 53, a fair distance from highest score of 100 (figure no. 4). Chile is the leader in Latin America, in 33rd place, and Costa Rica (55) holds the lead in Central America, followed by Panama (64), Guatemala (96), Honduras (101) and Nicaragua (104).

Source: Prepared based on GCI 4.0


Figure 3 Global Competitiveness Index 4.0: Measures, pillars and indicators

13

El Salvador’s competitiveness result was improved by the high result achieved in the health pillar, which reached the 60th position in the ranking and a score of 83, which places it very close to the maximum (100). The second and third best-placed pillars were for the financial system (64th place) and macroeconomic stability (69th), both of which reflect good regulation and financial system competence, combined with low inflation partly explained by dollarization.

Figure 4 El Salvador: Global Competitiveness Index 4.0 Performance Note: The above table has some very interesting information. Horizontally, it shows the place our country has reached in each of the twelve competitiveness index pillars compared to the 140 countries included in the study, as well as the global position (98). Vertically, it shows El Salvador’s score for each of the twelve pillars, and compares it with the global average and that of Latin America, allowing the disparities to be identified at a single glance.


Figure 4 El Salvador: Global Competitiveness Index 4.0 Performance

14

A critical problem for El Salvador is the fact that it is lagging behind in the very pillars which are driving the Fourth Industrial Revolution; in last place is the innovation capability, which stood at 123 in the global ranking; business dynamism was in tenth place among the pillars, with a global ranking of 111, and skills were located in position 107 (figure no. 4).

In order to thrive in the coming years within the context of the Fourth Industrial Revolution, it is important to remember that development must focus on human capital; one essential relationship is therefore between competitiveness and higher education/ innovation. To this end, the GCI 4.0 makes it possible to better understand this relationship through a set of standardized indicators (the variable is the same in each country) deriving from hard statistics from each country’s statistical system and from the competitiveness opinion survey designed by the World Economic Forum.

Within the framework of the GCI 4.0, higher education has a direct link with the pillars and the indicators used to measure skills and the innovation capability. However, the relationship that exists with some indicators that make up the business dynamism and labor market pillars will also be shown.

Each pillar is comprised of a set of indicators that describe and measure it, and each indicator has a value that either comes from official statistics (for example, average years of schooling) or from the results of the competitiveness survey, with a scale from 1 to 7. The ranking is established for the 140 nations evaluated based on the indicator results by country. It should be noted that the result for each pillar is the simple average of the measurement of each indicator, which are only measured based on the limit values (0-100).

El Salvador’s results for each pillar and indicator will now be shown, and the leading Central American country is identified as a benchmark for good practices, and to observe public policies are being implemented in these nations that could eventually be adapted to El Salvador.

3.1 Skills Pillar

This pillar seeks to measure the general skills level of the strength and quality of education. Within

the context of the Fourth Revolution, quality measurement includes new variables such as: the ability to think critically and creatively (artificial intelligence is unable do this), interpersonal skills (necessary in the face of increasing human- machine relationships), and the development of digital literacy. These new characteristics of training did not exist in the past, when higher education was evaluated within the framework of knowledge economy concepts. It is important to keep in mind that education builds skills and competency in the workforce.

The GCI 4.0 states that “highly-educated populations are more productive because they possess greater collective ability to perform tasks and transfer knowledge quickly, and create new knowledge and applications” (p. 41).

In the skills pillar, El Salvador ranked 107th, while Costa Rica, leader in the region, ranked 44th, very close to Chile (42), which is the leading Latin American country (table no.1). The country holds a better position in the indicators related to future skills training (100), but is lagging slightly behind in terms of current skills (111). Costa Rica is the leading Latin American country in both categories. Improving on these indicators will be a challenge for El Salvador since they all rank over 100. It should be noted that the indicators associated with future training are better positioned, such as pupil-teacher ratio (100) and school life expectancy (100), while those that lag behind are critical thinking (135), digital skills in the active population (123), and ease of finding skilled employees (110) (table no. 1).


3. Competitiveness 4.0: The role of higher education

and innovation

15

Source: GCI 4.0

3.2 Innovation capability pillar

This pillar illustrates the relationship between higher education and the productive sector, and aims to create value and well-being by measuring: i) the quality and quantity of research and development (R&D), ii) the environment of the country in terms of encouraging collaboration, connectivity, creativity, diversity and confrontation from different visions and angles (academia - industry), and iii) the ability to convert ideas into new goods and services.

The most innovative countries are characterized by offering better opportunities for cooperation to generate innovative ideas and new business models, which are widely considered to be the drivers of economic growth. El Salvador’s innovation capability pillar is in the

123rd position, while Brazil (40) holds the leading position in Latin America, and Costa Rica is the leading country in Central America (55) (table no.2). The country has a serious disadvantage in the component involving interaction in order to create innovation, where it is in the 135th position. This is the result of a poor perception of collaboration among the parties interested in achieving innovation (position 137 out of 140 countries evaluated), which stems from poor collaboration within individual companies (136), poor collaboration between companies (138) and academia - industry collaboration (121). Likewise, El Salvador was ranked 130 in research and development, and lags behind in terms of scientific research publications and patent applications (table no. 2).


Table 1 El Salvador: Skilled labor force pillar performance

16

Source: GCI 4.0

3.3 Labor market and business dynamism pillars

Some of the indicators for these pillars are associated with a role that links them to higher education. In terms of business dynamism, the country is in 111th place, with the United States as the global leader and Chile holding the number one position in Latin America. In terms of the impact of higher education in dynamic companies, for El Salvador the best-situated indicator is in attitudes towards entrepreneurial risk (79), while the biggest lag was in companies embracing disruptive ideas (136), followed by the growth of innovative companies (130) (table no. 3).

In the case of the labor market pillar, the country is in 104th place, with a low indicator for cooperation in labor-employer relations (104), and female participation in the labor force in position 93.

Higher education can play a strategic role, promoting a culture of employer-worker cooperation (win-win), and supporting a higher number of women entering higher education.


Table 2 El Salvador: Innovation capability performance

17

Source: GCI 4.0 Note: Only some of the variables from the two pillars appearing in the table have been considered.


Table 3 El Salvador: Labor and business dynamism performance

18

III. CONTRIBUTION OF THE ACTIVITY TO THE FOURTH INDUSTRIAL REVOLUTION FOR ECONOMIC AND SOCIAL GROWTH

The USAID Higher Education for Economic Growth Activity began in 2014 by implementing a set of actions that are now closely linked to the competitiveness 4.0 indicators that were released in October 2018. The World Economic Forum states that implementing competitiveness pillar actions enables increased productivity, which in turn promotes long-term sustained growth.

In this section, the following questions will be answered: how are the Activity initiatives and results related to the competitiveness 4.0 pillars? What were the factors that allowed this overlap between the Activity initiatives and the competitiveness 4.0 indicators? What lessons does the Activity offer to the challenges of growing in the midst of the Fourth Industrial Revolution?

Four of the many factors will be highlighted, which mark the success of the Activity: the first was to make an appropriate diagnosis of the cluster with its link to higher education; the second was the clear establishment of objectives (what needs to be done?); the third was the implementation strategy (how to do it, cluster model?); and the fourth was the appropriate monitoring and evaluation, which enabled adjustments, learning, and close collaboration with the players in order to promote the effective implementation of a new model within a context of structural problems (weak relationships between the production sector and the academic world).

At the start of the Activity, it was diagnosed that higher education was hindering long-term growth; it was therefore decided that the Activity needed to focus on strengthening the quality and relevance of higher education and applied research in order to increase the competitive and productive capacity of a group of chosen sectors.

The ‘how to do this’ was groundbreaking and applicable, and involved using the cluster model which allowed for the creation of an environment of cooperation between the three main players in terms of productivity – the business sector, the academic sector and the government.

We will now analyze in detail how the cluster model implemented by the Activity directly affects the key indicators for improving competitiveness 4.0. We will also systematize how the key areas of Activity intervention (human capital, research, and institutions) used programs linked to competitiveness 4.0 indicators.

Contribution of the Activity to the Fourth Industrial Revolution for economic and social growth 20

The Fourth Industrial Revolution is rapidly changing production and the labor market, which makes the revision of higher education and ongoing training plans more urgent, in order to take advantage of global opportunities and limit costs. A very important factor in a country’s success is to have an institutional framework that facilitates cooperation between the production, academic and governmental sectors; through this, informed discussions are held when making both individual and collaborative decisions, in order to increase the human capital skills and support for innovation, These actions are indispensable when it comes to increasing productivity and competitiveness.

The USAID Higher Education for Economic Growth Activity in El Salvador established the cluster model as the institutional platform on which mutually beneficial relationships were built between HEIs, the industry and the government. A partnership was formed within areas of common interest, such as the quality of human resources, curricular development, innovation for solving industry problems or increasing production. The Activity chose the following four sectors, based on their potential for growth and their importance in the economy:

Information and communication technology cluster.

Energy and energy efficiency cluster.

Light manufacturing cluster.

Agro-industry and food processing cluster.

In order to build a common agenda based on information, a diagnosis was carried out on each of the clusters in 2016, which focused on identifying: cluster formation, the demand for

workers and the skills required, an evaluation of academic-technical program offerings and global training patterns, challenges and opportunities for Research and Development (R&D), proposals for curricula - based around the clusters.

This diagnosis, complemented by the knowledge and experience of members of the HEIs, industry and the government, was then used to draw up agreements in the areas of intervention, programs to launch, and the actions that each partner would implement. This process of strategic dialogue through the cluster model was crucial in terms of focusing the measures on the skills, labor market innovation and business dynamism pillars, which are key to competitiveness 4.0. The cluster model has a direct impact on improving the following indicators (figure no. 5):

Innovation capability pillar

The cluster development indicator ranks 134 out of 140 countries evaluated, which shows that there is a need for greater promotion of the creation and development support of existing clusters within the country. The USAID Higher Education for Economic Growth Activity offers a model that can be extended to more sectors of the economy and can be sustained over time. One challenge will be to increase resources and promote their sustainability. Another important favorable indicator is the collaboration of multiple parties, which is significantly lagging behind (position 137). The existing perception is of poor collaboration between industry and universities, between companies of the same sector, and within individual companies. More extensive communication of the results of this Activity will be key to improving this indicator.

Contribution of the Activity to the Fourth Industrial Revolution for economic and social growth

1. Cluster model: Impact on competitiveness 4.0

21

Skills pillar

One of the major contributions of the cluster model was to facilitate discussion and agreements on the relevance of training in light of current and future cluster demands, and to implement actions which shift the balance between the demand for skills and the training being offered.

These agreements were focused on actions that will improve the competitiveness 4.0 indicators, such as the quality of professional training (108), the skillset of graduates (108), the ease of finding skilled employees (110), critical thinking in teaching (135 ) and digital skills among the active population (110).

Labor market pillar

This pillar focused on designing specific programs to improve female participation in

the labor force (93), with emphasis on scientific, technological, engineering and mathematical skills (STEM). It also covered the development of labor market analysis, and the promotion of career orientation systems to guide and link young graduates to the labor market and provide feedback on curriculum adjustments.

Dynamism pillar

The cluster agreement to support university- industry research activities has generated results that have a positive effect on indicators such as attitudes toward entrepreneurial risk (79), growth of innovative companies (130), and companies embracing disruptive ideas (136).

Source: Prepared by the author.


Figure 5 Cluster model: Impact on competitiveness 4.0

22

The Activity focused on improving human capital within the higher education sector, strengthening industry knowledge, teaching skills that prepare the workforce for 21st century opportunities, and building research skills in order to provide scientific solutions for the challenges faced by

industry. A range of initiatives were designed and implemented, which achieved the impact aspired to by the cluster. These initiatives are (figure no. 6):


Specialized training initiative

Training was provided to 1,403 faculty members, researchers and academic staff from around the country, who participated in specialized training or academic programs that aimed to improve teaching skills in higher education, curriculum design, applied research, etc. The courses offered were specialized, advanced courses with internationally recognized certifications, as proposed by the industry involved in the cluster.

Master’s programs scholarship

initiative

Master’s degrees for teachers are useful tools for improving industry-related knowledge and skills. A combination of in-person and online programs were chosen to optimize the financial resources. The 28 teachers who obtained their Master’s degrees will improve teaching in eight of the 13 HEIs and establish a lifelong interaction with the institutions where they chose to study. Several are now participating in applied research activitys.


Figure 6 Investing in human capital: Impact on competitiveness 4.0

2. Investing in human capital: Impact on competitiveness

4.0

23

Initiative for enrolling young people in science, technology, engineering and mathematics (STEM)

A scholarship program supported 647 talented students with economic disadvantages, of which 33% were women, thus achieving the goal of 1000 years’ worth of scholarships. The students were trained at the following eight universities: UTEC, ITCA, UFG, UGB, UNICAES, UNIVO, UDB and UCA.

Work internship and professional collaboration initiative

More than 26,000 students participated in Career Development Center activities, through which the internship initiative for students was developed as a way to strengthen practical skills in companies. More than 1,390 internships and over 470 jobs resulted from this initiative. Additionally, the professional collaboration initiative (externships) was implemented, where faculty members from the four clusters visited companies in order to learn about processes, technology and trends.

Women’s economic empowerment initiative

The gender component has been transversal during the Activity implementation, and a range of interventions were developed, such as:

• Science Girl Camp (SGC): Developed

together with UDB, this program aims to draw young high school girls towards STEM areas in order to encourage them to enroll in related degrees at university. The Activity also awarded scholarships to 19 of the girls who attended the SGC.

• Scholarships for women: One of the goals

of the Activity’s scholarship program was to grant scholarships to a higher proportion of women than the percentage currently

enrolled in STEM courses. In this case, the scholarship program’s target was to award 30% of scholarships to women. At Activity close-out, this goal has been exceeded, with 33% of the 1000 scholarships awarded to women.

• Female Leaders in Higher Education

Network: This network was born out of the partnership between 10 HEIs, with the support of MINEDUCYT. Its objectives are to support equal access to higher education for women, particularly in STEM areas; to publicize research advances made by women; to make work done by female scientists in HEIs more visible; and to support the professional development of women.

• ConCiencia Girl Camp: This camp was

a result of the collaborative work between the Activity, the Santa Tecla Rotary Club, the USAID Education for Children and Youth program and ITCA-FEPADE. The aim of this camp was to encourage girls from La Libertad schools to become more interested in STEM subjects so they would consider them as professional development options. Seven teachers from the schools were also included so they could replicate and extend the scope of the camp to all the children in their classes. The camp included 40 girls, who were given courses in chemistry, robotics, programming and mathematics.

• Baseline forthe USAID Higher Education

for Economic Growth Activity’s “Female Leaders in Higher Education Network”: This activity was developed in conjunction with the USAID Monitoring, Evaluation and Learning Initiative. The objective of this initiative was to collect information on the current gender equality situation within the HEIs included in the Female Leaders Network, with respect to policies, practices, attitudes, institutional information, and the type and quality of prevention/response services offered for gender-based violence


in STEM degrees. This baseline will allow HEIs to compare the results of their actions and identify areas where more intervention is needed, together with the type of interventions required, in order to improve gender equity in their institutions.

Joint applied research initiative between institutions in the United States and El Salvador

The country’s HEIs have carried out 26 research Activitys, and the results have exceeded industry expectations. It is important to highlight the development of new researchers, who are more able to carry out scientific research that are relevant to industries in El Salvador. Labs were upgraded, and doors remain open between the HEIs and industry so that research activities and publications aimed at academic and industrial audiences can continue at both the national and international levels. Some examples include UES and UNICAES, which investigated how to improve the technological process for cocoa production, cryogenesis and cocoa tissue culture, which improved chocolate bar quality, thus increasing their export potential. UJMD also conducted research that provides producers with information on the genetic quality of rust-resistant cocoa, and created coffee germplasm banks that enable genetic identification and traceability; this is important for international markets and results in higher payouts (Appendix 1).

Impact of the initiatives

The initiatives implemented to strengthen human capital will have positive effects on several of the indicators that contribute to competitiveness 4.0:

Skills pillar: The increased specialized training and the scholarship programs will have an

impact on the average years of schooling (104), the level of staff training (114), the quality of professional training (108), the skillset of graduates (108), critical thinking in teaching, and the ease of finding skilled employees (110). The research activitys and internships will influence collaboration within businesses (136), university-industry R&D collaboration (121) and the quality of research institutions (112). Meanwhile, the STEM scholarship program will encourage female participation in the labor force (93).

Innovation capability pillar: Developing the capabilities of HEI faculty members and students based on industry demand will improve the performance of certain indicators, such as: quality of research institutions (112), industry-university R&D collaboration (121), and collaboration within companies (136).

Labor market pillar: Supporting young women with scholarships for training in STEM degrees will help improve the indicator of female participation in the labor force.


By working with collaborative platforms such as the clusters, it is possible to discover the huge opportunities for collaboration that exist between HEIs, industry and the government. As part of this collaboration, the support actions were mainly focused on: 1) reviewing and improving degree programs to align them with industry needs; 2) supporting applied research to solve industry problems, thus increasing productivity and promoting innovation; 3) investment and collaboration between university laboratories and companies; 4) improving the level of students entering the labor force through Career Development Center (CDC) services. The results of the initiatives are those shown in figure no. 7.

33 new or improved education programs in response to industry needs.

The new and improved curricula will have a sustained impact, and benefits will continue to be seen in the coming years as better-prepared studentsgraduate. In this respect, 14 new degrees requested by the industry have been approved: Master’s Degree in Production Engineering (UCA), Master’s Degree in Industrial Design (UCA), Software Development Engineering (ITCA- FEPADE, UFG, UNIVO, UNICAES), Engineering in the Administration, Design and Management of Databases (UTEC, UGB, UFG), Energy Engineering (UCA), Engineering in the Design and Development of Video Games (UFG), Food Processing Engineering (UCA - UNICAES). Likewise, 19 existing degree programs were updated, and 14 new degrees were created in response to the industry needs (UNICAES, ITCA-FEPADE, UNIVO, UGB, UTEC, UFG, UDB, UCA).

Certification in industry-recognized skills

During the cluster diagnoses, companies demanded specialists with specific industry- recognized certifications, and the Activity therefore complied by certifying a large number of professionals in: ISO 50,001, HAACP, PCQI, MCSD, MTA and Lean Six Sigma, among others.

Publications and patents

Support was given to 33 publications, of which three were presented as patents and others were published in international journals. The topics researched included forage, cocoa, bio-agro, modified atmosphere packaging, nanotechnology, boiler corrosion, plastic injection molding, zero net energy, SCADA, TVWS and fruit sensors.

Collaboration between university laboratories and industry through applied research

Since upgrading laboratories will enable more permanent research contributions, support was givento 17 laboratories to improve infrastructure and equipment in response to industry needs. For example, UNICAES received three new laboratories related to software development, food processing and footwear, while UCA created an energy efficiency laboratory.


3

Applied research and development of the HEIs: Impact on competitiveness 4.0

26

Career Development Center (CDC) This is a service center that has been implemented in five HEIs (UDB, UCA, UNICAES, UFG, UNIVO), through which students receive professional guidance and training on entering professional life, internship placements, employment and entrepreneurship opportunities. It also promotes ongoing training.

The initiatives that have been implemented to strengthen research and HEIs according to industry needs will enable an increase in competitiveness 4.0 capabilities and the development of higher-value products, as follows:

Skills pillar: The strengthening of HEI degrees and research capabilities will have a sustained effect, and will impact on the average years of schooling (104), the level of staff training (114), the quality of professional training (108), the skillset of graduates (108), critical thinking in teaching (135), the ease of finding skilled employees (110), and school life expectancy (100).

Innovation capability pillar: Business- university R&D collaboration (121), quality of research institutions (112), and collaboration within companies (136).



Figure 7 Applied research and development of the HEIs: Impact on competitiveness 4.0

27

One of the most important areas to work on is the strengthening of institutional mechanisms in line with the vision of strategic collaboration between the industrial and higher education sectors, in order to promote the creation of greater opportunities for students and growth for companies. Addressing this challenge involves developing and strengthening the institutional capacities of HEIs and establishing and institutionalizing mechanisms for dialogue and collaboration between the education sector, indsutry and the government; government authorities play an important role by supporting and adopting viable reforms. The following initiatives were supported (figure no. 8):

El Salvador’s First National Policy on Higher Education proposal The policy proposal was possible due to a broad, participatory and transparent process that considered all stakeholder contributions. The Activity facilitated and managed the political dialogue between the key players, which led to the design of the policy proposal. The Activity also provided technical support to the National Directorate of Higher Education (DNES) which, together with the universities, built a road map for developing the policy.

Human and Institutional Capacity

Development Five HEIs received financial support for institutional strengthening, based on diagnoses that identified opportunities for improvement in their strategic performance. Support was provided in the following areas: fundraising, comprehensive development of academic and administrative capacities, design and development of a strategy for offering online and blended learning degrees, and strengthening strategies based on key performance indicators.

Degree program accreditation Accreditation is a critical factor for improving the quality of study programs, and has an important impact on productivity and economic growth. The accreditation process for six STEM degree programs has been supported in five participating HEIs (UDB, UNICAES, UNIVO, UGB, UFG). This is being carried out with the Central American Agency for the Accreditation of Architecture and Engineering Programs (ACAAI).



Figure 8 Institutional strengthening: Impact on competitiveness 4.0

4. Institutional strengthening: Impact on competitiveness 4.0

28

IV. MOVING TOWARDS SUSTAINABILITY AND IMPROVEMENT OF EL SALVADOR’S COMPETITIVENESS

Over the course of five years of Activity implementation, an institutional framework of university, industry and government collaboration was achieved, which allowed for the definition and implementation of programs that are aligned with the opportunities of the Fourth Industrial Revolution, which foster greater competitiveness and growth.

Cluster Model Sustainability

The Activity implemented training activities for faculty members, researchers and university staff, as well as curricular development and applied research with specific innovations that respond to the needs of the industry. This has enabled the three elements of the helix

(university, industry and government) to begin to work in collaboration and trust, as expressed in the document “Creating a Sustainability Plan for Industry-Higher Education Clusters in El Salvador.” The cluster model promoted in El Salvador is in the early stages, according to best international practices. When evaluating the seven typical stages that a global standard competitiveness cluster achieves, El Salvador shows different advances in four of them, while three stages have not yet been addressed, as seen in (table no. 4).

Creating a Sustainability Plan for Industry-Education Clusters in El Salvador.

Moving towards sustainability and improving El Salvador’s competitiveness

Table 4 Status of the typical functions of a competitiveness cluster, December 2017

30

Taking into consideration the achievements and challenges involved in consolidating the cluster platform, the leaders of the HEIs evaluated the different options expressed in the aforementioned document in order to continue working beyond the duration of the Activity in a sustainable manner.

As a result, they proposed to continue developing the collaborative work of the triple helix by maintaining the clusters, and signed the Agreement for the Creation of the Consortium of Higher Education Institutions for Economic Growth, and the agreements for collaboration between the associations and production sector unions with this consortium.

The benefit of this strategy is that it enables a process of strengthening over time and consolidates a structure that functions independently. The focus of the initiative prioritizes activities that accelerate progress in the four areas of a competitive cluster (table no. 4) and initiate actions in the three areas that are still pending.

New generations of professionals in degrees that contribute to productivity

In addition to the students who were awarded scholarships through the Activity, new generations of young people will continue to benefit from the degrees that were created or improved with the support of the Activity.

In order to guarantee the implementation and sustainability of these training programs, the studies of the sectoral profiles developed by each cluster were used as a reference point. Their design was based on systematic consultation with productive sectors, professionals and experts in curricular design. DNES was also involved in supporting

training on regulations, as well as reviewing and modifying their own processes in order to expedite the approval of the degrees.

This methodology will continue to be applied within the institutions. Faculty members of these degrees have been trained in English language teaching, pedagogy, research and technical areas.

In order to ensure the development of professional skills and the employability of young graduates, laboratories have also been equipped for internships within the university. The Career Development Centers (CDC) have also helped establish internship programs and the Business Network, which help to connect students with the working world. CDCs also contribute to preparing young people and placing them in their first jobs.

Training new professionals, the new or updated degrees, and the CDC will all continue their operation after the Activity has ended.

Research areas associated with productive sector needs

Universities have improved their research capabilities. The Activity contributed with training, technical assistance, supplies and laboratory equipment so that different lines of research could be developed in sectors in which the clusters were involved.

The different research activitys generated publications that were accepted by local and international scientific journals and had their results presented in scientific and business congress. Some results showed high potential for patent registration.

Moving towards sustainability and improving El Salvador’s competitiveness 31

The number of researchers and students trained and associated with these investigations, the collaboration between local universities, and the ties with foreign universities, mainly from the United States, have been key to the continuity of these lines of research.

At the same time, the contribution of the universities and companies associated with the Activity-financed investigations is a strong sign of the commitment to continue working on applied research that solves issues within the production sectors and society as a whole (Annex 1).

Continuity in these lines of research is the systematic road towards innovation, where new products or services are developed; this translates into more income and better jobs, and thus economic and social growth.

Sustainability of the actions set out in the National Policy on Higher Education proposal

The National Policy on Higher Education proposal arose from the consensus of different key players in the higher education system, and its proposed lines of action have therefore been validated in terms of their importance, feasibility and need for implementation. As a result, there is a commitment to continue the work of political dialogue with the aim of changing the higher education system. This commitment is evidenced by the designation of a work team within the Higher Education Council (Consejo de Educación Superior, CES according to its Spanish acronym), which seeks to put the actions proposed in the policy into effect.

The work of the CES and of the participants involved in the design of the proposal ensure continuity, not only of the actions raised in the policy proposal, but also of the impact that the players from the higher education system have in the field of public policies.

Sustainability of actions that promote the development of women through economic empowerment

The Activity developed diverse activities that relate to the empowerment of women in higher education.

In order to sustain these actions, the Female Leaders in Higher Education Network was created to work within universities on the creation of environments where more women have access to higher education. It also aims to work on making women more visible in the fields of education, research and technological development.

Sustainability of institutional strengthening

The processes of institutional strengthening include: equipping specialized laboratories, bibliographical updates, teacher certification and implementing offices for curricular management, academic innovation and institutional fundraising.

All of these interventions enable the supported HEIs to close performance gaps and achieve institutional management objectives both immediately (in terms of laboratories and certifications) and over the coming years (in terms of fundraising and academic innovation offices). The sustainability of these efforts is ensured through coordination between the HEIs and the Activity. The starting point of this work was a comprehensive diagnosis of HEI performance, which identified the main actions to be developed and coordinated with the strategic goals of the universities, whose objective is the improvement of the quality of higher education in the country.

Scholarship program sustainability

The Activity has awarded a total of 1000 years’ worth of scholarships to more than 600 young people nationwide. HEIs participating


in this program have explicitly committed to supporting the continuity of the young people who receive scholarships. Additionally, within the framework of the Memorandum of Understanding with USAID El Salvador, the Rotary Club is supporting the sustainability of scholarships by applying for international funds to support the equipping and management of specialized equipment in the HEIs where the scholarship winners are enrolled, thus enabling comprehensive support during the formative process of the young people. The Rotary Clubs participating in this effort are Santa Tecla, Maquilishuat and San Salvador. Both commitments to the education of young people – by the HEIs and the Rotary Club – enable the sustainability of the scholarship program after the Activity activities come to an end.


Annex 1: Applied research in partnership with companies, foreign universities and the government 34

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UDB - Studies on the reliability of plastic products made with low-rnn molds . Collaboration : Rutgers University.

Improve the potential of MIPYMES in El Salvador by developing new molds that a llow <lesig11 concepts to he integrated w hile manufacturing plastic conta iners. . Pan of detenuining the quality of plastic containers made with low nm molds.

Digital Manufacturing and Rapid Prototyping Laboratory, Indusuial Design and Manufac turing Innovation Center.

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UFG - DevelopmenL of nanoLechnological coatings on ceramic surfaces. CollaboraLion: Purdue UniversiLy and Auburn UniversiLy.

Promote nanoLechnology solutions for the developmenL of new maLeria ls to impacr the irnlustry.

Nanotcchnology Laboratory.

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lJCA - Zero net energy buildings in El 7 Salvador.

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Study the paradigms of the current design processes and the constrnctive and operational characteristics of the current buildings that reflect non-integration and hinder t he successful implemen l a l ion of 7.ero net energy bui lding.> in El Sa lvador.

Light Manufacturing Cluster

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a nd electric I Engineering, E uroAire, mobility laboratory. Sherwin Williams, INCO

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lJCA - Modified al mosphere pacbging design to improve the shelf lite of Salvadoran foods. C.olla bora t ion: Rulgers University and lnstinito Quimico de Sarrii1, Barcelona.

'UCA/ UDB/ ITCJ\ FEPJ\DE - Molding/ casLing manufacturing of injection plasLics using CAD/ CAM/CAE computer software: Analysis of the variables associated with the repair and manufactur ing of plastic injection molds CollaboraLion: Rutgers University.

Perform mialysis and develop solutions for the plastic industry.

Offer the Salvadoran industry a mold repair methodology and validaLe it experimentally using software for the <lesign and optimiza tion of molds as a11 alternative to repair.

Polymers I.ahor;1tory .

New

Mechanica l Metal I.ahorntory.

Strengthened

Ml N EC AS I.

'l'ennoencogibles

IBE RPLASTIC, Salvaplastic, 1krramicntas Cemroameric anas S.i\. de C.V (HECJ\Si\), Grupo Sarti, COR IN CA, ADX, Roxi, Sigma Q

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LNICAES - Development of a quality

"1,--'ontn·b ute to m· tprov11.1g t1 te qua 11.tv of"1ootwear 1.11 F, l S. a Iva< lor, mam. 1y .

Footwear design

sma II a rn 1.Ianbd quality control

!Salvadoran Chamber of Footwea r arnl Associatecl

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medium-sized businesses. ' • a oratory.

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/lJC:A - Mil igation ;md cont rol of boiler corrosion in El Salvador Collaboration: 13 !Rutgers University and lnstitllto Quim..ico Ide Sarria, Rarcelom.

!UES - Conservation and management of /Robusta coffee (Coffea Crnephorn) a nd Criollo Cocoa

14 CollaboraLion: University of California La creed. (Thcobroma sp.) in productive

.igro-ccological systems as a strategy for climate change.

ES - Improvement of productiv ity and nut ritiona l qua lity fodder for t he

Reduce produc tion costs by developing methods to analyze, prevent and control ·ariablcs that accelerate corrosion in biomass boilers.

Agro-industry 011d Food Processing Cluster

Improve prod uction processes aud offer alternatives for small and medium [proclucers of Robusta coffee and C:riollo cocoa producers.

G>rnp; fiia A zucarern lnstrn mental IS,11v,1doreiia (C:ASSA), A 1alysis I .ahoratory lngenio Jiboa and Ingenio La (< nrros10n). Cabana, as well as the

Kimberly Clark Centra1 New American corporat ion.

I rrigation systems a nd improved agro- industry plant. -:OSC:Af F, R ANDF.SA T ., Development of S:rnta c:Iara C..'ooperat ive, the rofkc and cocoa Honduran FoundaLion for demonstra tion griculturnl Research plots. (!'HIA), EXAG ROLi.

.S1rengtl1ened

Zoology, milk and cliemistry research

llaboralory, and t he CD ;;i development of better feeding strategies Provide the industry with alternatives that improve livestock nutrition and feed echnological Hacienda San Ramc'>11 a-: CD V)

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that allow greater productive and economic !cmts, thus impacting m ilk industry productivity. perfonnance of the dairy sector in r:l Salvador. Collaboration :Univc rsity of Florida.

DNICAES - Divcrsification of new - prod ucts for small- scale pro<.:cssors derived . . . . . .

. !Develop sC1enl1G.c Leclmolog1cal solutions for developmg recipes for new producls

Center for griculture and ivestock

(CETAG).

Fd quali.ty j :alory

PROLEC:H r:

Cooperative Association of <B 16 3 from unrefime< [ brow11 suga r cane . . d .

1uc1mg . . . . . . . denved from mcludmg mmt, cmnamon ies

P;rneb Producers

3 cand1es, nunl, cmnamon an 1emon- sm:ngthcm:d (ACOPANELA) CD L flavored

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pane la sugar cubes. Coll:1horat ion: Rutgers lJTJiversi ty.

UNICAES/ UES - Developmem of a tech nological mode l for rescuing, clraracteriziTJg and developing the agro-

17 industrial potential of indigenous Salvadoran cocoa. Collaboration: Rutger> University.

Choosing elite Cnollo and Trinitario native cocoa matemls for certifica tion and commercial activityion.

Est abl ishing t he opt imal fermen t a t ion condit ions for obtaining qua lity cocoa

Establishing conditions for creating sample bars based on quality standards, in order Lo define the sensory standard for fine cocoas and local flavors.

Support producers in order to conduct a comprehensive strategy for developing the cocoa indusLry and placing it more quickly in international markets, since high-quality, ge11etically uniform a11d rapidly propag: ting plant material could be readily available.

UES- Molecular l-liology Laboratory.

Sl!engthened

Cocoa and chocolate research and innovation laboratory. Pla nt ation model:

Concepcic>t1, La Sierr:1, Los New Angeles; small and medium

production plamations.

Microbiology I.ahoratory. New UNICAES Tissue culture laboratory (UNICAES)

Sl!engthened

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UCA - Characterization of agro-industrial waste strea rm and their reutili.ati011 aTJd

18 value addition for the reduction of environmen t ;1I i mpact (Rio- ;1gro Activity) G>llahora ti011: Rutger.> University.

Deve l op a t eclmici l a nd fin:rnci:il st udy t o produce cit ric :Kid (na t ura l preserva t ives aTJd tlavori11gs) as a value-added product from sugar caTJe residue (suga r rnola.>ses) and the diary indusLries {whey) from El Salvador's agro-food industry using hioteclmological alternati·es.

Reactor Laboratory.

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UNIVO Design and creation of a prototype to obtain ricotta cheese from whey. Collaboration: Humboldt International University.

Offer the dairy industry alternatives to improve the ricotta cheese manufacturing process, with improved safety and a favorable impact on market access.

Dairy Product Processing Plant.

New

Asociaci6n Cooperativa de Producci6n Agropecuaria de Anamoros de R.L. (ACOPAN); L\.cteos Guzman; Eastern Milk Producers' Cooperative (COPROLECHE); and Lacteos Morazan (Administrated by ADEL Morazan).

20

UNICAES - Mapping of coffee and dairy product chains. Collaboration: Rutgers University.

Provide the industry with relevant information on proactive coffee and dairy product processes that help identify alternatives for improvement.

CAMAG RO Coffee and milk product producers.

21

UJMD Morphological and molecular characterization of Hemileia Vastatrix rust- resistant coffee (Coffea Arabica) material in El Salvador Collaboration: Universid ad Tecnica Particular de Lojan, Ecuador.

Offer producers information on morphological and molecular characteristics, and also carry out disease diagnoses in the Coffea Arabica materials which are resistant to Hemileia vastatrix rust in order to determine identity, uniformity, stability and genetic distance.

Equipment for analyzing rust- resistant varieties.

Strengthened

Coffee producers from various locations.

BIBLIOGRAPHY

BGC (2015).“Man and Machine in Industry 4.0”, Boston Consulting Group, September 2015

McKinsey Global Institute (2018). “AI, automation, and the future of work: Ten things to solve for”, por McKinsey Global Institute, June 2018

USAID (2011). “Evaluación del Desempeño del Asocio para el Crecimiento en El Salvador”. U.S Agency for International Development (USAID), July 2017

USAID (2012) The results of “El Salvador: evaluación de la educación superior y recomendaciones”, published by USAID in January 2012.

USAID (2017).“Evaluación del Desempeño del Asocio para el Crecimiento en El Salvador”, published by the U.S Agency for International Development (USAID). July 2017, Find the study at https:// sv.usembassy.gov/wp-content/uploads/sites/202/Aso cio_para_el_Crecimiento_El-Salvador_ Evaluacion_Final.pdf

USG-GOES (2011). The study was “Pacto para el Crecimiento El Salvador: análisis de restricciones” in September 2011. See the link at https://photos.state.gov/libraries/elsavador/92891/PFG/ES%20 Constraints_Analysis.pdf

WEF (2018). “The Global Competitiveness Report 2018”. World Economic Forum (WEF), October 2018

Proyecto de USAID de Educación Superior para el Crecimiento Económico

El Salvador, 2019

USAID Higher Education for Economic Growth Activity:A path ...

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