Why skills development is critical for productivity and competitiveness

Anne Kamonjo, an education reformer and sustainability champion working at the intersection of policy, training, and systems change

When we discuss skills development in Kenya, much of the attention goes to how many young people are being trained, how many graduate and how many eventually find employment. These are important measures, particularly in a country where access to meaningful work remains a challenge for many young people.

Recently, however, I have found myself thinking about what happens after young people graduate. We have invested in equipping them with skills, but how do those skills translate into economic value, both for the individuals and for the wider economy?

Consider a small manufacturing business where workers have learned to operate equipment more efficiently, reduce material waste and maintain consistent product quality. The business may be able to fulfil more orders, reduce operating costs and attract customers who previously considered its products unsuitable.

In this scenario, the number of employees may not have changed, but their ability to produce more, improve quality and work more efficiently has increased.

This is why I believe skills development deserves a much bigger place in our economic conversations. Its value goes beyond preparing people for employment. It also lies in strengthening their ability to contribute to productivity, business growth and the wider economy.

Employment numbers tell only part of the story

According to the Kenya National Bureau of Statistics' 2026 Economic Survey, approximately 822,100 new jobs were created in 2025, with the informal sector accounting for 87.2 per cent of them.

This means that for many young Kenyans, the journey into work will not necessarily begin with a formal employment contract. It may begin in a workshop, a family business, a construction site, a farm or a small enterprise they establish themselves.

The World Bank has similarly highlighted the limitations of relying on formal wage employment to absorb Africa's growing working-age population. Improving productivity and earnings across different forms of work is therefore an important part of the continent's employment challenge.

This has significant implications for how we think about skills development because we must now consider how those skills can improve the quality and economic value of work that already exists.

A carpenter who learns to work with greater precision may qualify for contracts that were previously beyond their reach. A farmer who adopts better production and water-management practices may improve yields and reduce losses. A mechanic who develops competence in digital diagnostics may be able to serve a growing range of vehicles.

These improvements may appear small when viewed individually. Across thousands of businesses and workers, however, they can make a meaningful contribution to productivity.

The connection between skills and productivity

Productivity is often discussed in terms of national economic performance, industrial output or business efficiency. Yet much of it comes down to the capabilities people bring to their everyday work.

In practical terms, skills influence how well resources are used, how consistently quality is maintained, how quickly problems are resolved and how effectively businesses adapt to new ways of working.

For a small enterprise, the ability to reduce waste or complete an assignment to a higher standard can make the difference between remaining in the same market and attracting a more demanding customer.

For a larger manufacturer, a technically competent workforce can reduce downtime, improve production processes and support the introduction of more sophisticated equipment.

Of course, skills alone do not determine productivity. Workers also need access to appropriate tools, infrastructure, finance, markets and working conditions that allow them to apply what they know.

We cannot expect training to compensate for every constraint facing businesses and workers, but we must also recognise that even where these other investments are available, their value can be limited when the necessary human capabilities are missing.

That is why I see skills development as both an education priority and an economic one.

The value of skills does not end with the first job

We also need to reconsider how we measure the success of skills investment.

Employment after graduation is an important indicator, but it captures only one point in a person's working life.

Someone who enters employment at 22 may remain economically active for another 35 or 40 years. During that period, the tools, technologies and expectations associated with their occupation are likely to change considerably.

The International Labour Organization has emphasised the growing importance of lifelong learning in helping workers and economies respond to technological and structural change and this suggests that the economic return on skills development should also be considered over time.

A person who moves from an entry-level role into more specialised work, becomes a supervisor or develops the competence to establish a business has experienced an important economic progression.

The same applies to an experienced worker who acquires new capabilities and becomes eligible for better-paying assignments.

These outcomes are not always captured by the initial employment statistics, yet they matter greatly to households, businesses and the wider economy.

Rethinking how we measure success

When we look at skills development through this wider lens, it becomes clear that the benefits of training extend well beyond the point of graduation or securing a first job.

We should certainly celebrate the young people who complete their training and find employment. But we should be equally interested in what happens five, ten or twenty years into their working lives. Are they progressing in their careers? Are they earning better incomes? Are they helping businesses become more productive? Are they able to adapt as industries and technologies change?

These are important questions because the economic value of skills is realised over time, through the work people do and the opportunities they are able to pursue.

As Kenya continues to invest in skills development, I believe we need to broaden how we define success.

Preparing people for employment is an important starting point but equipping them to remain productive, grow professionally and create greater economic value throughout their working lives is equally important.

Anne Kamonjo is an education reformer and sustainability champion working at the intersection of policy, training, and systems change. She currently works at the Ministry of Education, State Department for TVET, leading Kenya’s national effort to institutionalize green skills across technical training institutions.