FDI, Skilled Labour and the Caribbean's Emerging Competitive Disadvantage

Abstract

This article analyses why the Caribbean economies have not been able to take advantage of their physical proximity to the highly developed economies and the likely role of shortage of skilled labour in this. Our analysis reveals that the twin trends of growing need for FDI and lack of enough highly-skilled workers is giving rise to the emerging competitive disadvantage of the Caribbean countries. We show that in spite of having achieved high levels of human development, including high literacy levels, the higher education and skill development strategy of the region lacks vision especially in terms of the development of institutional aspects. The Caribbean economies may be able to partly neutralize the advantage typically enjoyed by large economies by making effective use of information technology, especially in the area of services. But the associated need for highly skilled and knowledge-intensive workers would require continuous upgrading of educational and training systems.