Challenge
Investments in skills development can generate benefits that extend far beyond the individuals who receive training, yet these broader effects are often difficult to measure and communicate. Stronger evidence and practical methods to understand the full value of skills development are needed, including the economic returns for trainees and employers as well as the wider benefits generated as knowledge, skills, and productivity gains spread through enterprises, sectors, and communities.
Solution
UNIDO promotes Inclusive and Sustainable Industrial Development by creating shared prosperity, advancing economic competitiveness, safeguarding the environment, and strengthening knowledge and institutions. A key platform for this mission is the Learning and Knowledge Development Facility (LKDF), which fosters industrial skills development for young people in emerging economies through Public-Private Development Partnerships (PPDPs). These partnerships support the establishment and upgrade of local industrial training academies to meet labor market demands. UNIDO engaged Making Cents International to develop a more comprehensive picture of the direct, indirect, and economic value generated by skills development investments delivered through these PPDPs.
Making Cents conducted two complementary pilot studies. The first examined the indirect impacts of Training of Trainers (ToT) models, applying a Social Return on Investment (SROI) methodology to assess the broader social, economic, and environmental value generated through LKDF-supported PPDPs. The study captured multiplier effects and spillovers that occur as trained instructors, institutions, and beneficiaries transfer knowledge, improve productivity, and contribute to more inclusive growth.
In parallel, Making Cents conducted a pilot study on the value of skills, gathering in-depth evidence from a project context and translating that evidence into a prototype tool for estimating the economic value of skills gained through PPDP-supported training. The study examined returns from both individual and employer perspectives and provides a practical proof of concept that can inform future scale-up.
Together, the two studies provided UNIDO with a stronger evidence base for demonstrating return on investment to private-sector partners, funders, and other stakeholders; informing decisions about future skills investments; and communicating the broader value of PPDP-supported training.