Bridging the skills gap: Why vocational training matters across Latin America and the Caribbean

By Zoila Palma: Latin America and the Caribbean are facing a persistent skills gap that is increasingly affecting businesses, workers and economic development.

In its June 2026 Education and Skills Development Framework, the Inter-American Development Bank (IDB) reported that more than 50% of large firms in the region identify skills shortages as a major barrier to workforce transformation.

The IDB also found that only 19% of young people complete secondary school with minimum mathematics proficiency, falling to just 5% among youth in the poorest 20% of households.

The figures are strengthening calls for greater investment in technical and vocational education and training (TVET), particularly programs that connect classroom learning directly to employment opportunities.

An IDB report published in July 2025 identified vocational and technical education, digital technology, Industry 4.0, youth employment and workforce training as key areas for developing skills needed by changing economies. The report emphasizes that stronger links between workers’ skills and the needs of businesses can contribute to productivity and economic growth.

There is already evidence of vocational programs being expanded across the region. The IDB’s November 2025 TVET Fund report said the initiative had financed 29 projects in 16 countries, trained more than 34,000 people and developed 700 skills-based training modules since its launch in 2019. The fund promotes partnerships with the private sector and supports training designed around labor-market needs, including digital technology and emerging industries.

Newer approaches are also focusing on short courses, micro-credentials and flexible training that allow people to gain or upgrade skills without leaving the workforce. An IDB study published in December 2025 said micro-credentials can provide more flexible pathways into post-secondary education and help connect jobseekers with employers, although it cautioned that evidence on their effectiveness in Latin America and the Caribbean remains limited and mixed.

Meanwhile, the World Bank’s April 2026 regional economic update highlighted examples from countries including the Dominican Republic, Chile, Argentina and Brazil where training systems are being connected more closely with employers, investment projects and job-placement mechanisms.

The growing emphasis on TVET comes as the region prepares for changes driven by digitalization, artificial intelligence, green industries and new investment.

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